Incoming US President Donald Trump has called on NATO countries to drastically increase their defence spending to 5 per cent of GDP, more than double the alliance's current 2 per cent target. However, this demand has been met with criticism from several European leaders, who argue it is neither practical nor achievable.

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"They can all afford it, but they should be at five per cent, not two per cent," Trump said on Tuesday (Jan 9).

"Europe is in for a tiny fraction of the money that we're in. We have a thing called the ocean in between us, right? Why are we in for billions and billions of dollars more money than Europe?" he added.

German Chancellor rejects five per cent target

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German Chancellor Olaf Scholz voiced strong opposition to Trump's proposal. Scholz said, "That's a lot of money," adding that NATO already has a clear procedure for setting defence spending targets. Currently, members are expected to spend 2% of their GDP on defence.

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Instead, Scholz advocated for sticking to the existing NATO agreements. "I think it's better to concentrate on the path that NATO has long agreed on," he said. However, he added that "Germany must do more for security" and pointed out that Berlin had nearly doubled its defence budget in recent years.

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Czech PM suggests 3 per cent as a realistic target

Czech Prime Minister Petr Fiala offered a more moderate response, suggesting that aiming for 3 per cent of GDP on defence spending was "realistic."

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"It is realistic to talk about three per cent in several years," Fiala told reporters on Wednesday, adding that the increase would need to happen gradually. He welcomed a discussion on the appropriate level of defence spending, saying, "Let’s look for the correct level... we are open to a debate."

Long-standing debate over NATO spending

Trump’s scepticism of NATO is well known. During his first term, he repeatedly criticised member states for failing to meet their defence commitments, accusing them of relying on the US to shoulder the financial burden.

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Last month, he reiterated a familiar threat to withdraw the US from the alliance if members did not increase spending. On the 2024 campaign trail, Trump referred to the current 2% target as "the steal of the century."

Where does current NATO spending stands?

In 2023, the alliance adopted 2% of GDP as a baseline requirement, moving away from its previous status as a goal. By the end of last year, 23 of NATO's 32 member nations were on track to meet this threshold.

Poland led the alliance with defence spending at 4.12% of GDP, while the United States spent 3.38%. The United Kingdom allocated 2.3%, and France and Germany barely crossed the 2% mark.

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Spain lagged behind at just 1.28%, along with other underperforming members like Italy, Canada, and Belgium.

The US contributes the majority of NATO's defence spending, accounting for over 60% of the alliance's total spending.

(With inputs from agencies)