Despite Recent Pledges, Spain Will Struggle To Boost Military Spending

(JOSE JORDAN/AFP via Getty Images)

Spanish soldiers sit at tables at a makeshift military base in Valencia, eastern Spain, on Nov. 12, 2024, following deadly floods in the region.

Domestic political constraints will limit Spain's room for increased military spending, which could deepen trade tensions with the United States and limit Spanish participation in any European peace plans for Ukraine. In an interview with a Spanish newspaper published on March 19, Spain's Economy Minister, Carlos Cuerpo, said that Madrid will increase military spending without cutting social spending. According to Cuerpo, the combination of high economic growth, EU financing and ''flexibility in our fiscal rules'' will enable Madrid to honor a promise to its NATO partners to increase military spending in the coming years. These statements came after Prime Minister Pedro Sanchez said on March 13 that Spain would not cut social spending ''even a cent'' to increase military spending.

Spain's pledges come amid growing pressure from the United States, the European Union and NATO to increase defense spending. For years, Spain has failed to meet NATO's target to spend at least 2% of GDP on defense, in part because of the lack of any immediate military threats to the country and in part because of a political decision to prioritize welfare spending. In fact, Spain is currently at the bottom of defense spending in the alliance, with its defense expenditures totaling only 1.28% of its GDP in 2024. While Madrid has traditionally avoided any substantial pressure to increase military spending, the United States, the European Union and NATO have become more vocal about this issue in recent months. U.S. President Donald Trump has recently suggested that NATO members should increase their defense spending to at least 5% of GDP if they want to continue receiving U.S. military and political support. European Commission Ursula Von der Leyen is also pushing for the European Union's urgent rearmament, while NATO Secretary General Mark Rutte said that the alliance members should prepare to increase their defense spending by ''considerably more than'' 3% of GDP. Additionally, individual EU and NATO member states, especially in the Baltic and Northern European regions, have criticized insufficient military spending in southern Europe. Against this backdrop, Sanchez announced in early March that Madrid will take defense spending to at least 2% of GDP by 2029. Sanchez has also expressed support for the European Commission's plan to increase EU grants and loans for member states to increase their military spending.

Despite Sanchez's pledges, Madrid will find it hard to substantially increase military spending in the short to medium term because of insufficient domestic political support. Sanchez's Socialist Party (PSOE) leads a minority coalition government with the left-wing Sumar party, which means that the government cannot approve a budget without support from other parties in parliament. In fact, Sanchez failed to approve a new budget in both 2023 and 2024, which means that the 2022 budget has been rolled over twice. While Sanchez tried to approve a budget for 2025 earlier in the year, he has failed to gain enough parliamentary support. Moreover, military spending is a controversial issue in Spain, which was ruled by a dictatorship until the late 1970s and now has a large and generous welfare state. In parliament, Sanchez primarily also relies on support from small pro-independence political parties in Catalonia and the Basque Country, which oppose higher military spending. Even Sanchez's coalition partner Sumar is skeptical of expanding Spain's defense budget, especially if it comes at the expense of welfare spending. As a result, it will be very difficult for Sanchez to approve a budget for 2025, or even for 2026, that includes a significant increase in defense spending.

With a new budget unlikely to be approved anytime soon, Sanchez's government will resort to creative approaches to meet its pledge to increase military spending in the coming months. Domestically, the government will look for ways to redistribute spending within the framework of the current budget, which does not require a vote in parliament. While this will create friction between PSOE, Sumar and their allies, a compromise is likely because Sanchez will avoid any moves that could threaten the survival of his government. This means that a rise in defense spending is unlikely to be significant enough to trigger a government crisis at a time when the center-right and the far-right opposition parties stand to perform strongly in the case of an early election. To help pay for increased defense expenditures, Madrid will also look for additional ways to generate more government revenue. This will happen primarily through new or higher taxes, which will further increase Spain's already record-high tax burden and tax collection. At the EU level, Madrid will support any measures to increase joint borrowing and joint spending on defense, and will push for a more flexible use of other existing EU funds so that they can be redirected to military spending. Additionally, the Spanish government will push for a loose EU definition of what constitutes defense spending so that it can inflate its own figures, and will defend the idea that EU institutions, such as the European Investment Bank, should finance its defense-related projects.

On March 13, Sanchez said that for ''any eastern European or Nordic or Baltic country,'' the Russian threat demanded ''a response in which deterrence relies primarily on defense investment,'' but noted that this was ''not the case'' for Spain because Russia was not threatening to ''bring its troops across the Pyrenees [mountain range].'' For this reason, Sanchez called for a ''360-degree'' vision of security that includes hybrid threats and climate change.
Speaking about the prospects of increasing military spending through a new budget, Sanchez also said that ''all those things that have to go through parliament will go through'' but others ''will have to be accelerated and managed by the government.'' This indicates that Sanchez will try to avoid votes in the legislature on defense spending.

Spain's low levels of military spending will expose it to U.S. retaliation and limit its ability and desire to participate in an eventual deployment of European troops to Ukraine. In early January, Trump said that Spain's defense spending was ''very low.'' Then, in mid-March, he threatened to impose a 200% tariff on EU wine — a crucial Spanish export — and other alcoholic beverages after the European Union said it would raise tariffs on American whiskey and other products in the case of a trade war. While Trump's threat was not directly connected to Spain's military spending, his decision to target wine coincides with the fact that two of the three main European exporters of wine to the United States (Italy and Spain) are also two of the countries with the lowest defense spending in NATO. In the future, the United States could target other politically sensitive Spanish exports (such as olive oil) to pressure Madrid into increasing defense spending. The White House may also threaten to close the two U.S. military bases in Spain, Moron Air Base and Naval Station Rota. However, it would be unlikely to make good on such threats since these bases help the United States (and NATO more broadly) to project force to the Mediterranean, North Africa, the Atlantic and the Middle East. From a foreign policy perspective, Spain's domestic political situation and limited military resources mean that Madrid will only take a modest role in future European plans to provide additional military support for Ukraine. This includes any prospective European peacekeeping force in Ukraine, as Madrid will be far less willing (and able) to provide troops to such a mission compared with countries like France and the United Kingdom.

The United States is the second-largest market for Spanish wine, with exports reaching roughly $400 million in 2024. On March 14, Spain's lobbying group, the Spanish Wine Federation (FEV), urged Brussels and Washington to reach a compromise to avoid tariffs.
In recent weeks, France and the United Kingdom have taken the lead in the drafting of plans for an eventual deployment of troops to secure a peace agreement in Ukraine. Spain, however, has been considerably more cautious on the topic. While Madrid has continued to express political support for Kyiv, it has not pledged to deploy any troops in the case of a ceasefire. Spanish officials have repeatedly said that it is too soon to have any conversations in that direction.
According to data by the Kiel Institute, Spain has provided roughly 1.5 billion euros worth of military, financial and humanitarian support to Ukraine since 2022, which represents 0.1% of Spain's GDP. In terms of support to Ukraine, this ranks Spain 15th out of 41 countries in absolute terms (with the United States topping the list, with its aid contributions totaling 115 billion euros), and 28th in relative terms (with Estonia topping the list, with its aid contributions totaling 2.2% of GDP).