Boosting “Defence” Expenditure above 10% of GDP

TRANSCEND MEMBERS, 7 Jul 2025

Anthony Judge | Laetus in Praesens - TRANSCEND Media Service

Exploring Opportunities for Creative Reframing of National Budget Line Items

Introduction

5 Jul 2025 – Much publicity has been accorded to the outcome of the NATO Summit and The Hague Summit Declaration (25 June 2025). Most notably: Allies commit to invest 5% of GDP annually on core defence requirements as well as defence-and security-related spending by 2035 to ensure our individual and collective obligations, in accordance with Article 3 of the Washington Treaty. (NATO summit: Allies agree to spend 5% of GDP on defense, DW, 26 June 2025; Trump says NATO’s new 5% defence spending pledge a ‘big win’, BBC, 26 June 2025; NATO allies agree to boost defense spending to 5% at The Hague summit, DefenseNews, 25 June 2025).

This increase has been perceived as a major challenge for many countries with budgets that are already under severe strain. The United States currently allocates approximately 3.2–3.5% of its GDP to direct defense spending (Department of Defense budget), based on the latest available data. This does not include intelligence budgets (CIA, NSA ≈$100B) or emergency aid (e.g., Ukraine). Debate: Critics argue true national security costs (veterans, interest on defense debt, etc.) push the figure closer to 6–8% of GDP.

Given the failure of the The U.S. Department of Defense (DoD) to achieve a “clean” audit opinion for over 30 years (as noted below), and the many publicised instances of questionable defence expenditure, systemic waste, fraud, and mismanagement, there is a case for exploring how NATO countries might make use of a form of creative accounting. This could enable them to achieve far in excess of the 5% of GDP required by the NATO Summit.

Through a simple interaction with one AI (DeepSeek), it was estimated that 7-16% of a typical nation’s GDP — with a midpoint around 11-12% — could be credibly reframed as serving national defence. Readers could of course ask similar questions of other AIs of their choice — and question which budget items are not susceptible to reframing as vital to national security appropriately imagined. As with some other AIs, DeepSeek indicates its preliminary reflection on any question, then followed by its considered response. Both are presented below.

A striking example of such creative accounting was widely publicized immediately following the NATO Summit (Italy to reclassify 3.6km £11bn Sicily bridge as defence spending to meet NATO objectives, New Civil Engineer, 1 July 2025; Italy’s grand plan to meet NATO target: a €13.5B bridge to Sicily, Politico, 30 June 2025).

The possibility of reframing government priorities fruitfully calls into question what is “defence” and the nature of the emergencies for which appropriate preparedness is required — as may be speculatively argued (Preparing for the Emergence of Collective Awareness, 2025). Although it has now ceased to function, this was a preoccupation of the NATO Committee on the Challenges of Modern Society (NATO/CCMS), a scientific research committee created in 1969 to study environmental problems of various nations, and the quality of life of their people. With many now preoccupied by the threat of global warming and rising sea levels, the current narrow NATO focus on military defence recalls the apocryphal anecdote of King Canute of England.

Allusion continues to be made to the tale in contexts where the futility of “trying to stop the tide” of an inexorable event is indicated, but usually by misrepresenting Canute as believing he had “supernatural powers” — as many assume those of NATO to be (as now understood in terms of nuclear capability). Ironically, as noted by Michael McGuire, Canute was cited in a report on NATO enlargement (Memorandum submitted on the Future of NATO, Minutes of Evidence, UK Select Committee on Defence, 13 April 1999).

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