Nato’s European members need to find an extra €56bn a year to meet the alliance’s defence spending target, but the shortfall has halved in the past decade, according to research by Germany’s Ifo Institute for the Financial Times.
The research showed many of the EU countries with the biggest shortfalls in Nato’s target for defence spending to hit 2 per cent of gross domestic product — including Italy, Spain and Belgium — also have among the highest levels of debt and budget deficits in Europe.
The push for the 32 members of the US-led alliance to boost defence spending in response to Russia’s full-scale invasion of Ukraine is stoking budgetary pressures in Europe at a time of low growth and when many countries are tightening their fiscal plans. Economists say this will make it harder for the laggards to bridge the gap.