Why Spain is Nato’s laggard on defence spending

Pedro Sánchez is a staunch supporter of Ukraine in the face of Russian aggression. But the Spanish prime minister’s rhetoric contrasts with the country’s meagre defence spending, the lowest among Nato members.

The EU’s fourth-biggest country by population and economic size, Spain will this year spend less on defence as a proportion of GDP than any other country in the 32-member alliance, according to Nato forecasts.

That leaves Sánchez vulnerable to criticism as he joins other Nato leaders in Washington on Tuesday for a summit of the US-led alliance, which is intended to show unwavering support for Kyiv.

Looming large at the event is the prospect of Donald Trump returning to the White House after the presidential election in November and his threat to encourage Russia to do “whatever the hell it wants” with members that do not spend enough.

“Spain is an important missing piece,” said Fabrice Pothier, an ex-Nato head of policy planning. “You can’t have a Europe with just three main defence spenders — the UK, France and Germany — then have a missing middle.”

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Nato members have pledged to spend at least 2 per cent of GDP on defence. Only 10 met that target last year, but Nato predicts the number will jump to 23 this year as US pressure and the Ukraine war focus minds. The alliance predicts Spain will not be among them, spending just 1.28 per cent of GDP in 2024.

After years of under-investment, Sánchez vowed two years ago to reach 2 per cent by 2029. He has logged four consecutive years of rising outlays as a proportion of GDP, spending $18bn last year.

But the barriers to Spain spending more are mainly political and cultural. Their roots lie in pacifist leanings borne of a history that includes a military dictatorship, said Carlos Miranda, a former diplomat who served as Spain’s ambassador to Nato.

“Everything that is military, everything related to war, is unpopular,” he said. “If the government says it’s going to buy another tank, the response is: you could have built a school with the money.”

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When Ukrainian President Volodymyr Zelenskyy visited Madrid in May, Sánchez announced Spain would give Ukraine €1bn to “strengthen its capacities”. However, the funds came from the existing defence budget.

After weeks of Spain refusing to say whether it would answer Ukraine’s plea for one of its Patriot air defence systems, it was Zelenskyy himself who, standing next to Sánchez, concluded: “Spain, on its own, cannot help us on this issue.”

Last year Madrid agreed to give Kyiv some of its German-made Leopard tanks. But first it had to repair some of the vehicles, which had been mothballed since 2012. Margarita Robles, defence minister, said they were in an “absolutely deplorable” state, drained of oil and missing critical parts.

The state of the Leopards highlighted complaints by defence officials that their sector has been treated as an “ugly duckling” in budgetary planning.

The country “has the ingredients to lift itself up”, said Pothier, who is now chief executive of Rasmussen Global, a consultancy working for the Ukrainian government. “It’s really a question of will and geopolitical comfort.”

Sánchez has been unable to pass a 2024 budget amid a series of electoral ructions, forcing him to roll over last year’s fiscal plans. A Spanish government official acknowledged defence spending could not change meaningfully this year, but said: “The will is there.”

Washington would like Spain to invest in new air defence systems and join the US’s flagship F-35 fighter jet programme, according to people familiar with the matter. But they say it is grateful to Spain for letting US forces use its Rota and Morón naval and air force bases, which house some of the 2,000 US military personnel in the country.

Wariness of muscular militarism in Spain is bipartisan: there are no defence hawks in national politics arguing for significantly higher spending. Alberto Núñez Feijóo, the conservative opposition leader, is an unrelenting Sánchez critic, but the most he has asked for is higher salaries for the armed forces.

Pablo Casado, Feijóo’s predecessor as leader of the People’s party, told the Financial Times: “Defence issues are kept out of political confrontations.” Now a co-founder of Hyperion, a fund investing in defence-linked technology, Casado expressed confidence Spain was on track to reach Nato’s 2 per cent target.

According to Eurobarometer surveys, the proportion of Spaniards who see Russia’s full-scale invasion of Ukraine as a threat to their country — 75 per cent — matches the EU average.

But traumatic memories of the past loom large, quelling the appetite for an assertive military. Spain endured Francisco Franco’s dictatorship from 1939 to 1975, then saw the armed forces mount a failed coup in 1981.

The country only narrowly voted to stay in Nato in a 1986 referendum, with 43 per cent wanting to leave. In the early 2000s, according to some polls, nine in 10 Spaniards opposed the country’s involvement in the second Iraq war.

Many political leaders have concluded that being hawkish on defence does them no good, said Félix Arteaga, senior analyst at the Elcano Royal Institute, a think-tank. “Nobody is going to congratulate a Spanish prime minister for spending money [on the military]. They’re going to criticise him,” he said. “Everything to do with defence is seen as a risk.”

But executives in Spain’s defence industry say Sánchez seems to be working to change attitudes. Antonio Caro, head of arms maker Fábrica de Municiones de Granada, praised him for publicising a March meeting in which he urged more than a dozen industry leaders to invest more. “We were used to being hidden from view,” Caro said.

The prime minister’s allies say it is unfair to focus solely on spending as a proportion of GDP, noting Spain makes big contributions to Nato, EU and UN missions and deployments, which are not quantified in the figures. A Nato official noted that more than 600 Spanish troops are deployed on an alliance mission in Latvia, Spanish jets patrol allied airspace and the country’s ships form part of Nato fleets.

“We offer the argument that we may not invest enough, but we do things,” said Miranda, the former ambassador to Nato. “It might convince [US President Joe] Biden, but it may not convince Trump.”