Greek Prime Minister Kyriakos Mitsotakis and German Chancellor Friedrich Merz (not pictured) speak to the media following talks at the Chancellery on May 13, 2025 in Berlin, Germany.
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It would be challenging for NATO members to deliver on U.S. President’s Donald Trump’s defense spending demands, Greece’s prime minister told CNBC.
The White House leader has frequently called for NATO nations to increase their security contribution to 5% of their gross domestic product — a target Greece’s Kyriakos Mitsotakis questions can be met.
“I think 5% frankly, is very, very difficult,” he said in an interview with CNBC’s Silvia Amaro that was aired on “Europe Early Edition” Friday.
“If we’re talking about hard defense spending, I think 3.5% is probably the ceiling of … what could be sort of accepted,” Mitsotakis said.
He nevertheless noted that the 5% mark could be a long-term target if broader expenses such as critical infrastructure were to fall under the spending umbrella.
“So it really depends on how we do the accounting,” he noted.
NATO chief Mark Rutte has reportedly suggested that NATO members should increase defense spending to 3.5% of GDP, while committing an additional 1.5% to wider security-related matters.
Many NATO countries have historically struggled to meet the alliance’s currently lower 2% target, earning Trump’s ire.
NATO estimates suggest the U.S. spent around 3.4% of its GDP on defense in 2024, with only two other allies — Poland and Estonia — allocating a bigger share of their economic power to security matters over the period.
Poland has also already committed to boosting its defense spending to a level as high as 5% in the coming years, while other countries have been more cautious, warning that such expenditures could be difficult for them to manage.
German Foreign Minister Johann Wadephul last week also indicated that the country was backing Trump’s target. The result of Rutte’s suggestion was “indeed the 5% demanded by President Trump, that he believes are necessary, and we are following him in this respect,” he said.
A decision about new defense spending targets could be made at the next NATO summit in late June.
Speaking to CNBC, Greece’s Mitsotakis said Trump was right to demand more defense expenditures from NATO allies.
“Donald Trump was right when in 2017 he said you’re not doing your fair share, because we didn’t,” he said. “We understand now that there is no free lunch and we cannot free ride.”
Greece itself spent nearly 3.1% of its GDP on defense last year, NATO estimates. Athens has been consistently exceeding the 2% target for many years and began ramping up defense expenses further in 2020 amid long-running tensions with its neighbor Turkey over issues including maritime borders.
“We spend more than 3% for very specific reasons, and we were also advocating very much for a change in European rules to encourage us to be able to spend more,” Mitsotakis said, adding that there had been some progress in this area.
European Union fiscal rules have for years restricted the extent of debt and budgetary deficits that a member country can incur. Recently, the European Commission has made moves toward easing fiscal constraints as part a wider security package.
Speaking to CNBC, Mitsotakis — who has previously said the European Commission’s plans could be more ambitious — noted it was also important to continue discussions about a potential European facility to support defense spending.