NATO budget
Executive summary
NATO’s common-funded budgets are modest and tightly defined: roughly EUR 4.6 billion in 2025 and up to EUR 5.3 billion in 2026, with the Alliance agreeing a 2026 Civil Budget of EUR 528.2 million and a Military Budget of EUR 2.42 billion to sustain headquarters, the integrated command structure and operations [1] [2]. These common funds sit alongside far larger national defence expenditures and new political targets — including the 2% GDP benchmark and a post‑2025 push toward higher targets such as 3.5% and an aspirational 5% by 2035 — that are reshaping burden‑sharing debates [3] [4] [5].
1. What the common-funded NATO budget actually pays for
NATO’s jointly funded budgets are not a general war chest but pay for the Alliance’s international staff, command structures, Allied operations and shared infrastructure such as air and naval bases, satellite links and command-and-control systems; the Civil Budget for 2026 is EUR 528.2 million and the Military Budget EUR 2.42 billion, resources intended to enable interoperability, exercises and crisis response rather than to equip national militaries [1] [2].
2. Scale: common funds versus total Allied defence spending
Even after recent increases, NATO’s common-funded budgets are small relative to collective defence outlays — NATO reported common budgets representing roughly 0.3% of total Allied defence spending in 2025, underscoring that most of what defends Europe is bought and paid for at the national level, not through NATO’s pooled accounts [1].
3. The US share and a frequent misconception
Popular claims that the United States pays two‑thirds of NATO’s “budget” misread the finances: Reuters noted the US contributes about 15.8–16% of NATO’s common-funded budgets, and the vast bulk of American financial weight in the Alliance occurs through national defence spending and forces provided to NATO operations rather than line items in NATO’s civilian or military budgets [6].
4. New political targets and the budgeting ripple effects
Since the 2014 pledge to reach 2% of GDP on defence by 2025 — a goal NATO says all members reached in recent reporting — the Alliance has pushed further: a 2025 summit set a trajectory toward spending 3.5% of GDP on agreed definitions of defence-related items and an aspirational 5% on core defence requirements by 2035, commitments that will materially change national budget processes and influence NATO common funding lines like the NATO Security Investment Programme (NSIP) [3] [4] [5].
5. Where the money for NATO common programmes increases most visibly
Part of the 2026 funding picture includes rising NSIP requests — the U.S. Department of Defense sought $481.8 million for the NSIP in FY2026, a reflection of allied agreement to boost NATO’s infrastructure spending to support territorial defence and command adaptation — and NATO documents say common funds will be stepped up through 2030 to resource capability requirements [7].
6. Political messaging, risks and accountability questions
Political leaders use headline numbers to signal resolve — NATO framed the 2026 budgets as making the Alliance “stronger, fairer and more lethal” — but analysts warn that raising targets (to 3.5% and 5%) risks outpacing national absorptive capacity, reducing parliamentary oversight where classified capability targets drive spending, and shifting debates from how much is spent to how effectively and transparently it is spent [2] [8].