NATO Allies Pledge 1.5% Of GDP To Boost Cybersecurity & Protect Critical Infrastructure

Uploaded on 2025-06-25 in NEWS-Cybersecurity News, GOVERNMENT-Defence, FREE TO VIEW

On 25 June 2025, NATO leaders, gathered at the annual summit in The Hague, agreed to a landmark defence spending target of 5% of GDP by 2035, with 1.5% earmarked specifically for cybersecurity and critical national infrastructure protection.

This decision, driven by mounting geopolitical tensions and the growing sophistication of cyber threats, marks a significant shift in how the alliance defines defence expenditure.

The move responds to persistent calls from US President Donald Trump for European allies to shoulder more of the collective security burden, while addressing urgent vulnerabilities in digital and physical infrastructure.

Responding To Contested Cyberspace

The 1.5% allocation, detailed in NATO’s new spending framework, will fund cybersecurity, border and coastal security, and infrastructure upgrades such as roads and bridges capable of supporting military convoys. A Bloomberg report from May 2025 noted that NATO proposed including these expenditures to meet the alliance’s ambitious 5% GDP target, with 3.5% allocated to “hard defence” like troops and weapons.

The decision reflects the alliance’s recognition of cyberspace as a contested domain, with daily malicious cyber events ranging from low-level attacks to sophisticated campaigns targeting critical systems.

Russia’s ongoing war in Ukraine and China’s hybrid cyber operations have underscored the need for robust defences, as highlighted in NATO’s 2024 cyber defence policy update.

Economic & Strategic Implications

The commitment to 1.5% of GDP for infrastructure and cybersecurity is poised to transform the global cybersecurity market. A data visualisation from Ainvest projects that NATO-related spending could drive 40% of the sector’s growth, with annual cybersecurity expenditures potentially surpassing $500 billion by 2032.

This surge will benefit firms specialising in threat detection, encryption, and infrastructure protection, such as Palo Alto Networks and CrowdStrike. However, the financial strain is significant. European allies and Canada, who increased defence spending from 1.43% of GDP in 2014 to 2.02% in 2024, face challenges in meeting the new target, particularly southern members like Spain, which secured flexibility to spend only 2.1% on core defence.

Challenges & Dissent

Spain’s reluctance to fully commit to the 5% target, as reported by Reuters, highlights tensions within the alliance. Prime Minister Pedro Sánchez argued that 2.1% of GDP suffices to meet NATO’s capability targets, a stance that drew criticism from US officials and NATO Secretary-General Mark Rutte, who insisted Spain must align with the 3.5% core defence goal. Despite these challenges, countries like Norway and Poland are already on track to meet or exceed the 5% target, driven by proximity to Russia and heightened security concerns.

A Step Toward Resilience

The pledge, set for review in 2029, requires allies to submit annual plans to ensure incremental progress. As NATO Secretary-General Mark Rutte warned, Russia could pose a military threat to the alliance within five years, making investments in cybersecurity and infrastructure critical.

In expert comment, Jamie Moles, Senior Technical Manager at ExtraHop said. "NATO’s allocation to protect critical infrastructure and bolster cyber resilience signals the notable link between cybersecurity and national security on the world stage. However, the real impact will come from how these funds are deployed...

With state-sponsored cyber attacks increasing in frequency and sophistication, investing in network visibility that detects threats before a major incident occurs is more essential than ever. Equally important is building resilience, not just preventing attacks, but minimizing complexity to ensure critical systems can recover quickly without disruption." Moles concluded.

This commitment signals NATO’s resolve to adapt to 21st-century threats, balancing traditional defence with digital resilience to safeguard the Euro-Atlantic area.

Image: Marek Studzinski

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