In recent months, discussions surrounding the increase of defense spending in Spain have gained considerable momentum, although a definitive target ratio and specific areas for investment have yet to be established.

The Spanish government has pledged to raise defense spending to 2% of GDP by 2029, fundamentally opposing a traditional approach to defense spending.

This stance was articulated by Prime Minister Pedro Sánchez following the latest European Council meeting, where he rejected a rearmament strategy focused on physical attack capabilities.

The analysis of defense spending ratios and composition varies significantly depending on the methodologies applied; however, a notable surge in expenditure on defensive materials has been observed since the onset of the conflict in Ukraine in February 2022. Spain is participating in this broader rearmament effort, with new investments primarily directed towards cybersecurity, technology, and human capital training.

Data from the Functional Classification of Public Administrations (COFOG), which provides a national accounting perspective, highlights an increase in expenditure following Russia's invasion of Ukraine, particularly in defensive materials and technological investments aimed at enhancing military capabilities during conflict.

Notably, Spain's spending on intermediate consumption rose by 61.8% in 2023 compared to 2021, attributed to a bolstering of stocks of materials and munitions.

Additionally, there was a 23.7% increase in gross fixed capital formation spending, reflecting improvements in logistics support for command, control, intelligence, and cybersecurity systems.

Despite the increases in these two categories, the overall expenditure, totaling €3.599 billion and €3.295 billion respectively, still falls short of the greatest expense: the salaries of defense personnel.

The costs for paying military personnel amounted to €6.941 billion in 2023, a rise of 5.2% from 2021, largely due to increased wages agreed upon for public employees.

However, when comparing the share of salaries within the historical context of defense spending, the percentage has reached a low not seen since 2005; the figures for 2022 and 2023 represent 49.6% of defense spending, down from 60% in 2019.

The methodology for measuring defense spending utilized by the European Commission defines the increase margin available for member states over the next four years without incurring excessive deficit protocols.

Concurrently, other publications report a rise in traditional rearmament as well as capabilities related to technology.

According to NATO calculations, Spain allocated 30.3% of its defense budget in 2024 to equipment, which encompasses the acquisition and maintenance of major assets, such as tanks, as well as research and development.

This measurement reflects an increase of 7.8 percentage points compared to 2021 and represents a doubling of its proportion within the budget since 2014. The surge in equipment spending is considered to have significant potential for stimulating economic growth in Spain and other EU nations, contingent upon production occurring within European borders.

Presently, approximately 80% of Europe’s defense equipment purchases are made externally, with over 60% procured from the United States.

Furthermore, data from the European Defence Agency, referenced in the European Commission's white paper, indicates that expenditures for defensive material acquisition across the EU exceeded €90 billion in 2024 out of a total defense spending of €326 billion.

This category has seen an increase of more than 50% in the past year.

Spain's defense spending composition has historically diverged from the EU average, primarily due to a higher proportion allocated to salaries and a lower share to intermediate consumption, which includes defensive material.

However, recent data indicates a narrowing of this gap, reflecting reactions to the situation in Ukraine and the commitment made in 2022 to spend 2% of GDP as pledged to NATO.

Notably, more pronounced differences in spending priorities are evident when comparing Spain to nations such as Finland and Sweden, which recently joined NATO.

In Finland and Sweden, both countries prioritized intermediate consumption in their defense budgets, accounting for 42.6% and 41.8% of total defense spending in 2023, respectively.

While Sweden's absolute spending on defensive materials exceeds Spain's, its total defense budget is 32% lower.

Finland, conversely, has seen negligible investment in this area.

Hungary stands out for directing a substantial share of its funds towards defensive materials and investment, with salaries comprising only 19.6% of its defense budget.

Currently, Spain remains significantly below the intended 2% target when measured by any methodology.

The latest COFOG data for 2023 indicates that Spain's defense spending stands at 0.93% of GDP, marking a decrease of two tenths from 2022. The accounting practices established mean that military equipment and support systems are only counted once they are delivered to the Ministry of Defence, a timeline that has reportedly been delayed.

NATO, however, presents a slightly more favorable picture with an estimated defense spending of 1.28% of GDP for 2024. NATO’s higher estimates include additional expenditures not counted in COFOG, such as pensions for retired military personnel and military-related civilian expenditures.