NATO Spending: Military vs. Health and Education

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Jul 16, 2025

How much do NATO nations spend on defense vs. health and education? Dive into the surprising data and what a 5% GDP military target means for the future...

Financial market analysis from 16/07/2025. Market conditions may have changed since publication.

Have you ever wondered how governments decide where to pour their money? It’s a bit like trying to split a pizza among hungry friends—everyone wants a bigger slice, but there’s only so much to go around. For NATO countries, the balancing act between military spending, healthcare, and education is a high-stakes game with global consequences. With NATO’s recent push to raise defense budgets to 5% of GDP by 2035, I can’t help but wonder: what does this mean for the hospitals and schools that shape our societies? Let’s dive into the numbers and explore how these priorities stack up.

The Big Picture: NATO’s Spending Priorities

NATO countries face a tough question: how much should they invest in tanks versus teachers, or fighter jets versus hospital beds? The alliance’s new target of allocating 5% of GDP to defense by 2035 has sparked debates about whether this shift will tip the scales away from public services. To understand the stakes, we need to look at what these nations currently spend on defense, health, and education—and what a future with higher military budgets might look like.

Where the Money Goes Today

Right now, every NATO country spends more on health and education than on defense. That’s no surprise—healthcare and schools are the backbone of any thriving society. But the gap between these priorities varies wildly across the alliance. For example, Poland leads the pack with 4.1% of its GDP going to defense, while Iceland sits at a jaw-dropping 0%. Meanwhile, health spending in the U.S. towers at 16.5% of GDP, dwarfing its 3.4% military budget. It’s a fascinating mix, and the numbers tell a story of competing needs.

CountryMilitary (% GDP)Health (% GDP)Education (% GDP)
Poland4.17.04.7
Estonia3.47.05.3
United States3.416.55.4
Latvia3.27.64.6
Greece3.18.54.1
Germany2.111.84.5
Canada1.411.24.1
Iceland0.09.07.1

The table above highlights a few key players, but the trend holds across all 31 NATO members: health and education take the lion’s share of budgets. Still, the push for 5% defense spending could flip this dynamic for many nations, especially in Europe, where military budgets have historically been modest.


Why Military Spending Is Climbing

Geopolitical tensions are like a storm cloud on the horizon, and NATO countries are bracing for impact. Russia’s invasion of Ukraine has been a wake-up call, especially for Eastern European nations like Poland and the Baltic states. These countries, geographically closer to the conflict, are ramping up defense budgets faster than their Western counterparts. For instance, Poland’s 4.1% of GDP on defense reflects its front-line status in the region. But even countries like Germany, long criticized for low military spending, are starting to pivot.

Security is the foundation of prosperity, but at what cost to our schools and hospitals?

– European policy analyst

It’s not just about external threats. Political pressures, particularly from influential NATO members, are pushing for higher defense contributions. The U.S., which spends nearly $1 trillion annually on defense, has long argued that European allies need to step up. This sentiment, amplified by recent political rhetoric, has put pressure on nations to meet or exceed the new 5% target. But here’s the rub: where will the money come from?

The Trade-Offs: Health and Education at Risk?

In my view, the most troubling aspect of this shift is the potential squeeze on public services. Health and education are already stretched thin in many countries. Take the U.S., where healthcare eats up 16.5% of GDP—more than any other NATO nation. Cutting back on hospital funding or school programs to bolster defense could spark public backlash. In Europe, where social welfare systems are a point of pride, the trade-offs are even starker.

  • Health spending: Critical for aging populations and public health crises.
  • Education investment: Shapes the workforce and innovation of tomorrow.
  • Military budgets: Essential for national security but often less visible to citizens.

For countries like Sweden (10.9% GDP on health) or Norway (8% on health), diverting funds to defense could mean fewer hospital beds or outdated school facilities. It’s a tough sell to voters who value accessible healthcare and quality education. Yet, the 5% defense target would require 21 NATO countries to spend more on their militaries than on schools—a dramatic shift in priorities.

A Closer Look at Key Players

Let’s zoom in on a few countries to see how these dynamics play out. Poland, for instance, is a standout. Its 4.1% defense spending is driven by its proximity to Ukraine and a history of regional tensions. Yet, it still allocates 7% of GDP to health and 4.7% to education, showing a commitment to balancing priorities. Compare that to the U.S., where defense spending (3.4% of GDP) is dwarfed by healthcare costs but still amounts to a staggering dollar figure due to the country’s massive economy.

Then there’s Iceland, the outlier with no standing military, spending 0% on defense. Its focus on health (9%) and education (7.1%) makes it a model of prioritizing public services. But can Iceland’s approach work for countries facing direct security threats? Probably not. Each nation’s context shapes its choices, and that’s what makes this comparison so intriguing.


What Does the Future Hold?

The push for 5% defense spending is a game-changer. For many European nations, it’s a departure from decades of relying on the U.S. for security—a so-called “free ride” that’s now coming to an end. But meeting this target won’t be easy. Governments will need to either raise taxes, cut public services, or find creative ways to boost revenue. In my experience, these kinds of fiscal shifts rarely happen without heated debates and public protests.

A strong defense is vital, but so is a healthy, educated population.

– Global economics researcher

Perhaps the most interesting aspect is how this shift could reshape national identities. Countries like Germany and Canada, known for robust social programs, might face pushback if defense budgets overtake education or health. Meanwhile, nations like Poland and Estonia may double down on military investments, prioritizing security over other needs. It’s a balancing act that will test political will and public patience.

Finding the Right Balance

So, how do you balance guns, doctors, and teachers? It’s like trying to juggle while riding a unicycle—not impossible, but it takes serious skill. NATO’s 5% defense target is a bold move, but it raises tough questions about what societies value most. Personally, I think the answer lies in smarter spending—investing in technologies that make defense more efficient or finding ways to integrate health and education into national security strategies.

  1. Optimize budgets: Streamline military spending to avoid waste.
  2. Protect public services: Safeguard health and education funding.
  3. Engage the public: Build support for balanced fiscal policies.

The data shows that NATO countries are at a crossroads. The 5% defense target could strengthen the alliance but at the cost of straining public services. As citizens, we have a right to ask: are we prioritizing the right things? The answer isn’t simple, but it’s worth wrestling with.


Conclusion: A Global Balancing Act

NATO’s spending priorities reflect a world in flux. The push for higher defense budgets is a response to real threats, but it comes with trade-offs that could reshape societies. Health and education, the bedrock of progress, must hold their ground even as militaries grow. As we look to 2035, the challenge will be finding a balance that keeps nations safe without sacrificing the services that make them strong. What do you think—can NATO countries pull it off?

This isn’t just about numbers; it’s about values. The choices made today will echo for decades, shaping the kind of world we live in. So, next time you hear about defense budgets or healthcare cuts, take a moment to think about what’s really at stake.

What we learn from history is that people don't learn from history.
— Warren Buffett
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