Never, in his forecasts, Pedro Sánchez would have imagined that he would hold a press conference to announce an additional investment of 10.471 billion in Defense spending. His perspectives until not long ago were different. He, who even when he was Pedro Sánchez and not the Prime Minister, once said that the Ministry of Defense could be dispensable. But now he is Pedro Sánchez, head of the Government, and the geopolitical context has changed. Wars are back, Russia is a threat to Europe, the arrival of Donald Trump has shaken up NATO... And defense and security spending, as the Government calls it, is a priority. So much so, that faced with pressure from the Alliance and the EU to spend more now, Sánchez has announced that Spain will reach 2% of GDP in Defense spending this year, not in 2029 as previously committed. To achieve this, the Government will allocate a total of 33.123 billion euros this year to security and defense, which is 2% of GDP.
The international context has changed, and so has Spain's clock. Sánchez's commitment to reach that spending threshold by 2029 became outdated, under pressure, especially from NATO, to accelerate and increase that spending urgently. In fact, in the meeting held at the end of January in La Moncloa between Sánchez and NATO Secretary General Mark Rutte, Rutte already conveyed the "urgent need to invest more now" in Defense. Rutte, who a few weeks ago anticipated that Spain would reach 2% by summer, a statement that the Government clarified.
The National Plan for the Development and Promotion of Technology and the Security and Defense Industry was announced by Sánchez on March 26 in Congress and was approved this Tuesday at the Council of Ministers meeting, where Sumar expressed its rejection and presented observations.
Clash in the coalition and bypassing Congress
The magenta party considers it "truly exorbitant" and that it is a "huge" amount of money that, in its opinion, "does not reflect a vision that generates consensus within the Government." They have even requested its "removal from the Council of Ministers agenda."
Sánchez has tried to soften this clash, disguising it as "disagreements" that, according to his version, "we have managed through dialogue and respect." In fact, he has stated that "there is consensus between both partners on most points of the plan. The coalition government is united behind this plan, with some nuances."
These almost 10.5 billion will not go through Congress, meaning they will not be subject to a vote by the groups because, Sánchez argues, they are budget reallocations and do not imply an increase in the Budget - the 2023 Budget is in force - or involve tax hikes.
Military spending is a delicate issue for La Moncloa because it faces opposition from its governance partners. Even Sumar, at least the parties within it - IU, Compromís, or La Chunta - do not agree, as reflected in their observations, despite Yolanda Díaz showing a more ambiguous and understanding position towards the PSOE. This has forced Sánchez to commit that accelerating and increasing defense spending will not lead to cuts in social spending.
The Prime Minister will appear in Congress to explain this plan, but with no further implications. Defense Minister Margarita Robles was present at Sánchez's press conference but, as is customary in these months when military spending is addressed, she remained in the background.
"The world of yesterday no longer exists. Reality is different, and we as a Government must respond to it," Sánchez defended to justify this budget shift and the need to undertake and accelerate defense and security spending. "There is a cross-cutting consensus across the EU, transcending political families and regional priorities, that we are facing an era change that obliges us to take control of our own destiny and build that European Union of security and defense proposed by the EU's founding fathers."
2.000 million for "deterrence instruments"
The so-called Industrial and Technological Plan for Security and Defense foresees that the remaining 10.471 billion in 2025 will be allocated to up to six items. The largest amount, 35.45% (3.712.49 million), is planned for working conditions, training, and equipment for the Armed Forces. The second-largest amount, 31.16% (3.262.76 million), will be for new telecommunication technologies and cybersecurity.
The most controversial item, euphemistically referred to as "defense and deterrence instruments", meaning weapons, ammunition, etc., accounts for 18.75% (1.962.98 million). 16.73% (1.751.53 million) will go towards support for emergency and disaster management; while 3.14% (328.74 million) will be for missions abroad.
The final amount (10.471.14 million) is adjusted with adjustments and returns of credits for previous Special Modernization Programs worth 547.36 million (-5.23%).
A few weeks ago, Pedro Sánchez held a series of meetings with companies in the aerospace, telecommunications, security, and defense sectors, as well as with executives from the Spanish cybersecurity sector. In these meetings, in addition to exchanging views, the Government, according to sources familiar with the meetings, inquired about the investments and projects these companies have underway or in the pipeline, many of them leading, to assess which ones could contribute to increasing Spain's Defense spending bill to be presented to NATO in the coming weeks.
Sánchez argues that this plan does not need to go through Congress because "it is a budget reallocation, not requiring additional effort." In other words, no additional spending will occur; instead, budget modifications will be made, moving money here from there, taking advantage on this side... "What we are doing is using the surpluses, the savings generated."
The question then is, where does the money come from? For example, the deficit of all public administrations stood at 44.597 billion euros at the end of 2024, equivalent to 2.8% of the GDP and two tenths below the target committed to the European Commission. This provides the Government with a fiscal margin of around 3.200 million to allocate to this plan.
Another example. In the 2023 Budget, which is currently in force, there was a provision of 1.700 million to compensate local entities for the drop in tax revenues due to the economic slowdown caused by the pandemic. This money is reallocated to this plan. Similarly, funds from European sources will be reallocated, and investments such as the 1.200-1.300 million from the National Cybersecurity Plan will be included.