Dutch defense costs could top €25 billion under NATO target, Finance Minister warns

Dutch defense spending could rise to as much as 25 billion euros a year within the next decade if the country follows through on its commitment to meet a new NATO spending target, caretaker Finance Minister Eelco Heinen said Sunday.

Speaking on the television program Buitenhof, Heinen (VVD) said the current estimate for meeting the higher NATO standard — 5 percent of gross domestic product — is between 16 billion euros and 19 billion euros annually. But that figure will increase as the economy grows. “Because the norm is a percentage of the economy, the amount comes out higher,” he said.

The minister acknowledged the sums involved are substantial. “These are big amounts,” Heinen said, adding that “a sense of realism needs to return” to Dutch budgetary policy. He did not clarify exactly what he meant by that. However, he has previously criticized what he called “financial gifts” to citizens, arguing instead for investments. “Fundamental choices need to be made within the national budget,” he said.

Heinen said it would only become clear in the coming years how the additional military expenditures will be financed, indicating that the decision will likely fall to a future cabinet. In his view, NATO member states should each fund their increased military spending themselves, rather than borrowing collectively at the European level.

VVD party leader Dilan Yeşilgöz has also weighed in on the issue, saying she wants to finance the increased military spending primarily by significantly cutting back government expenditures. She acknowledged, however, that this approach likely will not be enough to raise the necessary billions.

Additional cuts to the development aid budget — currently around 3.5 billion euros — are also an option, she said. Yeşilgöz could not rule out tax increases, as it remains uncertain which parties the VVD might govern with in a future coalition.