ANKARA — Leaders from the North Atlantic Treaty Organization (NATO) are scheduled to convene in Ankara, Turkey, next week for a summit aimed at reviewing defense spending and establishing a roadmap for new financial goals. This meeting follows a decision made at last year's summit where NATO allies agreed to increase defense expenditures.

During the upcoming summit, leaders will assess the progress made since the previous year's meeting. They are also expected to outline a plan to achieve a new core benchmark of 3.5% of GDP allocated to defense by each member nation.

Earlier this month, U.S. War Secretary Pete Hegseth announced a review of American forces stationed in Europe. Hegseth cautioned that allies failing to meet their spending commitments could face consequences. This review is anticipated to continue for up to six months.

Hugues Lavandier, a senior partner at McKinsey, commented on the situation, stating, "There is no question that the evolving U.S. geopolitical stance has been a real moment of truth." He added that the situation has prompted a reassessment in Europe, noting, "It has accelerated Europe's recognition that the period of the peace dividend was behind us and that governments needed to reinvest in defense capabilities."

Since Russia's 2022 invasion of Ukraine, European defense companies such as Rheinmetall, BAE Systems, Leonardo, Thales, and Saab have reported increased orders. McKinsey's calculations indicate that European NATO core defense spending has doubled since 2019. The firm projects that this spending could reach approximately 800 billion euros by the end of the decade.

Despite increased spending, equipment stocks in European NATO countries remain below 2021 levels. A February report from McKinsey identified that Europe's platform fragmentation is more than four times higher than in the United States. S&P Global Ratings has indicated that many European defense suppliers are small businesses with limited capacity to raise equity for expansion.