NATO Secretary General Mark Rutte was clear about the need for an increase in military budgets after reports that the North Atlantic Alliance will set a new spending target of three percent of gross domestic product by 2030.

He said NATO countries should return to Cold War-era defense budgets to fend off Russia.

"Governments need to make more orders and defense contractors need to take more risks," Rutte declared in his first public appearance in Brussels after taking office, adding that "it is time to switch to a mindset of time of war."

NATO's current pledge is to spend at least two percent of gross domestic product for the protection of the member states of the Alliance.

"It is true that we spend more on defense now than we did a decade ago. But we're still spending far less than during the Cold War. Although the threats to our freedom and security are just as great – if not greater. During the Cold War, Europeans spent much more than 3 percent of their gross domestic product on defense," said the former Dutch prime minister.

Russia's rising defense spending shows the Kremlin is preparing for a long-term conflict with both Ukraine and other European countries, Rutte said, citing figures that put Moscow's military spending at more than 1/3 of the state budget. or over 6% of the gross domestic product.

NATO chief Mark Rutte also had a message for arms manufacturers: "Dare to innovate and take risks! … Put in extra shifts and new production lines”.

"We're not ready for what's coming in four to five years," he said.

Otherwise, there is a growing consensus among allies that the current two percent target is insufficient to implement regional defense plans and meet NATO's capability objectives.

The European Commission estimates that EU defense spending over the next decade should increase by 500 billion euros.

Poland's Finance Minister Andrzej Jan Domański said this week that two options are on the table for EU joint financing: First, EU countries could issue joint debt, although that would require a difficult unanimous decision on to be reached. A second option would be to create a special-purpose tool that countries could support on a voluntary basis.

However, countries like Germany are very reticent about such ideas and the EU is unlikely to make bold proposals before German elections in February, he said.

In the early 1980s, before the fall of the Soviet Union, European NATO members spent an average of about 3.8 percent of gross domestic product on defense./POLITICO