U.K. Defense Secretary John Healey resigned Thursday after clashing with Prime Minister Keir Starmer's government over military spending, dealing the British leader a setback weeks before a critical NATO summit to include President Donald Trump.

Healey's departure stemmed from a dispute over the delayed Defense Investment Plan (DIP) — the government's long-promised roadmap for military investment and readiness — and as NATO allies face renewed pressure from Trump to boost defense spending.

"John Healey’s resignation is a seismic moment for the government and the Ministry of Defense," Royal United Services Institute (RUSI) Senior Associate Fellow Ed Arnold told Fox News Digital.

"For the government, it creates a sequence of political headaches in terms of a replacement, and trying to get the Defense Investment Plan published."

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Healey had been in intense, late-stage negotiations with Starmer and Chancellor of the Exchequer Rachel Reeves over the scale and timelines of the DIP.

Starmer reportedly refused to set out a timeline to reach 3.5% of gross domestic product (GDP) on defense by 2035 — a promise he made to Trump at last year's NATO summit — and would not commit to a firm date for reaching 3%.

Instead, Starmer offered Healey a deal to spend 2.68% of GDP on defense by 2030, up only marginally from 2.6% next year, Reuters reported.

"You have been unable, and the Treasury has been unwilling, to commit the resources that the nation needs to defend the country," Healey wrote to Starmer in his resignation letter, warning that the financial constraints would "make the country less safe," the outlet reported.

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"If the delay to the Defense Investment Plan was already undermining the government’s credibility on defense, John Healey’s resignation has blown a hole in its side," professor Kevin Rowlands of the RUSI defense and security think tank told Fox News Digital.

"The immediate consequence is not just political embarrassment for No. 10, but a significant loss of planning certainty at a time when the British Armed Forces, the Ministry of Defense, and industry really need clarity on what will be funded, and when," he added.

The political fallout is expected to reverberate across the Atlantic, where Washington has increased pressure on European allies to fulfill their defense obligations. Trump has frequently criticized NATO alliance members as "free riders."

On June 3, Secretary of State Marco Rubio also told the House Foreign Affairs Committee that the upcoming Ankara summit would be the "most important meeting" in NATO’s history because there are some things "that need to be cleared up and fixed."

He added, "The United States is still in the NATO alliance, and we'll be there."

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However, U.S. officials have made it clear that patience is wearing thin.

"Ahead of next month’s NATO summit, POTUS has been clear: Allies must fulfill their commitment to spending 5% of GDP on defense," U.S. Ambassador to NATO Matthew Whitaker posted on X this week.

Furthermore, a U.S. official noted that a U.K. funding package far lower than 18 billion pounds ($23 billion) would send a highly "negative" signal to Trump ahead of the Ankara meeting, according to The Times.

Starmer has pledged to lift spending to 3% in the next Parliament but Healey’s exit has exposed that the current strategy leaves the U.K. lagging behind key allies. By comparison, Germany plans to spend 3.7% of its GDP on defense by 2030.

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"Healey knows the threats we face, he knows the capabilities and shortfalls the armed forces have, and if he believes that the financial settlement is not enough to keep the country safe — to the extent that he cannot honorably stay in post — then we are in trouble," Rowlands added.

"While the impact will mainly be felt on Whitehall, the international implications are severe with a NATO summit just three weeks away," Arnold noted.

This is part six of a series examining the challenges confronting the NATO alliance.

As President Donald Trump presses NATO allies to shoulder more of Europe's defense burden, countries closest to Russia are moving fastest — while some of Western Europe's biggest economies face growing pressure to catch up. 

Retired Rear Adm. Mark Montgomery, senior director at the Foundation for Defense of Democracies and former deputy director for strategy, policy and plans at U.S. European Command, said the shift is already visible across the alliance.

"Europe is clearly stepping up, but they're stepping up by geographic variation," Montgomery told Fox News Digital.

"If you ask me who's doing the most, the Eastern Europeans are clearly."

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Montgomery pointed to the Baltic states, Poland, Romania and Bulgaria as countries moving aggressively to strengthen deterrence against Russia.

His assessment comes as NATO allies work toward a new defense spending benchmark agreed at the 2025 summit in The Hague, which calls on members to invest 5% of GDP in defense and security-related spending by 2035, including 3.5% for core defense requirements and 1.5% for defense-related infrastructure and security investments.

John Deni, a research professor at the U.S. Army War College, said the trend shouldn't be surprising. 

"Given the threat of Russia, allies in the East are acquiring capabilities more quickly, and they're spending even more than allies in the West," Deni told Fox News Digital. "This shouldn't surprise us because they're the ones closest to the threat."

Deni noted that many eastern allies are rapidly purchasing equipment already available on the market rather than waiting years for domestic defense programs to mature.

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The transformation is visible across NATO's eastern and northern flanks. Poland has become one of the alliance's largest military spenders, Romania is increasing defense investments, and Finland and Sweden have added advanced military capabilities to NATO following their accession.

Secretary of State Marco Rubio praised Finland and Sweden Thursday at the Senate Foreign Relations Committee hearing, using them as examples of allies strengthening the alliance.

"Sweden and Finland have actually contributed because they brought their own defense industry, their own advanced technology," Rubio said. "They have been great partners." 

Romanian Foreign Minister Oana-Silvia Ţoiu echoed that message in an interview with Fox News Digital following an emergency U.N. Security Council session convened after a Russian drone strike injured civilians in the Romanian city of Galați.

"We do agree with President Trump on the need to increase budgets," Ţoiu said.

Ţoiu said Romania raised defense spending to 2% of GDP during Trump's previous term and plans to allocate "an average of 3.4 percent" next year through military procurement and strategic infrastructure investments.

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"We have launched initiatives that are directed at the eastern flank because it is increasingly more clear that that needs to be protected," she said.

She argued that Romania's role extends beyond national defense.

"We need better deterrence, better defense capabilities there in order to ensure our responsibility in protecting not just the Romanian border, which is the longest border to the war, but also it is in the same time a European border and the border of the Allied territory," Ţoiu said.

For frontline states, the urgency is driven by geography as much as politics. Romania shares a border with Ukraine and repeatedly has dealt with Russian drones entering its airspace. Poland has become one of NATO's top military spenders, while the Baltic states are racing toward defense expenditures approaching 5% of GDP.

Montgomery said the eastern flank's urgency contrasts sharply with the pace in much of Western Europe.

Among the continent's five largest economies, and despite a slight decrease in military spending in 2025, the U.K. remains the largest investor relative to GDP, with 2.4%, trailed by Germany (2.3%), Spain (2.1%), France (2%) and Italy (1.9%), according to the Stockholm International Peace Research Institute (SIPRI).

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"The Germans are the one country, I think, with a large economy that is starting to make the right kind of investments."

Germany, he argued, could become the backbone of Europe's future defense industrial base.

"Germany developing a large, impressive defense industrial base is good for NATO, it's good for Western security, and it's even good for our primes," Montgomery said.

German Chancellor Friedrich Merz has embraced higher defense spending and backed NATO's new spending goals, positioning Berlin as a potential hub for Europe's future defense industrial base as allies seek to reduce long-term dependence on the United States.

But despite rising defense budgets, experts warn Europe remains heavily dependent on American military capabilities.

Barak Seener, a senior fellow at the Henry Jackson Society, said Europe still relies on the United States for many of the systems required to fight a modern war.

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"Europe is heavily dependent on NATO for its strategic airlift and sea lift, its air-to-air refueling, its cyber capabilities, its space assets, its intelligence, surveillance and reconnaissance," Seener said.

Without those capabilities, he warned, European forces would struggle to maintain situational awareness during a major conflict.

Montgomery said Europe faces three major challenges: expanding military capacity, rebuilding its defense industrial base and developing high-end support capabilities that have long been provided by the United States.

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"When you are freeloading for 30 years, you create enormous deficits in terms of people, equipment, technology and know-how," he said.

"The primary forces to defend Europe should be European," he said. "The United States should provide additional forces that allow maneuver and offensive operations."

Montgomery also criticized reported Pentagon deliberations over delaying long-range strike deployments to Germany and reconsidering future Tomahawk missile sales, arguing the systems are critical for deterring Russia.

"The goal here is not to fight Russia in the Baltics or in Poland. The idea here is we want to deter Russia from even trying to attack."

Looking ahead, Montgomery remains optimistic about NATO's future.

Montgomery predicted Europe will continue increasing defense spending and expanding its defense industrial base, while the alliance benefits from steadier transatlantic relations.

"I think you'll have a U.S. president that probably doesn't provoke the Europeans as much. You'll have Europe that's investing more," he said.

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He also predicted NATO Secretary-General Mark Rutte would be remembered for helping hold the alliance together through a period of significant change.

"I think five years from now, NATO will be stronger," he said. "And I hope we have Ukraine in there."