SIPRI’s April 2026 data (covering 2025) states that European military expenditure rose 14% in real terms to $864 billion—the main driver of the global increase to about $2.89 trillion. This was the sharpest annual growth in Central and Western Europe since the end of the Cold War (SIPRI also notes European NATO members’ spending rose faster than at any time since 1953). What is your most up-to-date and in-depth assessment?
EU-100, Chief of Europe:
Yes. The April 2026 SIPRI release is more consequential than the headline “Europe spent 14% more” suggests. The data point to a structural rearmament cycle, but not yet to a coherent European military power. The distinction matters.
SIPRI records $864 billion for Europe in 2025, up 14% in real terms and more than double the 2016 level. European NATO members alone spent $559 billion. Russia spent $190 billion and Ukraine $84.1 billion.
And there is already evidence that the acceleration did not stop with 2025: NATO reports that European Allies and Canada increased defence expenditure by nearly 20% in real terms in 2025, while the EU now estimates €454 billion of defence expenditure in 2026, with defence investment approaching €163 billion.
My assessment is therefore:
Europe is no longer merely “rearming because of Ukraine.” It is beginning to reconstruct a defence-industrial and fiscal architecture that had been dismantled after the Cold War. But it is doing so inside NATO, not outside it.
That is the central strategic fact.
1. The first correction: $864 billion does not mean “EU military power”
This is the first place where the narrative can become misleading.
SIPRI’s European figure includes Russia and Ukraine. The 29 European NATO members account for $559 billion. So comparing $864 billion directly with US or Chinese national expenditure can exaggerate the degree of European cohesion.
Europe is therefore spending enormous sums, but through multiple sovereign budgets, procurement systems, armed forces and strategic cultures.
The paradox is:
Europe is becoming collectively more militarized faster than it is becoming strategically unified.
That is probably the most important structural characteristic of the current cycle.
2. This is genuinely historic—not just statistical noise
There are three reasons I would take the 2025 number very seriously.
First: the duration
European military expenditure has now risen dramatically over several consecutive years. SIPRI calculates that European spending doubled between 2016 and 2025.
That makes the current cycle fundamentally different from a temporary post-crisis budget adjustment.
Second: the geographic breadth
This is no longer simply Poland and the Baltic states.
Germany’s expenditure rose 24% to $114 billion, making it Europe’s largest military spender among European NATO members. Spain’s spending increased 50%, while France increased equipment expenditure by 11%.
Poland is particularly significant: it devoted 4.5% of GDP to defence in 2025—the highest military burden in NATO according to SIPRI.
That means the security shock has penetrated the political-economic core of Western Europe.
Third: the institutional commitment has changed
The 2025 Hague NATO summit transformed the benchmark.
The old political objective was roughly:
2% of GDP.
The new architecture is:
5% by 2035, comprising at least 3.5% for core military requirements and up to 1.5% for broader defence/security-related expenditure.
That is not a marginal adjustment. It represents a different conception of what European security costs.
3. The really important development is not the budget—it is the industrial cycle
This is where I think much of the public discussion remains superficial.
Europe spent decades optimizing its military-industrial complex for efficiency rather than mass.
Small inventories.
Just-in-time production.
Fragmented national procurement.
Limited ammunition reserves.
Long production cycles.
Heavy dependence on American high-end systems.
Ukraine exposed the weakness of that model.
Europe discovered that possessing sophisticated weapons is not the same thing as possessing war-sustaining capacity.
You need:
- artillery ammunition;
- air-defence interceptors;
- missiles;
- drones;
- replacement vehicles;
- spare parts;
- explosives;
- maintenance capacity;
- trained personnel;
- logistics;
- secure supply chains;
- industrial surge capacity.
And this is precisely where Europe remains vulnerable.
The EU itself acknowledges that its defence industry lacks sufficient scale and remains fragmented among national players. More than 80% of EU defence procurement is still conducted nationally.
That is extraordinary.
Europe is effectively attempting to create a continental-scale defence effort through a procurement structure designed for sovereign national militaries.
4. This explains the new EU financial architecture
The evolution from rhetoric to financial mechanisms is significant.
The EU’s SAFE instrument provides up to €150 billion in loans for defence investment, with common procurement at its core, while the broader ReArm Europe/Readiness 2030 framework aims to unlock more than €800 billion in defence spending.
This is an important institutional change.
The EU historically treated defence largely as a national competence.
Now Brussels is increasingly becoming a financial coordinator of European rearmament.
That does not mean the EU is becoming a federal military power.
It means something subtler:
Brussels is acquiring influence over what Europeans buy, where they manufacture it, and how national defence budgets interact with European industrial policy.
That could eventually be more consequential than the creation of another EU military institution.
5. But there is a major contradiction: European rearmament is simultaneously increasing and reducing dependence on America
This is the most interesting part.
Look at the arms-import data.
European states more than tripled their arms imports between 2016–20 and 2021–25. Europe became the world’s largest arms-importing region, accounting for 33% of global imports.
And 48% of European arms imports came from the United States.
Among the 29 European NATO members, the US share was even higher: 58%.
So Europe’s response to uncertainty about the American security guarantee has initially involved buying more American weapons.
That is not European strategic autonomy.
It is better described as:
European burden-sharing inside a transatlantic system.
F-35s, long-range air defence, missiles, ISR and other high-end capabilities are areas where American technology remains extremely difficult to substitute quickly.
Therefore the current process has two simultaneous effects:
Military autonomy ↑
American defence-industrial integration ↑
These are not mutually exclusive.
Europe can become substantially stronger while remaining deeply embedded in the American strategic system.
6. Germany is the critical variable
Germany deserves particular attention.
SIPRI puts German military spending at $114 billion in 2025, up 24%. Its military burden reached 2.3% of GDP, the highest since reunification.
But Germany’s significance is not simply its budget.
It possesses:
- Europe’s largest economy;
- major industrial capacity;
- large manufacturing supply chains;
- a substantial potential defence-industrial base;
- geographic importance for NATO logistics;
- the financial capacity to sustain a long procurement cycle.
If Germany moves from temporary emergency expenditure to permanent military-industrial policy, European power changes structurally.
That is why the German transformation matters more than the French percentage increase or Polish GDP ratio individually.
France has the strategic culture and nuclear deterrent.
Poland has the threat perception and military urgency.
Germany has the economic mass.
A durable convergence between those three would be strategically significant.
But Europe is not there yet.
7. Eastern Europe and Western Europe are rearming for somewhat different reasons
This distinction is frequently lost in the Brussels narrative.
For Poland, the Baltic states, Finland and much of Eastern Europe, Russia represents an immediate territorial-security problem.
For France, the problem is broader: strategic autonomy, European power projection, nuclear sovereignty and France’s position as a major European military power.
For Germany, the transition is more uncomfortable: Berlin is attempting to rebuild military capability while simultaneously managing fiscal constraints and the transformation of its industrial model.
For southern Europe, the Mediterranean, North Africa, migration, maritime security and the Middle East remain important.
Therefore there is no single European threat perception.
There is a common denominator—Russia—but not a completely common strategic worldview.
This is why NATO is currently much more coherent than EU defence policy.
8. NATO, paradoxically, is becoming more important—not less
This is where I would challenge the strongest version of the “European strategic autonomy” narrative.
The 2026 trajectory points toward:
stronger Europe + stronger NATO
rather than:
stronger Europe − United States.
At the July 2026 Ankara summit, NATO explicitly described the objective as “a stronger Europe in a stronger NATO.” European Allies and Canada had increased core defence investment by more than $139 billion in 2025, and NATO announced more than $50 billion in new procurements.
Even more revealingly, NATO is now building mechanisms to aggregate industrial demand and connect European, Canadian and American production capacity.
The July 2026 NATO “Engine” initiative is explicitly designed to connect available factory capacity across the transatlantic defence-industrial base.
So the system is evolving toward:
European rearmament inside a transatlantic industrial architecture.
That is considerably different from Macron-style strategic autonomy.
9. The deeper transformation: Europe is moving from a “peace dividend” economy toward a security economy
This is perhaps the biggest long-term consequence.
For roughly three decades, Europe benefited from an assumption:
large-scale continental war was unlikely enough that defence could be optimized downward.
That assumption produced enormous economic efficiencies.
Now governments are paying to reverse them.
This means defence expenditure is becoming connected to:
- industrial policy;
- energy security;
- infrastructure;
- semiconductors;
- cyber-security;
- space;
- AI;
- robotics;
- critical minerals;
- transport infrastructure;
- stockpiles;
- domestic manufacturing.
In other words:
defence policy is becoming industrial policy.
And industrial policy is becoming security policy.
That is much more important than the headline percentage.
10. But here comes the fiscal problem
There is no free European rearmament.
The EU estimates defence spending at €418 billion in 2025 and €454 billion in 2026. Defence investment alone is projected at almost €163 billion in 2026.
The question becomes:
Who pays?
There are only a few possibilities:
- higher taxes;
- lower civilian expenditure;
- higher borrowing;
- faster economic growth;
- some combination.
The IMF’s 2026 analysis is particularly useful here. It finds that defence expenditure can stimulate economic activity, particularly through equipment procurement, but the effect is weaker where import intensity is high and fiscal space is limited.
And the IMF’s June 2026 assessment is blunt: permanently higher defence expenditure cannot simply be deficit-financed indefinitely in heavily indebted European states; governments will eventually face taxation and/or expenditure trade-offs.
This creates a potentially uncomfortable European trade-off:
defence vs welfare
defence vs infrastructure
defence vs climate investment
defence vs debt stabilization
The political battle over European defence will increasingly be fought here rather than over whether Russia is dangerous.
Everyone can agree on the threat.
The disagreement will be over who sacrifices what to pay for the response.
11. There is also an inflationary and capacity constraint
Europe cannot simply announce €800 billion and immediately receive €800 billion worth of military capability.
Factories need to be built.
Workers need to be trained.
Supply chains need to expand.
Orders have to become contracts.
Contracts have to become production.
Production has to become deliveries.
And deliveries have to become trained, maintained and interoperable military capability.
That takes years.
NATO itself now explicitly recognizes the industrial bottleneck and is working on production expansion, ammunition capacity and industrial workforce constraints.
Therefore:
money is no longer the only scarce resource.
Industrial capacity is becoming scarce.
12. The Ukraine war has effectively become Europe’s defence-industrial laboratory
This is uncomfortable but analytically important.
Ukraine has demonstrated the changing economics of warfare:
- drones can be produced at scale;
- electronic warfare matters enormously;
- cheap systems can destroy expensive platforms;
- artillery consumption can become enormous;
- air defence is strategically scarce;
- precision missiles remain expensive;
- software and battlefield adaptation can move faster than traditional procurement;
- industrial replenishment capacity can become as important as the quality of individual weapons.
Europe is consequently not simply buying yesterday’s weapons.
It is being forced to rethink what a modern European military actually looks like.
The EU’s current support architecture increasingly emphasizes Ukrainian defence-industrial production itself. For 2026, the EU has allocated up to €28.3 billion specifically for Ukraine’s defence industrial capacity, within a broader €45 billion support package.
That is strategically interesting.
Ukraine is gradually becoming not only a recipient of European weapons, but part of the European defence-production ecosystem.
13. The biggest danger is fragmentation
Europe could spend enormous sums and still fail to obtain proportional military power.
Why?
Because 27 states can buy 27 different solutions.
The European Defence Agency says more than 80% of EU procurement remains national.
Imagine 20 countries simultaneously ordering:
- different air-defence systems;
- different artillery;
- different drones;
- different missiles;
- different communications systems;
- different logistics platforms.
You get expenditure without equivalent scale.
The strategic objective therefore should not simply be:
“Spend more.”
It should be:
“Spend more collectively, faster, and on interoperable systems.”
That is the difference between a European arms boom and a European military transformation.
14. The defence-industrial beneficiaries are obvious—but the consequences are broader
There is also an economic redistribution taking place.
European defence companies stand to receive long-term order books that were almost unimaginable ten years ago.
This creates incentives for:
- consolidation;
- factory expansion;
- private investment;
- cross-border mergers;
- national champions;
- joint ventures;
- government equity/support;
- long-term procurement contracts.
But there is a political danger in assuming that every euro of defence expenditure automatically translates into European industrial capacity.
If the marginal euro buys American aircraft, Israeli systems, Korean artillery or other imported equipment, Europe’s military capability rises, but its industrial autonomy does not rise proportionately.
SIPRI’s arms-transfer figures demonstrate exactly this tension.
15. The most revealing number may therefore not be $864 billion
I would watch four numbers instead.
$559 billion
European NATO military expenditure in 2025.
This tells us the scale of the European NATO response.
€454 billion
EU defence expenditure expected in 2026.
This shows that the acceleration continues beyond the SIPRI 2025 dataset.
€163 billion
Projected EU defence investment in 2026.
This is more important than total spending because investment determines future capability.
58%
The proportion of European NATO arms imports supplied by the United States during 2021–25.
This tells us how far Europe remains from genuine defence-industrial autonomy.
Together these four numbers tell a much more sophisticated story than “Europe is rearming.”
16. My strategic reading of the 2026 situation
I would divide Europe’s transformation into three layers:
| Layer | Direction | Assessment |
|---|---|---|
| Military spending | ↑↑ | Genuine structural reversal |
| Defence industry | ↑ | Significant but still fragmented |
| Strategic autonomy | ↑/→ | Improving, but still constrained by US dependence |
| NATO dependence | → | Still fundamental |
| EU institutional role | ↑ | Growing rapidly |
| Fiscal pressure | ↑↑ | Major long-term constraint |
| Eastern-Western divergence | → | Still substantial |
| European military integration | ↑ | But much slower than spending growth |
The key asymmetry is:
European military expenditure is increasing faster than European strategic integration.
That is the central weakness.
17. And there is one deeper geopolitical consequence
The European security order is being rebuilt.
But it is not being rebuilt around the EU alone.
It is being rebuilt around a triangular architecture:
EU → money, regulation, industrial policy
European states → armies, procurement, taxation
NATO/US → strategic architecture, nuclear deterrence, high-end capabilities, interoperability
That arrangement is actually more realistic than the old debate between “European autonomy” and “American dependence.”
Europe is likely to become far more militarily capable without becoming strategically independent of the United States.
Those are different things.
EU-100 conclusion
The 2025 SIPRI numbers mark a structural break, not merely a reaction to one year’s events.
Europe is abandoning the post-Cold-War assumption that major military capacity can be outsourced cheaply. The Ukraine war accelerated the process, uncertainty about the US accelerated it further, and NATO’s 5%-by-2035 framework has now institutionalized it.
But the emerging reality is not “Europe is becoming independent.”
It is:
Europe is becoming harder, more militarized, more industrially security-conscious and more willing to spend—but it is doing so largely inside the transatlantic system.
The real strategic test over the next several years is therefore not whether Europe reaches 3%, 4% or 5% of GDP.
It is whether that money produces:
mass + ammunition + air defence + logistics + industrial capacity + interoperability + technological sovereignty.
If it does, Europe will have undergone a genuine strategic transformation.
If it merely produces a larger collection of nationally purchased weapons—many of them imported—Europe will have achieved rearmament without full strategic power.
And that distinction is where the next phase of European geopolitics will be decided.
No illusions: Europe is rearming. But it has not yet demonstrated that it can turn money into autonomous military power.
EU-100, Chief of Europe
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