Key facts
- European defence spending is at its highest since the Cold War.
- Poland spent 4.48% of its GDP on defence in 2025, the highest in NATO.
- The US spent 3.22% of GDP on defence.
- All EU NATO members met the 2% of GDP defence spending target in 2025.
- Front-line states like Poland, Lithuania, Latvia, and Estonia are spending significantly more than 3% of GDP.
- Approximately 40% of EU defence equipment spending goes to suppliers outside the bloc.
European defence spending has surged to its highest level since the Cold War, driven by proximity to Russia and a collective push to meet NATO targets. In 2025, European NATO members collectively increased their defence outlays by 14% to approximately €739 billion, with EU members spending 2.5% of their GDP on defence. This marks the steepest rise since the 1950s.
However, the figures reveal a significant divide across the continent. Poland leads the charge, allocating 4.48% of its GDP to defence, surpassing even the United States' 3.22%. Other front-line states, including Lithuania (4%), Latvia (3.73%), and Estonia (3.38%), also demonstrate substantial commitment. Nordic countries like Denmark (3.22%), Finland (2.77%), and Sweden (2.51%), along with Greece (2.85%), form the next tier of high spenders.
In contrast, a large group of member states, including Italy, France, Spain, Belgium, Portugal, Czechia, Luxembourg, Slovenia, Croatia, Slovakia, Bulgaria, and Hungary, are spending close to the 2% of GDP minimum target. Some, like Hungary and the Czech Republic, even saw their defence spending as a share of GDP decrease last year. Oxford Economics forecasts a near standstill in overall EU spending growth for 2026.
Economists note that while spending is up, the actual increase in military capability is less pronounced. Advance payments for multi-year orders and the inclusion of vaguely defined "defence-related" infrastructure can inflate reported figures. A significant portion, estimated at 40%, of the EU's defence equipment spending is sourced from outside the bloc, highlighting gaps in European manufacturing capabilities for advanced systems like long-range strike weapons, stealth fighters, and large drones.
A new, more ambitious target has been set, aiming for 5% of GDP by 2035, with a specific focus on 3.5% for core defence capabilities. However, outside of a few leading nations, most of Europe falls significantly short of this core target, indicating a substantial future investment requirement.