Despite a $574bn spending surge, Europe’s rearmament remains uneven and costly, analysis finds
- NATO says European allies and Canada spent more than $574 billion on defence in 2025, but Europe’s rearmament is still splitting into fast and slow lanes. - The sharpest build-up is on NATO’s eastern flank — Poland and the Baltics especially — while Italy, Spain and others still lag. - The real bottleneck is fragmentation: without pooled buying, Europe risks paying more, importing more, and still fielding too little.
Europe is spending real money on defence now. NATO says European allies and Canada put more than $574 billion into defence in 2025, up 20% from 2024 and up from 1.4% of combined GDP in 2014 to 2.3% in 2025. But the big number hides the awkward part — Europe is not really rearming as one bloc. It is rearming in clusters, at different speeds, with different suppliers, and often with different ideas of the threat. (nato.int) ### Where is the money actually going? A lot of the momentum is coming from countries closest to Russia. A Brussels Institute for Geopolitics map of 2021-24 spending changes shows the biggest increases on the eastern flank, especially the Baltic states and Poland. Poland already has the highest defence burden in the EU and NA(nato.int)w even recorded declines over that period, including Croatia, Cyprus, Greece and Portugal. (big-europe.eu) ### Why does that make Europe look uneven? Because the politics are uneven and the fiscal room is uneven. Bruegel’s December 2025 work makes the point pretty bluntly: the countries geographically closest to Russia, and with fiscal space when the war escalated in 2022, ended up carrying most of the military aid to Ukraine and much of(big-europe.eu)illing,” not by a fully pooled EU system. (bruegel.org) ### Why isn’t more spending enough? Because buying separately is expensive. Europe’s defence market is still fragmented by national preference, small order sizes, and duplicated industrial structures. Bruegel argues that if procurement stays national, extra demand mostly pushes up prices instead of delivering enough extra capa(bruegel.org)costs by about half in some areas. (bruegel.org) ### Is Europe still buying from outside Europe? Yes — heavily. SIPRI says arms imports by European states jumped 210% between 2016-20 and 2021-25, and Europe took 33% of global arms imports in that latest five-year period. The US has been the biggest beneficiary. For the first time in two decades, Europe took the largest regional share of US (bruegel.org)to non-European suppliers. (sipri.org) ### What is Brussels trying to do about it? The EU has moved from small industrial nudges to something much bigger. The Commission’s ReArm Europe plan, unveiled in March 2025, aims to mobilise more than €800 billion through looser fiscal rules, a €150 billion SAFE loan instrument for joint procurement, redirected funds, and more backing from the European(sipri.org) ahead of the machinery — the plan still needs practical follow-through on joint buying and industrial integration. (europarl.europa.eu) ### So what’s the catch now? The catch is that Europe may be entering a two-speed defence era. Front-line states are moving fast because they think time is short. Larger southern economies are moving slower because debt, domestic politics, and distance from Russia make the threat feel less immediate. That gap matters ins(europarl.europa.eu)ing?” to “what are you actually building?” (theparliamentmagazine.eu) ### Why are ad-hoc groups still so important? Because they are what works when unanimity does not. Bruegel’s argument is basically that Europe has added money without adding much new common governance. So smaller coalitions, including non-EU formats that can move faster, keep becoming the practical way to coordinate procurement, support Ukraine, and close capability gaps. (bruegel.org) ### Bottom line Europe’s rearmament is real, but it is still messy. The continent has found the cash faster than it has built the institutions, factories, and shared purchasing habits needed to turn that cash into coherent military power. (nato.int)
