European defence budgets have risen sharply since Russia’s full-scale invasion of Ukraine in February 2022.

The latest consolidated EU figures show total defence expenditure by the 27 member states reached €343 billion in 2024, equivalent to 1.9 per cent of GDP. EU institutional summaries and the European Parliament’s research service describe 2025 spending as an estimate of €381 billion in 2024 prices (about €392 billion at current prices), or 2.1 per cent of GDP. The distinction matters in January 2026: the 2025 total is not yet presented as a final outturn in the EU-wide series.

The increase is being driven by equipment and infrastructure. EU figures put defence investment at €106 billion in 2024, rising 42 per cent year on year, with the 2025 investment figure estimated at around €130 billion. Procurement is the largest component of that investment. EU reporting and market coverage citing European Defence Agency data indicate that defence equipment procurement in 2024 was €88 billion, with 2025 expected to exceed €100 billion.

For many capitals, the budget uplift is tied to alliance benchmarks. At NATO’s summit in The Hague in June 2025, allies agreed a new defence investment commitment of 5 per cent of GDP by 2035, split between 3.5 per cent for core defence and up to 1.5 per cent for wider security-related spending. The European Parliament’s research service notes that this new benchmark is now part of the planning context for EU member states that are also NATO allies.

National rearmament plans

Several countries are moving beyond incremental increases. Estonia approved a defence development plan allocating more than €10 billion for 2026–2029, with priorities including air defence, deep-strike capabilities and ammunition stocks. The Estonian Ministry of Defence set out the plan in July 2025, and Estonia’s public broadcaster reported the same headline total and capability focus.

Poland remains the highest spender in NATO by share of GDP, according to reporting based on NATO estimates and Polish government plans. Poland aimed to reach 4.7 per cent of GDP in 2025, and in July 2025 that Warsaw reiterated 4.7 per cent for 2025 with a stated intention to move towards 5 per cent in 2026.

In Germany, the €100 billion “special fund” created after the 2022 invasion remains a central procurement vehicle. Defence spending above 1 per cent of GDP has been enabled to bypass constitutional debt constraints under measures approved by parliament.

In France, President Emmanuel Macron confirmed in December 2025 that France will proceed with a next-generation aircraft carrier programme intended to replace the Charles de Gaulle, with an operational target date of 2038 and a reported cost of about €10.25 billion. The announcement was framed as part of France’s wider defence planning and industrial workload.

In Italy, the government asked parliament to approve a €2.4 billion investment over 15 years for the maintenance and modernisation of its frigate fleet, underlining how naval sustainment is being built into medium-term budget lines.

Smaller states are also pooling purchases. Estonia and Latvia have pursued joint procurement of the IRIS-T SLM medium-range air defence system since 2023, according to official statements and regional reporting, as part of efforts to build layered air defence on NATO’s eastern flank.

Readiness 2030: finance and industrial policy

EU-level initiatives are intended to steer the spending rise into joint procurement and industrial scale-up. In May 2025, the Council adopted SAFE (Security Action for Europe), a €150 billion instrument designed to support common procurement and defence industrial production. The Commission confirmed in January 2026 that it had approved an initial batch of SAFE plans for eight member states and sent a proposal to the Council.

In December 2025, the Council gave final approval to the European Defence Industry Programme (EDIP), providing €1.5 billion in grants for 2025–2027, including €300 million earmarked for a dedicated Ukraine support instrument aimed at modernising Ukraine’s defence industry and linking it to the wider European industrial base.

Constraints on delivery

The spending rise is meeting practical limits. Reuters reporting in January 2026 described production pressures and a need to expand capacity across Europe’s defence sector as demand for equipment rises. The challenge for governments is that higher appropriations do not automatically translate into faster deliveries, particularly where multiple countries compete for the same munitions, air defence systems and platforms.

As of mid-January 2026, the direction of travel is clear in the EU numbers: higher totals, a larger share directed to equipment, and EU instruments designed to reduce duplication through common procurement. What remains unresolved is how quickly industry can convert budgets into fielded capability, and whether political consensus will sustain multi-year spending at the levels implied by the 2025 estimates.