The Russian invasion of Ukraine has marked the end of a long period during which Western countries enjoyed the benefits of the 'peace dividend' and has triggered a major process of European rearmament. The need to increase defence spending and modernise armed forces had been recognised and discussed by European policymakers and within NATO for many years. However, progress was hindered at the national government level, in part because the need for additional defence spending was not obvious to voters.
Although European defence spending had been on the rise throughout the 2010s (due to the increasing Kremlin aggression towards the West and the first attack on Ukraine in 2014), the full-scale war in Ukraine, which revealed Europe's unpreparedness for such a prolonged conflict, marked a significant turning point in terms of modernisation and rearmament. This shift has also changed the perception of European voters, further empowering politicians on this issue.
Moreover, there is another factor reshaping Europe's defence policy – the 'Trump factor' with its anti-European rhetoric. Today, Europe is being forced, at least hypothetically, to think about scenarios for ensuring its security when there is either no understanding or minimal cooperation with the US administration on foreign policy issues. In Trump's rhetoric, this translates to the following: the US will participate in addressing Europe's security concerns only if Europeans increase their own spending for these purposes.
One way or another, official data from EU countries indicates a significant increase in defence spending, writes Jean-Pierre Maulni, Deputy Director of the French Institute of International and Strategic Relations (IRIS), in a special report. European budgets for 2023 envision a 33% increase in spending on arms procurement and investments in their production compared to last year. The combined value of current arms contracts in the EU is approaching 100 billion euros.
Of the 27 European countries studied by IRIS researchers (including the UK and Norway, but excluding Ireland and Malta), 25 have increased their defence budgets in nominal terms in 2023, with 18 exceeding the rate of inflation, indicating real growth in defence budgets. Austria, the Baltic states, Finland, the Netherlands, Slovakia, Slovenia, Sweden, and Poland have seen particularly sharp increases in their defence budgets. Together, these countries will spend 46% more on defence in 2023 than they did in 2022. The authors from IRIS attribute this dramatic growth to a 'very strong fear of Russian aggression.'
Experts estimate that 70-75% of current purchases are directly related to the Russian invasion of Ukraine. While the growth in defence spending may not be as intense in 2024, experts believe that Europe will continue to invest in defence more steadily than it did before the start of the war.
However, the major players will undoubtedly play a crucial role in the modernisation and strengthening of European defence (though the contribution of smaller states should not be underestimated). Germany has allocated an additional 8.3 billion euros for defence, which is only a small portion of the new 100 billion euro special fund established by the German government to respond to the war. The United Kingdom is also not lagging behind on this matter. Recent strategic documents from the UK’s Ministry of Defence emphasise the need to increase weapons stockpiles and expand the defence industry's capacity. In 2023, the Ministry of Defence received an additional 1.9 billion pounds to replenish its weapon stocks, to replace the supplies provided to Ukraine, as well as to invest in ammunition production.
Paul O'Neil, a researcher at the Royal United Services Institute (RUSI), notes that European states and the UK were unprepared for the start of another war: many defence industries had been prematurely shut down, and weapons reserves proved partially incompatible with Ukraine's needs. Additionally, arms production in the EU has been severely restricted due to a shortage of essential raw materials — the already small number of metallurgical industries within the EU began to experience an acute shortage of coal necessary for the production of hardened steel, which used to be supplied from the Donbas region. As a result, 78% of current weapons procurement contracts are awarded to suppliers outside the EU, with 63% of all purchases outside the EU coming from the United States. In addition to ammunition, American manufacturers also supply equipment, air defence systems, and combat aviation technology to Europe. Within the EU, Germany is the most active supplier, responsible for approximately 50% of all contracts. However, this is not a swift process: for example, the United States, which ordered additional production of Stinger missiles for Ukraine as early as May 2022, will only receive their first deliveries in 2026.
According to IRIS calculations, European countries have invested an additional 21.5 billion euros in the development of their defence capabilities over the past year than they did the year previously, with Germany accounting for a third of this amount, and Poland receiving 17.5%. By comparison, in 2022, EU countries' investments in the defence industry only increased by 8.4 billion euros. In June 2023, the European Parliament adopted the European Defence Industry Reinforcement through Common Procurement Act (EDIRPA), under which the EU may additionally purchase weapons worth up to 1.5 billion euros between 2023 and 2025.
The countries of NATO set a goal to increase defence spending to 2% of their respective national GDPs. While this target may still seem challenging to achieve today, it is important to remember that the combined GDP of EU countries and the United Kingdom is ten times larger than that of Russia. Therefore, even defence expenditures at an average of 1.5% of GDP would equate to potential defence spending totaling 15% of Russia's GDP. Further, if we take into account the combined defence spending of the United States and NATO countries, it reaches $1.1 trillion, which corresponds to 60% of Russia's GDP.
Thus, Putin's invasion of Ukraine, contrary to Kremlin fantasies, is not leading to a strengthening but rather to a critical weakening of Russia's security. Due to economic constraints, Russia is unable to respond to the arms race it began. This situation underscores the profound challenges that Russia faces in maintaining its military capabilities in the face of growing international pressure.