Source: European Parliament
Recent geopolitical developments have prompted many Member States to increase defence expenditure, consistent with long-standing EU recommendations, including the Joint White Paper for European Defence Readiness 2030[1].
According to available data[2], Member States defence expenditure in 2024 rose for the tenth consecutive year, reaching EUR 343 billion — 19% more than in 2023 — and equalling 1.9% of gross domestic product (GDP). Preliminary estimates suggest that in 2025, spending could reach EUR 392 billion or 2.1% of GDP.
This upward trend is expected to continue. This trajectory aligns with North Atlantic Treaty Organisation’s (NATO) defence investment pledge — 23 Member States are also NATO’s Allies — to allocate 3.5% of GDP annually to core defence requirements and 1.5% to broader security needs by 2035[3].
Security and defence remain national competences and the EU plays a complementary role by supporting national efforts and mobilising EU-level resources.
Measures proposed include leveraging EUR 650 billion through the Stability and Growth Pact’s national escape clause, launching a EUR 150 billion loan instrument[4] for joint procurement, redirecting cohesion funds, and expanding the role of the European Investment Bank.
To ensure long-term financial stability and predictability in investments in defence and space, the Commission has proposed the establishment of a European Competitiveness Fund within the next Multiannual Financial Framework.
This fund will include a dedicated defence and space window with a budget of EUR 131 billion, providing a stable investment horizon through to 2034.
These initiatives can improve spending efficiency, foster interoperability of armed forces, and reduce defence market fragmentation across the EU.
- [1] https://commission.europa.eu/document/download/e6d5db69-e0ab-4bec-9dc0-3867b4373019_en?filename=White%20paper%20for%20European%20defence%20%E2%80%93%20Readiness%202030.pdf.
- [2] https://eda.europa.eu/docs/default-source/brochures/2025-eda_defencedata_web.pdf.
- [3] https://www.nato.int/cps/en/natohq/topics_49198.htm.
- [4] https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=OJ:L_202501106.