EU Nations Approaching NATO's 3.5% GDP Defense Spending Milestone

EU Defence Spending Reaches Record High, But Challenges Remain

The European Defence Agency (EDA) has reported a new record of €343 billion in defence spending among EU countries in 2024, marking a significant 19% increase from the previous year. This surge in defence spending comes as the EDA predicts an additional €254 billion will be required to raise spending from 2% to 3.5% of GDP by 2035, bringing total defence expenditure to approximately €635 billion.

Germany, France, and Italy are the biggest spenders, with Germany investing around €90 billion (2.1% GDP), France nearly €60 billion (2%), and Italy around €33 billion (1.5%). Estonia, Latvia, and Lithuania follow closely, each spending 3.3%, 3.1%, and 3.38% of their respective GDPs on defence, respectively.

However, despite EU countries collectively having more battle tanks, artillery systems, and infantry fighting vehicles, their capabilities are fragmented across different operating systems, making them less effective than they could be. The EDA stresses the importance of member states cooperating to spend more efficiently and to ensure their forces work better together by using interoperable systems and equipment.

The yearly cost for each EU citizen is now estimated at €764. The EU Commission's Readiness 2030 initiative aims to create additional fiscal space of up to €800 billion over the next four years to further boost defence spending.

In comparison, Washington invested €845 billion in defence (3.1% of GDP) in 2024, almost three times the EU total of €343 billion. Russia spends €107 billion and China spends €250 billion in defence, but the EDA warns they may achieve greater cost-effectiveness due to factors like lower domestic prices, integrated planning, less fragmentation, and lower structural overheads.

The EDA also emphasizes the need for more personnel recruitment to address "shortages" and ensure enough trained soldiers to operate advanced equipment. Defence Research and Development (R&D) spending rose by 20% to €13 billion in 2024.

Looking ahead, by 2032, no EU NATO members currently reach the 3.5% GDP defense spending target. As of 2025, only Poland (4.48%), Lithuania (4%), and Estonia (3.38%) come close or exceed this goal, while most EU states are between 2% and 2.8%, far from 3.5%. Poland has sharply increased its defence investment to nearly 3.8% of GDP, more than any other EU nation.

Despite these challenges, the EU continues to invest heavily in its defence capabilities, aiming to enhance its security and global standing in the face of evolving geopolitical threats.