Europe's defence math needs a lot of work

Europe is undergoing its fastest defence build-up since the Cold War. European NATO members spent around €520 billion on defence in 2025, and are on track to spend a combined €800 billion a year on defence by 2030. Yet that's still not enough – at least in the way the money is used now. These numbers may seem preposterously large, but two things are pressuring Europe in this direction. The first is US withdrawal from Europe’s defence, paired with the Trump administration's potential threat to Europe over Greenland. Donald Trump is preparing the US for a defence budget of more than 1.5 trillion dollars and a “golden fleet”. This budget is grand, overly ambitious, and much if it goes to protecting Europe. Covering the gap created by the US' withdrawal would cost about €920 billion over the next 25 years, according to the International Institute for Strategic Studies. But analysts aren't decided: a separate study by Bruegel puts the near-term figure at an extra €250 billion a year and some 300,000 more troops to deter Russia. That would only partially address the second pressure: Russia. In cash terms, Russia’s defence capabilities are currently estimated at €138 billion, a fraction of European NATO members' total. But don't be too quick to shrug Russia off. Adjust the figure for purchasing power parity (what the same amount of money actually buys in each country), and the gap is much narrower. Each Russian ruble goes further due to its wartime economy, with centralised planning and cheap (partially forced) labour. Its defence budget has the real strength equivalent to roughly €425 billion. Even then, European NATO members still spend more than Russia. So why all the fuss? Spending the money right, to outspend Russia while also filling the gap left by the potential loss of US support, matters more than just spending. A primary concern is fragmentation across dozens of European countries and systems, which duplicates supply chains and adds unnecessary costs and competition. Europe could end up spending €800 billion and still have only a fraction of the capabilities a single country could achieve with the same amount. A recent Kiel institute paper puts the price of European defence autonomy at around €500 billion total increase over the next decade – if these billions are spent the right way. Closing the strategic autonomy gap would also make up a substantial amount of the money that is currently wasted in European defence budgets. Germany's €100 billion defence fund adopted in 2022, for example, went into old systems over new technology at a ratio of 99 to one, and mostly to non-European suppliers. Martin Sklenár, the former Slovak defence minister, argues Europe needs to be measuring outputs, not inputs. Simply spending money “doesn't guarantee that this increased input will actually translate into higher capacity.” Instead, we should focus on “whether we actually have more of those workers, or whether there are truly more units capable of fighting on the eastern flank, or whether those bridges are actually being built,” he told The European Correspondent. Europe's spending has doubled since 2019, yet equipment stocks remain below 2021 levels, and fragmentation in types of defence equipment has risen by nearly 10% since 2014. Europe needs to spend more on defence, but more so, it will need to make sure it stops throwing its money away.