Do n, Flo ian
A icle
De ence spending o Eu ope's secu i y: How much is
enough?
In e economics
Sugges ed Ci a ion: Do n, Flo ian (2024) : De ence spending o Eu ope's secu i y: How much is
enough?, In e economics, ISSN 1613-964X, Sciendo, Wa saw, Vol. 59, Iss. 4, pp. 204-209,
h ps://doi.o g/10.2478/ie-2024-0042
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In e economics 2024 | 4
204
Fo um
Eu opean s a es ha e enjoyed h ee decades o peace
and ela i e ex e nal secu i y and ha e cu hei ex-
pendi u e on de ence o many yea s. Russia’s a ack on
Uk aine, howe e , has inc eased he geopoli ical isks
and called Eu ope o a eassessmen o i s own secu i y
and de ence capabili ies. Ne e heless, Eu opean NATO
membe s s ill ely on secu i y gua an ees om he Uni -
ed S a es and ha e so a been unwilling and unable o
p o ide Uk aine wi h su icien mili a y suppo o e en o
achie e capabili ies o de end Eu ope on hei own. The
hesi an p io i isa ion o de ence spending o Eu opean
go e nmen s seems e en mo e naï e conside ing he
cu en deba e abou conce ns o changing ela ionships
wi h he US (see Fues , 2024). The leading supe powe
may be mo e p o ec ionis and less suppo i e unde he
possible leade ship o Donald T ump and his p ospec i e
Vice P esiden J. D. Vance, bo h emphasising ha se -
e al NATO membe s a e ee ide s a he cos o US ci i-
zens and ha Eu ope mus be (mo e) esponsible o i s
own secu i y. Rega dless o a second T ump p esidency,
he US – ac oss pa y lines – expec s Eu ope o spend
mo e on i s own secu i y. The US con ibu es mo e han
wo- hi ds o he o e all de ence spending wi hin NATO,
whe eas de ence capabili ies o he Eu opean membe s
would quickly be deple ed wi hou US suppo . The ac
ha Eu ope’s secu i y depends o an ex en on he ou -
come o he US p esiden ial elec ion demons a es he
deg ee o which Eu opeans ha e neglec ed hei own
secu i y in e es s – and his despi e mo e han wo yea s
o Russia’s wa in Uk aine and agg essi e h ea s o he
nuclea powe agains Eu ope. Eu ope mus u gen ly ad-
d ess he ques ion o how o educe i s eliance on he
US. Ul ima ely, i will only mo e o wa d by de eloping
mo e au onomy and a c edible p og amme o s onge
Eu opean de ence capabili ies. Bu wha would i ake o
make Eu ope mo e sel -su icien ? How much should Eu-
ope spend on de ence o su icien de e ence and ex-
e nal secu i y? And how can hese a ge s be achie ed?
Flo ian Do n
De ence Spending o Eu ope’s Secu i y – How Much Is Enough?
© The Au ho (s) 2024. Open Access: This a icle is dis ibu ed unde he
e ms o he C ea i e Commons A ibu ion 4.0 In e na ional License
(h ps://c ea i ecommons.o g/licenses/by/4.0/).
Open Access unding p o ided by ZBW – Leibniz In o ma ion Cen e
o Economics.
In e economics, 2024, 59(4), 204-209
JEL: D74, H41, H61, N56
DOI: 10.2478/ie-2024-0042
Flo ian Do n, i o Ins i u e, Munich, Ge many.
Is mee ing he NATO a ge s enough?
A benchma k in he deba e on de ence e o s is he so-
called NATO 2% a ge , acco ding o which a minimum o
2% o GDP was o be spen on de ence. NATO membe s
i s ag eed on he 2% a ge in 2006 and o mally enewed
i in 20141 o ensu e a ai con ibu ion o main aining he
alliance’s mili a y eadiness. Ten yea s la e , Eu opean
NATO membe s a e expec ed o exceed he 2% a ge o
hei combined GDP o he i s ime, whe eas he la ges
inc eases in de ence expendi u es occu ed on NATO’s
Eas e n lank a e Russia’s in asion o Uk aine (Do n e al.,
2023; NATO, 2024). Howe e , he e a e se e al easons o
belie e ha mee ing 2% o GDP o de ence migh no be
enough o achie e su icien de ence capabili ies in Eu ope.
Eu ope’s de ence spending was well abo e 3% du ing
he Cold Wa e a
The o icial commi men o he 2% a ge was aken in e-
sponse o Russia’s illegal annexa ion o C imea a decade
ago, bu Eu ope has now been con on ed wi h di ec ag-
g ession om Russia and a eal wa on i s doo s ep o
wo yea s, h ea ening i s secu i y.2 When Wes e n Eu-
ope las aced an ex e nal h ea om he So ie Union
and he Eas e n bloc du ing he Cold Wa e a, mos o
he NATO coun ies we e used o spending much mo e
han 2% o hei GDP on de ence (Figu e 1).3 Ge many,
F ance and he Ne he lands, o example, spen a ound
3% o GDP in he 1970s/1980s, while de ence spending
was a ound 5% in he UK and 6% o GDP in he US. In he
decade be o e, which included high geopoli ical isks like
he Cuba missile c isis and he cons uc ion o he inne
Ge man wall, he sha e o de ence expendi u e was e en
highe . Howe e , he US geopoli ical in e es s we e mo e
concen a ed on de ending Eu ope du ing he Cold Wa
e a, whe eas hey ha e been shi ing owa ds he Indo-
Paci ic o some ime now. This means a call on Eu opean
coun ies o do mo e, no less, compa ed o he Cold Wa
yea s, in o de o quickly build up su icien de ence ca-
pabili ies.
1 NATO i s ag eed on he 2% a ge in 2006, and i was enewed o -
icial NATO Summi Decla a ions in 2014 and 2023.
2 Mo eo e , o achie ing he NATO a ge , mili a y aid o Uk aine and
ela ed na ional expendi u e by o he eso s a e also included by
many Eu opean go e nmen s. I is ques ionable whe he hese poli-
cies inc ease Eu ope’s own mili a y eadiness, and whe he he NATO
a ge s a e s ill su icien o a o d ex e nal de e ence and secu i y.
3 A he end o he Cold Wa , NATO de ence spending e en exceeded
4% o GDP (NATO, 2023a).
ZBW – Leibniz In o ma ion Cen e o Economics 205
Fo um
Figu e 1
De ence spending, 1960-2023
in % o GDP
Sou ce: SIPRI (2024), own calcula ions.
Figu e 2
Annual a e age peace di idend and in es men
de ici s, 1990-2023
in billion eu os, p ice adjus ed (2023 p ices)
No e: Calcula ed as dis ance o NATO a ge s: 2% o GDP de ence
spending and 20% a ge o equipmen in es men s as sha e o de ence
spending.
Sou ce: Do n e al. (2024).
as a benchma k o su icien de ence spending o main-
ain mili a y capabili ies du ing peace ime. The na ional
go e nmen o Ge many, o example, had mo e han an
annual €20 billion highe budge o o he spending be-
ween 1990 and 2023. In Spain and I aly, he annual peace
di idend was mo e han €10 billion and €8 billion espec-
i ely.
Some may a gue ha lowe de ence spending seems jus-
i iable in peace ime and he absence o a isk o wa , be-
cause go e nmen s do no need o main ain a la ge a my
and a la ge s ock o weapons. The lack o in es men in
de ence capabili ies, howe e , a ec s he a ailabili y and
mode nisa ion o ope a ional weapons, ammuni ion and
hea y mili a y equipmen such as comba ai c a , anks
and a ille y. I he ex e nal secu i y si ua ion changes,
such as a e Russia’s in asion o Uk aine, a sho age o
ope a ional equipmen is p oblema ic, as hese sho alls
canno simply be compensa ed a sho no ice.
In 2014, he NATO membe s also ag eed on a 20% ule,
supposing ha a leas one- i h o he a ge ed 2% o
GDP de ence expendi u es should be de o ed o de ence
in es men s, ensu ing ha he a mies a e equipped wi h
su icien ammuni ion and mode n, majo mili a y equip-
men .4 I his spending ule had been ollowed o he pas
h ee decades, Spain would ha e addi ionally in es ed
mo e han €80 billion in hei mili a y equipmen , I aly
4 This includes associa ed esea ch and de elopmen , pe cei ed as a
c ucial indica o o he scale and pace o mode nisa ion.
How much Eu opeans would ha e o spend on hei
own de ence capabili ies o ensu e su icien de e ence
depends abo e all on he scale o he h ea – including
he mili a y capabili ies o a po en ial agg esso . Figu e 1
shows ha Russia main ained i s de ence spending a an
a e age le el o a ound 3.5% a e he Cold Wa bu has
inc eased i o o e 4% since he annexa ion o C imea
in 2014, and has su passed he US e e since. A e he
in asion o Uk aine, howe e , Russia has con e ed la ge
pa s o i s economy owa ds a wa economy and aised
mili a y spending o a ound 6% in 2023 and 2024. Some
expe s epo ha i Russia con inues hese mili a y e -
o s, i s a my migh be able o es he Eu opean alli-
ance and A icle 5 o he NATO ea y wi hin a ew yea s
(see, o example, Mölling & Schü z, 2023; B onk, 2023).
I Eu opean go e nmen s wan o be p epa ed o such a
nigh ma e scena io, hey mus ac quickly and p io i ise
hei budge s and e o s acco dingly.
Eu ope mus compensa e o la ge de ici s in mili a y
in es men
A e he all o he Be lin Wall, he h ea o wa on Eu-
ope’s eas e n bo de ended and de ence spending ell
signi ican ly in all coun ies (Figu e 1). Many Eu opean
NATO membe s educed hei a mies and de ence in-
es men s, and consequen ly he numbe o soldie s,
ammuni ion s ocks and hea y equipmen (see Do n e
al., 2022a). Some coun ies, o example F ance, he UK
and Poland, con inued o spend a ound 2% o hei GDP
o de ence ac i i ies (Figu e 1). O he coun ies ha e e-
duced hei annual expendi u e o a e y low le el o 1.1%-
1.5% o GDP – including Ge many, I aly, Spain, Belgium
and he Ne he lands. As a esul , na ional go e nmen s
gene a ed an annual “peace di idend” o o he spending
ca ego ies, p ima ily o inance and expand hei wel a e
s a es (see Do n e al., 2024). Figu e 2 shows he a e age
annual peace di idend in 2023 p ices, using 2% o GDP
0
2
4
6
8
10
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
Russia
Poland
Uni ed S a es
F ance
Uni ed Kingdom
Ge many
Spain Ne he lands I aly
End o
cold wa
Russia's
in asion
0
5
10
15
20
25
G
e many
Spain
I aly
Ne he lands
Belgium
Czechia
Denma k
Hunga y
Po ugal
Peace di idend
Equipmen in es men de ici
In e economics 2024 | 4
206
Fo um
Figu e 3
Real de ence spending, 2023
in billion cons an eu os (2022)
No e: Adjus ed o mili a y pu chasing powe pa i ies, o e lec cos and
wages di e ences ac oss coun ies as o 2021. Eu opean NATO wi hou
Tu key, including Sweden and Finland.
Sou ces: SIPRI (2024), Robe s on (2021), ECB, own calcula ions.
cos s o mili a y equipmen in Russia a e signi ican ly
lowe han in Wes e n Eu opean coun ies o he US (see
Robe son, 2021). Tha is, Russia can a o d mo e soldie s
and mili a y equipmen wi h he same amoun o money
as i s Wes e n coun e pa s. When conside ing mili a y
pu chasing powe pa i ies (PPP) o coun ies in he ig-
u es, he gap be ween he Eu opean NATO coun ies and
Russia o China is almos non-exis en (Figu e 3). Single
Eu opean coun ies all comple ely behind Russia when
mili a y cos s a e conside ed. Russia has almos i e
imes he mili a y pu chasing powe o he F ench de-
ence spending and six imes ha o Ge many o he UK.
While de ence spending only e lec s he e o o p oduce
de ence capabili ies, he igu es illus a e how he Eu o-
peans emain dependen on he secu i y gua an ees o
hei US ally o ensu e su icien de e ence agains a po-
en ial Russian agg esso .
Secu i y is a ques ion o budge p io i ies
The wa in Uk aine has eminded Wes e n socie ies o
he ho o s o wa and ha Eu ope mus spend mo e on
de ence o ensu e i s own secu i y and de e ence. Bu
his would also equi e a e hinking o Eu opean budge -
a y policy. Figu e 4 shows he di e en p io i isa ion o de-
ence in he go e nmen budge s o selec ed coun ies
be ween 2003 and 2023. Sou h Ko ea and he US, bo h
p epa ed o he cons an isk o wa , a e used o spend-
ing mo e han 10% o hei budge s o main ain hei own
de ence capabili ies. Russia has also ea ma ked mo e
han 10% o i s na ional budge o mili a y spending o
he pas 20 yea s and has inc eased his sha e o almos
16% by 2023 o inance he ecen wa in Uk aine. In Eu-
ope, howe e , na ional go e nmen s show a ying will-
ingness o adjus hei budge s as esponse o he new
h ea a he Eas e n lank. Some ha e assigned de ence
a much highe p io i y in hei budge s. Poland, o exam-
ple, quickly shi ed i s budge p io i ies o inc ease he
coun y’s de ence capabili ies, om 4% in 2013 and 2003
o 8% in 2023. O he s, in pa icula Wes e n Eu opean
go e nmen s, made e y li le signi ican changes in hei
budge s and did no cu o he poli ical spending p io i ies
in a ou o s onge secu i y.
Secu i y is a undamen al esponsibili y o s a es, bu Eu-
opeans mus emembe his public good does no come
o ee. I Eu opeans a e conce ned abou hei own se-
cu i y and a lack o de ence capabili ies, he public de-
ba e mus add ess he cos s o pe manen highe de ence
spending and he ade-o s a ising om lea ing he e a
o he peace di idend behind. Howe e , he iscal space
o se e al Eu opean go e nmen s is limi ed due o high
le els o deb and social spending, and low economic
g ow h. Some poli icians a e calling o highe axes o he
almos €120 billion, and Ge many almos €230 billion in
2023 p ices (Figu e 2). I Eu opean NATO coun ies a e
willing o quickly inc ease hei de ence capabili ies, many
o hem would need o in es much mo e han 2% o GDP
o compensa e he la ge in es men de ici s o he las
decades.
Eu ope mus compensa e o highe eal mili a y cos s
In e na ional compa isons o de ence spending a e nec-
essa y o moni o ing secu i y isks, assessing own de-
ence capabili ies and planning de ence budge s. Al-
hough de ence spending as a sha e o GDP is a good in-
dica o o compa e he e o s and p io i ies o coun ies,
absolu e igu es depend on he size o he economies.
Figu e 3 shows absolu e de ence spending by coun y in
2023. The US is by a he coun y wi h he highes mili-
a y expendi u e in he wo ld. Eu opean NATO coun ies5
a e in second place, ahead o China and Russia. Eu ope
e en spends mo e han wice as much as Russia on de-
ence, al hough Russia has been ca ching up in ecen
yea s. Howe e , such compa isons a e misleading as hey
do no conside di e en inpu p ices o mili a y pe son-
nel and equipmen . Wages o soldie s and main enance
5 Including he new membe s Finland and Sweden; excluding he USA,
Canada and Tu key.
0 100 200 300 400 500 600 700 800
Ne he lands
Canada
Spain
Tu key
I aly
Poland
Ge many
U
ni ed Kingdom
F ance
India
Uk aine
Russia
China
E
u opean NATO
Uni ed S a es
Nominal
Adjus ed o mili a y PPP
ZBW – Leibniz In o ma ion Cen e o Economics 207
Fo um
ample, ied o make a pi o (Zei enwende) in 2022 and
inc eased hei de ence capabili ies by a deb - inanced
p og amme o an addi ional €100 billion (Sonde e mö-
gen Bundesweh ). In heo y, his sum could make up o
he de ici s in in es men in mili a y equipmen o e he
pas decade (see Do n e al., 2022b). Bu almos hal o
he €100 billion will no be used o new in es men s in
mili a y equipmen (Do n & Schleppe , 2023). Mo eo e ,
he in es men s a e s a ing slowly and will be used o e
he coming yea s wi hou any signi ican inc eases o
in la ion-adjus ed de ence spending in he go e nmen
budge . The special und he e o e only se es o close
he gap o NATO’s 2% a ge ins ead o making up o he
in es men de ici s o he pas decades. Con a ily, he e
a e almos no e o s by he Ge man go e nmen o mee
he 2% a ge wi hou deb . When he deb p og amme
comes o an end, he nex one will be called by some
poli icians o su e. This Ge man example shows ha a
u na ound in budge a y policy has ba ely a i ed in many
(Wes e n) Eu opean coun ies, despi e he inc eased geo-
poli ical isks.
In addi ion, due o he lack o a ailabili y o s a e-o - he-
a weapon sys ems in Eu ope, many Eu opean coun-
ies bough new weapon sys ems ou side o Eu ope (see
Maulny, 2023; Schleppe , 2024).6 While his makes sense
in he sho e m o he e icien use o esou ces and
as e a ailabili y o s a e-o - he-a sys ems in imes o
c isis, i inc eases geopoli ical dependencies in secu i y
issues and de ence echnologies. Mo eo e , such p o-
cu emen s a egies make i mo e di icul o main ain and
de elop he skills o he Eu opean de ence indus y. To
change he game, Eu opean de ence indus y would also
need a c edible budge plan o pe manen ly highe de-
6 Mo eo e , buying di e en sys ems om ab oad makes i e en mo e
p oblema ic o Eu opean a mies o communica e and coope a e.
educ ion o aboli ion o deb ules o a oid unpleasan
decisions associa ed wi h limi ing o he poli ical spending
p og ammes.
Tax inc eases a e also likely o be di icul . The ax bu den
in mos EU coun ies is al eady signi ican ly highe han in
o he OECD coun ies, so ha addi ional bu dens would
u he impai he compe i i eness o Eu opean econo-
mies. Financing highe de ence spending pe manen ly by
deb , howe e , is iscally no sus ainable and would shi
he iscal bu den o oday’s secu i y o u u e gene a ions.
Eu opean go e nmen s need a c edible plan o how o
pe manen ly inc ease de ence spending owa ds a highe
le el wi hou jeopa dising iscal s abili y and economic
compe i i eness (Do n e al., 2024). Clea ly, he e a e
ade-o s in budge a y policies, as many Eu opean coun-
ies mus in es o s eng hen he compe i i eness o hei
economies and o deca bonisa ion. The e o e, in mos
Eu opean coun ies a sus ainable s eng hening o he
de ence budge can only be achie ed h ough a c edible
and pe manen inc ease in he go e nmen budge o e
he nex yea s, which is bes done by limi ing he g ow h
o consump ion spending (as discussed in de ail in Do n
e al., 2024). The peace di idend has been used o expand
social spending o e he pas 30 yea s. Re e sing his will
ace conside able poli ical esis ance. The a oidance o
excessi e social spending cu s may be necessa y o p e-
se ing social peace and an ag eemen on mo e es ic i e
spending policies. Howe e , new iscal space mus be c e-
a ed and used o inc easing de ence spending.
Some coun ies ini ia e one-o deb p og ammes o im-
media ely inc ease de ence capabili ies and compen-
sa e o pas in es men de ici s. This would allow hem
o g adually inc ease de ence spending in he go e n-
men budge o e he coming yea s. Ge many, o ex-
Figu e 4
De ence as sha e o go e nmen spending, 2003-2023
in %
Sou ce: SIPRI (2024).
0
2
4
6
8
10
12
14
16
18
Ge many I aly Spain F ance Poland Uni ed Kingdom China Russia Uni ed S a es Sou h Ko ea
2003 2013 2023
In e economics 2024 | 4
208
Fo um
de ence companies gene a e on a e age jus 30% o he
sales o hei Ame ican compe i o s. While he Ame ican
ma ke is signi ican ly la ge , he agmen ed Eu opean
ma ke means ha economies o scale canno be le -
e aged, and de ence sys ems can only be p oduced in
smalle quan i ies a high uni p ices. Be e coope a ion
among Eu opean pa ne s in he de elopmen and pu -
chase o he nex gene a ion o mili a y equipmen and o
mode n and in eg a ed de ence sys ems, such as he Eu-
opean Sky Shield Ini ia i e, inc ease e iciency as well as
common de ence capabili ies as a Eu opean public good
(see Fues & Pisani-Fe y, 2019; S einbach & Wol , 2024).
Finally, Eu ope needs o eo ganise i s inno a ion policy in
he di ec ion o a Eu opean De ense Ad anced Resea ch
P ojec s Agency o s eng hen b eak h ough inno a ions
(see Die ich e al., 2024; Fues e al., 2024). Tha way,
R&D in de ence and dual-use inno a ions should ge eas-
ie access o esea ch unding o gain mo e echnological
au onomy in de ence in Eu ope.
Policy conclusions
Eu opean coun ies mus imp o e hei de ence capa-
bili ies. The accession o Finland and Sweden o NATO
was an impo an s ep, bu much mo e is needed. Se -
e al Eu opean NATO membe s ha e ecen ly mo ed o-
wa ds NATO’s 2% a ge , bu he e a e se e al easons o
ques ion whe he eaching he NATO a ge o de ence
spending is su icien o de e ence.
Fi s , Eu opeans spen well abo e 2% o GDP on de ence
each yea du ing he Cold Wa e a.8 Tha is, many Eu-
opean go e nmen s hemsel es p io i ised he main-
enance and expansion o de ence capabili ies in hei
budge s, e en hough he US exp essed a s onge com-
mi men o de ending i s allies in democ a ic Eu ope a
ha ime. Today, howe e , many US poli icians wan Eu-
ope o do mo e o i s own secu i y.
Second, i will no be enough o inc ease de ence spend-
ing o achie e be e mili a y eadiness, as in ended by
NATO’s 2% a ge . Many Eu opean coun ies ha e been
cu ing hei de ence budge s o many yea s and ha e
ha dly in es ed in ammuni ion depo s and mode n mili-
a y equipmen . In o de o compensa e o hese in es -
men de ici s, signi ican ly mo e han he 2% mus be
8 Today, he NATO s a es a he Eas e n bo de ha a e mos a isk
o being a acked by Russia ha e highe de ence spending han 2%
o GDP (SIPRI, 2024). The h ee Bal ic s a es a e aiming o 3% o
GDP, and Poland eached 3.8% o GDP in 2023. O he coun ies ha
a e acing cons an secu i y h ea s ha e also spen mo e han 2%
o GDP on a e age on de ence o e he pas en yea s, o example:
Sou h Ko ea (2.6%), Uni ed S a es (3.4%) and Is ael (5.2%).
ence spending and co esponding long- e m in es men
commi men s o Eu opean go e nmen s (see Ma sh e al.,
2024). This way, he Eu opean de ence indus y will ha e
mo e planning secu i y and incen i es o in es men s in
he expansion o hei Eu opean p oduc ion capaci ies, as
well as in he esea ch and de elopmen o new p oduc s
and mode n de ence sys ems. In addi ion, bu eauc acy
mus be educed in many Eu opean s a es o accele a e
p ocu emen and app o al p ocesses in imes o geopo-
li ical isks and h ea s o ex e nal secu i y.
Mo e e iciency h ough be e Eu opean coope a ion
De ence spending e lec s he inpu side and shows
whe he coun ies p o ide su icien esou ces o inc ease
de ence capabili ies. Howe e , spending igu es do no
show he ou pu , i.e. he e ec i eness o de ence capa-
bili ies (see Rasmussen, 2024). Mo eo e , aising de ence
budge s does no gua an ee ha unds a e spen in he
mos e icien way. De ence capabili ies, howe e , could
also be inc eased by mo e e iciency, o example in p o-
cu emen o new equipmen . Ki s en (2023), o example,
sugges s ha Ge many is 40% less e icien in he use o
i s de ence budge han he a e age o i s Eu opean pee s.
While calcula ing ine iciencies is based on many assump-
ions and mus be e alua ed, e iciency in p ocu emen and
he use o unds can clea ly be imp o ed in many Eu opean
coun ies. The iden i ica ion o high ine iciencies in he use
o de ence esou ces a he sugges s ha e en mo e o
he budge would need o be used o achie e he equi ed
de ence capabili ies o compensa e o ine iciencies in he
sho e m.
Howe e , e iciency can also be s eng hened ia be e
coo dina ion and in eg a ion among he Eu opean pa -
ne s. While i will ake some ime o bea ui , his seems
o be an impo an s ep o wa d. Al hough i is no ealis ic
o hink abou abandoning na ional a mies soon, be e
coo dina ion o specialisa ions be ween na ional a mies
could s eng hen he compa a i e ad an ages o di e -
en uni s. Fu he mo e, Eu opean pa ne s also ha e g ea
po en ial o aise e iciency ia join Eu opean p ocu e-
men and R&D p og ammes, in which na ional and po-
li ical in e es s should be a oided. The Eu opean de ence
indus y is widely agmen ed along na ional bo de s
and uses a a ie y o de ence sys ems, which a e a ely
compa ible wi h each o he o wo k in in eg a ed sys ems
(Schleppe , 2024). Compa ed o he US, Eu opean coun-
ies spend less on de ence bu ha e i e imes as many
de ence sys ems as he US and many mo e de ence com-
panies (Chinn e al., 2024).7 As a esul , leading Eu opean
7 In Eu ope, o example, 19 di e en ypes o main ba le anks a e in
use, compa ed o jus one in he USA (Chinn e al. 2024).
ZBW – Leibniz In o ma ion Cen e o Economics 209
Fo um
Do n, F., Po a ke, N., & Schleppe , M. (2023). NATO De ense Spending in
2023: Implica ions One Yea A e Russia’s In asion o Uk aine. Econ-
Pol Policy B ie , 7(50).
Do n, F., Po a ke, N., & Schleppe , M. (2024). Eu opean De ence Spend-
ing in 2024 and Beyond: How o P o ide Secu i y in an Economically
Challenging En i onmen . EconPol Policy Repo , 8(45).
Do n, F., & Schleppe , M. (2023). Fiskalische Zei enwende in Deu schland
– Implika ionen des Sonde e mögen Bundesweh au die Haushal -
spoli ik. i o Schnelldiens , 76(7), 23–31.
Fues , C., & Pisani-Fe y, J. (2019). A P ime on De eloping Eu opean
Public Goods. EconPol Policy Repo , 3(16); Repo w i en a he e-
ques o Minis e s B uno Le Mai e and Ola Scholz.
Fues , C. (2024, Ma ch 21). A New T ump E a and I s Consequences.
EconPol Expe Opinion. h ps://www.econpol.eu/expe -opinion/a-
new- ump-e a-and-i s-consequences
Ki s en, B. (2023). Es geh nich nu um Inpu und Geschwindigkei . An-
sä ze zu Bes immung de E izienz on Ve eidigungsausgaben im
in e na ionalen Ve gleich. GIDS S a emen , 12/2023. Ge man Ins i u e
o De ence and S a egic S udies.
Ma sh, N., Ma ins, B. O., & Mawdsley J. (2024). Eu opean De ense
Spending: T ade-O s and Consequences o Non-Alignmen . EconPol
Fo um, 25(4), 20–23.
Maulny, J.-P. (2023). The Impac o he Wa in Uk aine on he Eu opean
De ence Ma ke . IRIS Policy Pape . Ins i u De Rela ions In e na ion-
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loads/2023/09/19_P ogEu opeIndusDe _JPMaulny.pd
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NATO A e in a Race Agains Time. DGAP Policy B ie , 34.
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line. www.na o.in /cps/en/na ohq/ opics_49198.h m
NATO (2023b, July 11). Vilnius Summi Communiqué. www.na o.in /cps/
en/na ohq/o icial_ ex s_217320.h m
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[P ess Release].
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spen i Eu ope wan o apidly imp o e i s own de ence
capabili ies and de e ence capaci y.
Thi d, mili a y cos s a e much highe o he Eu opeans
han o Russia. This is why Russia alone (wi hou i s al-
lies) has lowe cos s o a la ge a my he likes o all Eu o-
pean NATO coun ies combined.
Finally, NATO (2023b) i sel announced ha he membe s
“a i m ha in many cases, expendi u e beyond 2% o
GDP will be needed in o de o emedy exis ing sho alls
and mee he equi emen s (…) om a mo e con es ed se-
cu i y o de .”
De ence spending needs o be inc eased bu his is no
ye e lec ed in he budge p io i ies o many (Wes e n)
Eu opean go e nmen s. A e he end o he Cold Wa e a,
many Eu opean coun ies educed hei de ence spend-
ing and inc eased social spending. Re e sing he peace
di idend aces conside able poli ical esis ance, bu he
iscal space o se e al Eu opean go e nmen s is limi ed
due o high le els o deb and social spending, and low
economic g ow h. Eu opean go e nmen s need a c ed-
ible plan o pe manen ly inc ease de ence spending o-
wa ds a highe le el wi hou jeopa dising iscal s abili y
and economic compe i i eness (Do n e al., 2024). Whe h-
e Eu ope will ge mo e sel -su icien and less elian on
he US ul ima ely depends on whe he i p io i ises a su -
icien de ence budge . De ence capabili ies mus also be
inc eased by mo e e iciency. Tha said, he EU’s mili a y
weakness is only pa ly due o a lack o de ence spend-
ing; i is also a consequence o he agmen a ion o Eu-
ope’s a med o ces and de ence indus ies. Eu ope’s
secu i y can also be s eng hened by a be e and mo e
e icien in eg a ion among Eu opean pa ne s and a be -
e and close coope a ion in R&D and he p ocu emen o
in eg a ed Eu opean de ence sys ems.
Re e ences
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