As Europe prepares for a decade-long arms shopping spree to rebuild neglected militaries and narrow the gap with US firepower, its spending choices will shape the continent’s industrial base for years to come.
In June, NATO countries agreed to spend 3.5% of their Gross Domestic Product (GDP) on defence in order to meet the military capability requirements outlined in the alliance’s defence plans.
For the 23 EU members of NATO, this means a whopping annual increase of nearly €270 billion, according to calculations from the Bruegel think tank. These funds are expected largely to flow into the defence industry and military recruitment.
A central question is now whether European countries will invest in developing their domestic defence industry or continue to rely heavily on US-made equipment.
The NATO spending commitments are simple targets, leaving each ally relatively free to decide what exact weapons to buy and from whom.
European allies are splitting along a spectrum, from those leaning heavily on US weapons to those insisting on buying European, with each path offering both short-term fixes and longer-term strategic bets.
On the spectrum
US-made systems have a clear attraction. High-end options such as the F-35 fighter jet or Patriot air-defence batteries carry eye-watering price tags but can help governments hit NATO’s spending target quickly.
For underfunded militaries, big-ticket purchases have long been the fastest way to show progress after years of neglect.
The Patriot is a case in point. One battery costs around $1 billion, and each interceptor missile comes with a roughly $4 million price tag.
In August, a small group of European countries agreed to purchase more Patriots, further increasing their defence budgets and reliance on US-made gear. A European alternative to the Patriot, the Franco-Italian SAMP/T battery and Aster 30 missiles, is around a third cheaper.
France and Spain in particular have argued that building a robust European defence industry is an essential security priority. To that end, France has long avoided buying US-made weaponry whenever possible.
The two countries joined with Germany on the ambitious and expensive Future Combat Air System (FCAS) next-generation fighter jet project, a European alternative to foreign options, particularly those produced in the US.
At the other end of the spectrum, Poland has seen its national security priorities centred on quickly acquiring military hardware in large quantities, regardless of the source.
Europe’s clear defence spending champion, Warsaw has more than doubled its military budget in just five years, hired tens of thousands of additional soldiers and modernised its fleet of F-16 fighters while also buying new fifth-generation F-35 jets.
The Polish armed forces also stocked up on rocket launchers, more than 100 new helicopters, scores of heavy tanks and much more. The country has prioritised speed in deals for military equipment, a key motivation behind Warsaw’s burgeoning relationship with South Korean arms makers.
Poland has purchased second-hand vehicles worth €2.24 billion as part of its bid to modernise the military, following a big increase in spending since the war in Ukraine started, according to the WNP.pl portal.
Poland has been more wary of big-ticket European defence projects while maintaining deep ties to a number of US defence contractors.
Is reliance on the US healthy?Most European NATO forces have extensively purchased American gear for years, assuming it would guarantee them a better relationship with Washington, the military alliance’s dominant power.
But Donald Trump’s return to the White House earlier this year, and his administration’s reluctance to promise Europeans unambiguous support in case of war, has forced governments to question whether buying American really buys influence or favourable treatment.
Critics warn that purchasing further US-made equipment does little to resolve Europe’s dependence on American technology or foster the growth of the European defence industry.
NATO’s spending target also contains no incentives to purchase European-made products to build up local industrial capacity.
Instead, the GDP-based target can reward splurging on the priciest gear or enormous quantities of useless gear to show money is being spent, or favour exporters that can deliver fastest – often from the US or South Korea – while many European production lines face backlogs, especially in missile and ammunition production.
That spending race has already pushed up prices in the global arms market, where costs have soared since Russia’s full-scale invasion of Ukraine in 2022. The price of NATO-standard 155mm artillery shells has quadrupled, from around €2,000 before the war to about €8,000 recently.
However, focusing on budget figures alone risks prioritising optics over efficiency and real war-fighting capacity. That was a criticism voiced by Spanish Prime Minister Pedro Sánchez when he rejected NATO’s new GDP-based targets, arguing that Spain could deliver the required military capabilities while spending significantly less.
But NATO countries signed up to the task at The Hague summit in June, and will spend the next years trying to meet expectations. The alliance grades progress in yearly updates, adding pressure to deliver on their promises.