Media365
Europe is entering its biggest defence spending cycle in decades. But while the political goal is to strengthen the continent’s security and reduce dependence on Washington, a large part of the money may end up boosting the US defence industry instead.
As NATO leaders meet in Ankara this week, member states are expected to restate their commitment to sharply raise military spending over the next decade. The push is meant to make Europe more self-reliant, but the combination of urgent battlefield needs, weak domestic production capacity and years of underinvestment means US defence companies are still best placed to win a major share of the new orders.
The renewed spending drive comes as NATO Secretary General Mark Rutte urges allies to submit “clear, concrete and credible” plans to meet the alliance’s new targets. Last year’s summit set a goal of spending 5 per cent of GDP on defence and security-related investments by 2035, including 3.5 per cent on core military capabilities and another 1.5 per cent on related security infrastructure.
Europe’s defence spending boom gathers pace
The scale of Europe’s rearmament is already visible.
According to NATO, European allies and Canada increased defence spending by an additional $90 billion in real terms in 2025 compared with the previous year. In nominal terms, that rise is about $139 billion, taking their combined military expenditure to more than $570 billion.
Germany has
emerged as the biggest spender. After easing its long-standing borrowing restrictions for defence, Berlin plans to more than double military spending to over €200 billion by 2030. Poland, Lithuania and Estonia are also rapidly expanding their defence budgets as they seek to deter what they see as a more aggressive Russia.
Other countries are following suit. Britain has announced an additional £15 billion defence package, Italy is preparing to raise military and security spending, and France plans to steadily increase defence expenditure to around 2.5 per cent of GDP before the end of the decade.
But not every NATO member has the fiscal room to move at the same speed. France is still dealing with budget deficits, Italy carries one of Europe’s heaviest debt loads, and Spain has said it does not intend to spend more than 2.1 per cent of GDP on defence.
Why US defence firms stand to benefit
Despite Europe’s ambition to build greater strategic autonomy, much of the continent’s military modernisation still depends on American technology.
A recent Bruegel policy study examining every notification under the US Foreign Military Sales programme since 2008 found that Europe’s purchases of American military equipment have risen sharply since Russia’s invasion of Ukraine in 2022. The report says Europe has deepened its dependence on US defence suppliers over the past four years, especially for advanced fighter jets, integrated air defence systems, long-range missiles and sophisticated command-and-control systems.
The numbers show how quickly the trend has accelerated.
US Foreign Military Sales to European allies averaged about $11 billion a year between 2017 and 2021. By 2024, that figure had jumped to roughly $68 billion as governments rushed to replenish stockpiles and modernise ageing armed forces.
Many of Europe’s biggest procurement programmes are built around American platforms. Countries across the continent have ordered Lockheed Martin’s F-35 stealth fighters, Patriot missile defence systems, HIMARS rocket launchers and precision-guided munitions. These purchases also create long-term dependence because maintenance, software updates, spare parts and future upgrades remain tied to US manufacturers.
Rutte recently acknowledged that reality, saying European and Canadian governments currently have around $300 billion worth of outstanding defence orders with US companies, supporting an estimated 195,000 US jobs.
“For some key capabilities, Europe can basically only acquire, or at that level of quality, acquire from the United States,” Rutte told the Financial Times ahead of the summit.
Capacity constraints remain Europe’s biggest hurdle
Europe’s own defence industry is growing quickly, but it still cannot meet demand on its own.
Companies including Rheinmetall, Leonardo, Saab, BAE Systems and Thales have announced major investments to expand production. Ammunition output in Europe has risen sharply since 2022, while governments are pouring billions into missile production, drone manufacturing and other defence technologies.
Even so, industry executives warn that building new production lines takes years, not months.
According to experts, many European defence firms remain cautious about making large investments because they are unsure whether today’s surge in spending will last.
Those supply constraints leave governments with little choice but to keep turning to established US manufacturers that can deliver advanced systems more quickly.
Strategic autonomy remains a work in progress
The spending surge also exposes a contradiction at the heart of Europe’s security strategy.
European leaders increasingly argue that the continent must become less dependent on Washington, especially after repeated calls from US President Donald Trump for allies to shoulder more of their own defence burden. The Trump administration has also announced troop reductions in Europe and launched a review of the US military presence across the continent.
Yet the same security concerns are pushing European governments deeper into reliance on US weapons.
Analysts warn that dependence goes beyond buying military hardware. Advanced American systems often require proprietary software, long-term maintenance contracts, intelligence integration and continuous upgrades that remain under US control, giving Washington significant leverage over European security capabilities.
The Bruegel report argues that unless European defence production grows faster than demand, rising military budgets could deepen rather than reduce Europe’s dependence on the United States over the next decade.
NATO summit to showcase new arms deals
The issue is expected to feature prominently at the NATO summit in Ankara, where alliance members are preparing to unveil defence procurement agreements worth tens of billions of dollars.
Among the expected announcements is NATO’s decision to replace its ageing fleet of US-built AWACS surveillance aircraft with Saab’s GlobalEye platform, one of the few major contracts likely to go to a European manufacturer rather than an American rival.
Even so, analysts believe such deals will remain the exception rather than the rule in the near future.
With Russia’s war in Ukraine continuing to reshape Europe’s security calculations and NATO allies under pressure to accelerate military spending, the continent’s rearmament is entering a new phase. But until Europe’s industrial capacity catches up with its political ambitions, much of the money generated by the defence boom is likely to keep flowing across the Atlantic to US defence contractors.
