In 2019, the last year for which figures are available, total defence expenditure stood at €186 bn, marking a 5 percent increase on 2018, and making it the highest level ever recorded by European Defence Agency (EDA) since it began collecting data in 2006.
Donald Trump, during his term in office, constantly berated NATO members, with the exception of the UK, for not spending enough on defence.
The Brussels-based agency's report also finds almost all EU Member States increased their overall defence spending in 2019, with "significant" increases on procurement of new equipment.
At €186bn, total defence expenditure corresponds to 1.4 percent of the 26 EDA Member States’ gross domestic product (GDP) and marks the fifth year of consecutive growth. The 5 percent rise in spending recorded in 2019 represents the strongest increase since the general trend of defence spending was reversed in 2015 following the financial crisis.
“European defence spending reaching a new high is a positive development and clear response to Member States’ threat perception. Despite this progression, defence budgets remain vulnerable, with the economic impact of COVID-19 yet to be felt” Jiří Šedivý, EDA Chief Executive
EDA’s report also finds strong variations in growth in defence spending among Member States, ranging from increases of 0.01 percent to 125 percent. Of the 26 Member States, 23 raised defence expenditures compared to 2018, four by more than €1bn, with only three decreasing their spending in 2019.
EDA’s report, based on data provided by Ministries of Defence, also finds that total defence expenditure represented 2.9 percent of total government expenditure.
In 2019, EDA Member States:
- Spent €41.4 bn on defence investments (equipment procurement and research and development) which corresponds to an increase of 19 percent compared to 2018;
- Reached the benchmark of spending at least 20 percent of total defence expenditure on defence investment for the first time since 2010 with 22 percent overall.
The report says Member States also allocated 83.1 percent of defence investments to procure new equipment, whereas funding for defence R&D remained limited to 16.9 percent.
EDA Chief Executive, Jiří Šedivý, said: “European defence spending reaching a new high is a positive development and clear response to Member States’ threat perception. Despite this progression, defence budgets remain vulnerable, with the economic impact of COVID-19 yet to be felt.”
“Increased spending on defence is a positive trend that should be sustained and enhanced going forward with the additional benefit of the EU defence initiatives. The regular review in the CARD framework and the fulfilment of the PESCO commitments should contribute positively to better spending and ultimately to the cooperative development of innovative, interoperable and effective capabilities.”
It is not all good news though. Despite the rise in total defence expenditure, collaborative defence spending has gone backward. In 2019, Member States spent a total of €7bn on the procurement of new equipment in cooperation with other Member States, representing a fall of 6 percent compared to 2017.
The report says Member States conducted 20 percent of their total equipment procurement in cooperation with other EU countries in 2019, falling well short of the 35 percent collective benchmark and marking a significant drop off since of the relatively high 27 percent recorded in 2017.