ANALYSIS: The 11 percent defense-spending jump, Europe changes era

Introduction: a number that confirms a historic shift

Eleven percent, announced at the Ankara summit

On July 7, 2026, on the eve of the NATO summit in Ankara, the Alliance confirmed that core defense spending by Europe and Canada had risen 11% in 2026, pushing the combined total to 634 billion dollars, up from 571 billion dollars in 2025. This increase, substantial as it is, marks a slowdown compared to the nearly 19% jump recorded between 2024 and 2025, according to official NATO figures relayed by Arab News.

This slower growth rate should not be read as a loss of momentum in the European effort. It instead reflects a logical budgetary reality: after a spectacular year-over-year jump, it becomes mathematically harder to sustain an identical growth percentage on an already much larger base. This analysis sets out to unpack what this 11% figure really hides, country by country, region by region.

Why this number deserves a closer look

Behind this aggregate statistic lie radically different national trajectories. Some countries, like Poland and the Baltic states, were already well past NATO's new targets before this announcement, while other Alliance members, particularly in Southern Europe, still need to multiply their budgetary efforts several times over to reach the targets set for 2035.

Understanding this unevenness is essential to assessing the real solidity of the Western defensive posture against Russia. An average figure of 11% can mask countries making considerable efforts alongside others still lagging dangerously behind the commitments made in The Hague in 2025.

Eleven percent is the kind of number you can celebrate or criticize depending on the angle you choose. I would rather dissect it country by country, because it is there, in the national details, that the real credibility of Western deterrence against Putin is decided.

The new 5 percent target, explained clause by clause

A target born under Trump's pressure

This 11% increase is part of the historic agreement reached at the NATO summit in The Hague in June 2025, under explicit pressure from American President Donald Trump. That agreement commits all thirty-two member states, except Spain, which secured a negotiated exemption, to raising their defense and security spending to 5% of gross domestic product by 2035, more than double the old 2% threshold set at the Wales summit in 2014.

This target breaks down into two precise components: 3.5% of GDP must go to core defense spending, meaning military personnel, equipment, and operational readiness, while an additional 1.5% must fund broader security areas, including critical infrastructure, cyber defense, and military mobility corridors essential to the Alliance's logistics.

A review planned for 2029

The The Hague declaration provides for a collective review of progress in 2029, ahead of the final 2035 deadline. This interim review clause allows NATO to adjust its expectations if certain member states fall significantly behind, while maintaining constant political pressure on governments reluctant to speed up their military investments.

According to NATO itself, five member states are already expected to hit the 3.5% threshold for core defense spending in 2026, while seventeen Allies are expected to meet the 1.5% threshold for security-related investments, well ahead of the 2035 deadline set in The Hague.

That seventeen countries already meet the second part of this target, almost ten years ahead of the deadline, shows that Trump's pressure, however blunt in form, produced a real effect. I don't like his methods, but I cannot deny this result.

Poland and the Baltic states, leading the European pack

Warsaw, the Alliance's undisputed champion

Poland stands out as the nation devoting the largest share of its gross domestic product to defense among all European NATO countries. According to Notes from Poland, the Polish budget for 2026 projects defense spending reaching 4.8% of GDP, a level already well past the new core target of 3.5% set for 2035, with a record allocation of 200 billion zlotys dedicated exclusively to national defense.

This Polish priority, which even surpasses the 3.2% the United States itself devotes to its own core defense spending according to the most recent data, is directly explained by the country's geographic proximity to Russia and Belarus, as well as by the deep historical memory of a people who paid dearly, over the twentieth century, for their lack of military preparedness against their neighbors.

The three Baltic states join the 5 percent club

Estonia, Lithuania, and Latvia, the three Baltic republics sharing a direct border with Russia, are all expected to hit the final target of 5% of GDP as early as 2026, according to a New York Times analysis published on July 7, 2026. Estonia has even announced pushing its defense spending beyond 5% this year already, a remarkable budgetary feat for one of the Alliance's smallest member states by population.

Latvia, for its part, has set its spending target at 4.73% of GDP for its 2026 defense budget, while Lithuania has also confirmed its commitment to reach 5% this same year. These three nations, buying up drones, air-defense systems, and ammunition on a massive scale according to the New York Times, illustrate a strategic urgency few other European countries feel with the same existential intensity.

Watching small countries like Estonia or Latvia surpass 5% before Germany or France should give the major Western capitals pause. Legitimate fear of an aggressive neighbor motivates far more effectively than any summit communiqué.

Germany, an unprecedented budgetary transformation since 1990

A spending level unseen since reunification

Germany recorded a 24% year-over-year increase in defense spending, reaching 114 billion dollars in 2025, according to data from the Stockholm International Peace Research Institute relayed by Military.com. This amount represents the largest total among all European NATO countries, and marks the first time since 1990 that Berlin has devoted more than 2% of its gross domestic product to national defense.

This transformation accelerates further in 2026: according to sources at the German finance ministry cited by Reuters, Berlin's budget projects record investments of 126.7 billion euros and borrowing of 174.3 billion euros aimed at strengthening infrastructure and defense, with a stated goal of reaching 3.5% of GDP by 2029, six years ahead of NATO's final deadline.

A chancellor who made defense his political priority

Chancellor Friedrich Merz personally drove this major budgetary reform, leaning on a March 2026 amendment to the constitutional debt brake rule that now allows Germany to borrow up to 380 billion euros to fund its defense between 2025 and 2029. Germany's defense budget is thus expected to rise from 86 billion euros in 2025 to 108 billion euros in 2026, then to 152 billion euros by 2029.

This spectacular budgetary reorientation, historically unthinkable for a country long marked by a political culture of military restraint inherited from the Second World War, illustrates the scale of the change of era that the war in Ukraine has forced on the entire European continent since 2022.

A Germany borrowing hundreds of billions to rearm itself is a turning point few analysts would have dared predict ten years ago. Putin managed, without meaning to, to wake up precisely the military giant he hoped to neutralize through fear.

France and the United Kingdom, more measured progress

Paris, caught between budgetary ambition and deficit constraints

France raised its defense allocation to 68.5 billion euros for 2026, or 2.25% of its gross domestic product, according to European Parliament data, despite considerable budgetary pressure tied to its public deficit. This level, though steadily rising since 2022, still falls far short of NATO's core 3.5% threshold, with real movement toward that target remaining, according to the Washington Examiner, a distant prospect for 2026 and 2027.

This French budgetary caution contrasts with the urgency shown by Germany or Poland, and illustrates the internal political tensions President Emmanuel Macron faces between the strategic necessity of rearming the country and the constraints of an already considerable public debt.

London, held back by recruitment struggles

The United Kingdom, which has faced persistent difficulties recruiting and retaining military personnel according to the New York Times, plans to invest 2.7% of its GDP in defense priorities by next year and through 2029, with lingering uncertainty over the precise timeline for reaching the core 3.5% threshold. British Prime Minister Keir Starmer had nonetheless warned as early as June 2025 of the risk of a Russian attack on a NATO member state, announcing an increase in spending to 2.5% of GDP starting in 2027, with a further goal of 3%.

This British trajectory, more cautious than that of its Eastern European neighbors, reflects the structural challenges of an armed force that must first solve its internal personnel problems before it can fully benefit from the additional budgets allocated by the government in London.

France and the United Kingdom, the continent's two historic nuclear powers, are moving with a caution that contrasts oddly with Polish or Baltic urgency. I see this less as a lack of will than a lack of real budgetary room.

Southern Europe, the weakest link in the collective effort

Italy, Spain, and Portugal, still facing dizzying required increases

According to an analysis published by Intereconomics, Italy, Spain, and Portugal still need to considerably increase their defense-spending effort to reach the core 3.5% of GDP target. Italy will need to raise its defense burden by 211%, Portugal by 226%, and Spain by 249% relative to their current levels — increases that give a sense of just how far these Mediterranean economies still have to go.

Italian Prime Minister Giorgia Meloni nonetheless announced, according to a Reuters analysis published on July 6, 2026, that Rome would raise its core and non-core defense spending to 2.8% of GDP in 2026, about 0.71 percentage points more than the previous year — a notable effort for a country carrying one of the heaviest public-debt burdens in Europe.

Spain's special case, the only negotiated exemption

Spain remains the only NATO member state to have secured a formal exemption from the new 5% target, committing instead to cap its defense spending at roughly 2.1% of GDP, while maintaining it can achieve equivalent capability outcomes at this lower funding level, according to Spanish Prime Minister Pedro Sánchez. This exception, negotiated even before the 2025 The Hague summit, continues to draw implicit criticism from several other Allies who, for their part, meet the common target without any special waiver.

Slovenia and Belgium, for their part, must nearly quadruple their current spending, with required increases of 282% and 292% respectively, while Luxembourg, entirely surrounded by much larger allied countries, faces the most extreme adjustment in the whole Alliance, needing a 419% increase in its current defense burden.

Spain negotiating an exemption while still fully enjoying the Alliance's collective protection strikes me as hard to justify morally, even though I understand the budgetary constraints Madrid cites. Collective security should not be a la carte.

The Readiness 2030 program, the industrial engine behind this rise

Eight hundred billion euros mobilized across the European Union

Beyond NATO's commitments alone, the European Union has launched its own continental rearmament plan called Readiness 2030, formerly known as ReArm Europe, which aims to mobilize more than 800 billion euros in defense-related investment across the bloc by 2030. This program, announced on March 4, 2025, focuses specifically on closing the critical military-capability gaps identified by European military staffs since the start of the war in Ukraine.

According to estimates from BNP Paribas, European Union countries spent nearly 400 billion euros in 2025, slightly above the initial expectations of the European Defence Agency, marking an increase of nearly 17% compared to 2024. This spending pushed the share of European GDP devoted to defense to 2.15% in 2025, up from 1.9% the previous year.

A further acceleration still expected in 2026

The same BNP Paribas projections anticipate a fresh acceleration in 2026, with an additional roughly 80 billion euros pushing European defense spending to about 2.5% of the European Union's collective GDP. This trajectory, if confirmed, would bring the continent significantly closer to NATO's core 3.5% target for 2035, though the gap remains considerable for many member states.

Investment in military equipment, the most dynamic component of this budgetary rise, reached 106 billion euros in 2024 before climbing to about 130 billion euros in 2025, according to European Parliament data, a rise that directly benefits European manufacturers such as Rheinmetall, BAE Systems, KNDS, and ThyssenKrupp.

Eight hundred billion euros mobilized at continental scale is no longer summit rhetoric — it is a real industrial transformation already reshaping the order books of Europe's major defense groups.

Europe's industrial capacity, strained by rising demand

Factories struggling to keep pace with orders

Despite the scale of these investments, several analyses note that Europe's defense industrial base remains strained by the growing demand these new budgets generate. According to a video analysis devoted to the subject, the European 800 billion euro plan already exceeds, in certain critical industrial segments, the real production capacity of European factories specializing in ammunition, armored vehicles, and air-defense systems.

This tension between budgetary ambition and industrial reality is one of the major challenges of the coming years for all European Allies, who must simultaneously fund the expansion of their production capacity while meeting immediate operational needs tied to continued support for Ukraine against Russian aggression.

A sector projected for double-digit growth this decade

Sector forecasts point to revenue growth for the European defense industry exceeding 10% annually throughout the coming decade, a pace that reflects the scale of the economic transformation underway across the continent. This growth dynamic, while representing a significant economic opportunity for the industrial regions involved, also raises legitimate questions about the fair distribution of contracts between established major groups and smaller-scale suppliers.

This rapid industrial expansion, if it holds at the currently projected pace, could gradually reduce Europe's historic dependence on American military equipment, an evolution that fits directly into the logic of strategic accountability demanded by the Trump administration since its return to the White House.

An industrial base struggling to keep pace with its own budget is a problem summit communiqués never solve. Promised money only becomes real military capability the day the factory can actually deliver the armored vehicle or the shell that was ordered.

The transatlantic disparity, a burden that remains American

The United States still funds most of the collective budget

Despite this notable rise in European contributions, the United States continues to carry most of the financial burden of NATO as a whole. According to Anadolu Agency, U.S. national defense spending reached about 838 billion dollars in 2025, nearly 60% of the Alliance's combined spending, even though the United States accounts for only about 43% of the cumulative gross domestic product of all member states.

This persistent disparity between America's economic weight and its disproportionate share of the collective military burden is precisely the central argument the Trump administration has used to justify its constant pressure on European Allies to significantly raise their own defense budgets since 2025.

A modest but symbolic common budget

NATO's common operating budget, which funds headquarters, the permanent command structure, and shared military infrastructure, stands at just 5.3 billion euros for 2026, a sum representing less than 0.4% of all Allies' combined defense spending, which now exceeds 1,400 billion dollars in total according to Anadolu Agency.

The direct American contribution to this common budget stands at 14.9% in 2026, a percentage identical to Germany's, which illustrates, within the scope of this specific shared budget, a far more balanced burden-sharing than what is observed in each member state's overall national defense spending.

That the United States still pays 60% of the total despite Trump's push for fairer burden-sharing reveals an unavoidable reality: no European budget increase, even at 11%, closes that gap in just a few years.

What this budgetary rise means for Ukraine

A direct link between European rearmament and support for Kyiv

This general rise in European defense budgets does not merely strengthen each member state's national capabilities: it also indirectly funds a growing share of the military support provided to Ukraine in its defensive war against Russia. The same industries benefiting from increased national orders also supply a substantial part of the equipment delivered to Kyiv by its European partners.

This convergence between European national rearmament and continued support for Ukraine illustrates a strategic reality increasingly recognized across the continent: the security of Europe and Ukraine's survival against Russian aggression are no longer two separate issues, but two facets of the same collective deterrence equation against Vladimir Putin.

Strengthened deterrence against Russian ambitions

This massive budgetary increase, compounded over several consecutive years, sends a deterrence signal increasingly hard for the Kremlin to ignore. A Europe investing hundreds of billions of additional dollars every year in its military capabilities becomes, by definition, an increasingly costly adversary to challenge militarily, even in a hypothetical scenario where the war in Ukraine ends in a ceasefire in the coming years.

This long-term deterrent dimension, often overshadowed in media coverage by raw figures and burden-sharing disputes, is probably the single most important strategic stake of this budgetary transformation for the security of the entire European continent in the decades ahead.

Every additional billion Europe invests in its own defense is also, indirectly, a billion that complicates Putin's long-term strategic calculations. That may be the most positive side effect of this war he himself unleashed.

The criticisms and gray areas in this budgetary accounting

Expanded definitions that raise legitimate questions

According to the New York Times, some countries have broadened their budgets by folding in initiatives that push the boundaries of the traditional definition of military spending, even while technically complying with the new spending criteria NATO set the previous year. These guidelines indeed allow member states to devote up to 1.5% of their GDP to defense-related projects in the broad sense, including upgrading military transport routes, hardening civilian infrastructure against cyberattacks, converting underground parking garages into air-raid shelters, and building hospitals that also serve veterans.

This definitional flexibility, while it responds to a coherent strategic logic of comprehensive national resilience, raises legitimate questions about the real comparability of the figures put forward by each member state, and about the share actually devoted to directly operational military capabilities rather than dual-use civilian infrastructure.

The Czech case, a telling example of internal tensions

Czech Prime Minister Andrej Babiš himself admitted, according to the New York Times, that his country risks missing its 2026 spending targets, while suggesting that his political alignment with American President Donald Trump could shield him from significant diplomatic consequences. This frank admission illustrates the internal political tensions this ambitious new target continues to generate, even among governments openly sympathetic to Washington's hard line on burden-sharing.

This reality is a reminder that meeting NATO's collective targets ultimately depends on sovereign national budgetary decisions, sometimes driven more by internal political calculations than by a rigorous assessment of the real strategic needs posed by the Russian threat.

Turning a parking garage into an air-raid shelter and counting it as defense spending is exactly the kind of gray area that should push journalists to examine every national budget with methodical skepticism rather than blind trust.

The Chinese threat, the backdrop to this budgetary race

A rearmament that goes beyond the Russian dossier alone

Although the war in Ukraine remains the immediate trigger for this massive budgetary increase, several Western analysts point out that China also constitutes, in the background, a growing strategic concern that justifies this accelerated European rearmament. A more militarily autonomous and better-equipped Europe reduces American reliance on its European Allies for the continent's conventional defense, potentially freeing up American resources to focus on the Indo-Pacific region.

This strategic logic, rarely spelled out publicly by European leaders for obvious diplomatic reasons, is nonetheless an important background factor in the constant pressure exerted by Washington for Europe to take on greater responsibility for its own security against Russia, Iran, and North Korea, the authoritarian axis whose growing coordination worries Western intelligence services as a whole.

Deterrence across several simultaneous theaters

This multi-theater dimension of Western strategy confirms that the current European budgetary effort is not limited to responding to the immediate threat posed by Russia in Ukraine, but fits into a much broader reflection on the West's ability to simultaneously deter several potential adversaries across geographically distinct theaters, from Eastern Europe to the Taiwan Strait.

This broader strategic reality justifies, in my view, the very scale of the 5% of GDP target, a level that would have seemed politically unimaginable for most European countries before Russia's invasion of February 2022, but that now appears as a strategic necessity in an increasingly unstable and multipolar world.

That China looms in the background of this European rearmament should surprise no one. Beijing watches every Western defense budget closely, and every additional billion invested in Europe also, indirectly, complicates its own calculations on Taiwan.

Canada, a North American partner also raising its effort

Ottawa announces an accelerated path toward the new thresholds

Canada, often criticized within NATO for its chronic lag behind defense-spending targets, announced in 2026 a notable acceleration of its budgetary trajectory, with a renewed commitment to close the gap that had for years separated it from the core 2% of GDP threshold. This announcement fits directly into the aggregate calculation behind the 11% increase confirmed by NATO, since the combined total of 634 billion dollars explicitly groups Europe and Canada together.

The Canadian government, under constant pressure from Washington and its European partners, has said it wants to fold more Arctic security spending, naval capabilities, and armed forces modernization into its overall calculation of contribution to the Alliance — a direction that responds directly to the persistent criticism voiced by the Trump administration since its return to the American presidency.

A partner still far from the leading European standards

Despite this announced acceleration, Canada remains far behind countries like Poland or the Baltic states in the share of its gross domestic product devoted to defense, a reality that continues to fuel criticism from some European Allies who feel Ottawa benefits from the Alliance's collective protection without shouldering a proportional share of the financial burden.

This two-speed North American dynamic, between a United States funding most of the collective military budget and a Canada only gradually accelerating its own effort, illustrates once again the persistent unevenness that characterizes the entire Atlantic Alliance in the face of the strategic necessity documented since 2022.

Canada likes to present itself as a reliable ally, but its defense-spending numbers have long told a different story. This late acceleration, if it truly holds up in voted budgets, would be welcome, but it still needs to be proven over several years.

The limits of this analysis, honestly acknowledged

What aggregate figures do not always reveal

It is worth acknowledging the inherent limits of any analysis based on aggregate budgetary statistics. Official NATO and European Union figures, though rigorously compiled, do not always allow for full verification of exactly what share of each national budget actually translates into operational military capability delivered within a reasonable timeframe, rather than mere accounting commitments rolled over year after year.

This methodological caution is all the more necessary since several member states, as shown by the Czech case mentioned earlier, themselves admit difficulties meeting their own declared targets, which suggests that optimistic projections for 2027, 2029, or 2035 should be read with some analytical reserve rather than absolute confidence.

An aggregate figure always reassures more than it informs. I would rather dwell on the national gaps, because that is precisely where the real cracks in Western collective deterrence are hiding.

What the near future will allow us to verify

NATO's upcoming annual reports, along with updated data from the Stockholm International Peace Research Institute and the European Defence Agency, will show whether this budgetary growth trajectory holds at its current pace, accelerates as the Russian threat is perceived as growing, or slows under the weight of national budgetary constraints increasingly hard to reconcile with other public spending priorities.

This uncertainty, owned honestly rather than masked by surface optimism, is the only defensible analytical position on a dossier whose evolution will depend directly on the duration and intensity of the Russo-Ukrainian war in the months and years ahead.

I would always rather check actual deliveries than announced percentages. A voted budget is not a delivered tank, and recent European military history is full of examples where the two ended up diverging significantly.

Conclusion: a real rearmament, still uneven and fragile

What can be said with certainty about this 11 percent increase

At the end of this analysis, one conclusion stands out clearly: the 11% rise in core defense spending by Europe and Canada in 2026, confirmed by NATO itself, represents a real and substantial continuation of the budgetary transformation set in motion since Russia's invasion of Ukraine in February 2022. This increase brings the combined total to 634 billion dollars, a level that would have seemed unimaginable to most observers just five years ago.

This progress, documented by a range of sources from NATO itself to Reuters to the New York Times and Anadolu Agency, nonetheless remains deeply uneven across countries, with nations like Poland, Estonia, Lithuania, and Latvia well ahead of their targets, while Italy, Spain, and Portugal still have considerable ground to cover to close their structural gap.

What this trajectory means for the future of European security

This budgetary transformation, uneven as it currently is in its execution, confirms a historic shift in Europe's strategic posture against Vladimir Putin's Russia. A continent investing hundreds of billions of additional dollars every year in its own defense, while continuing to massively support Ukraine in its resistance against aggression, sends a signal of collective determination that goes well beyond the periodic disputes over the exact sharing of the financial burden among Allies.

Russia, China, Iran, and North Korea are all watching this Western budgetary trajectory closely, and every additional billion invested in Europe further complicates their respective strategic calculations for the years ahead, even though the road to the final target of 5% of GDP by 2035 remains long and littered with considerable political and industrial obstacles.

Signed Maxime Marquette, columnist

Columnist's transparency note

What I know and what I do not know

I know that NATO confirmed, on July 7, 2026, an 11% rise in core defense spending by Europe and Canada, bringing the combined total to 634 billion dollars, up from 571 billion the previous year, according to official figures relayed by Arab News and NATO itself. I also know, according to multiple converging sources, that this progress remains very uneven among member states, with considerable gaps between Poland and the Baltic states on one side, and Southern Europe on the other.

I do not know with certainty what exact share of each national budget will actually translate into operational military capability delivered within the announced timelines, nor whether the current pace of progress will hold through the 2035 deadline. I would rather clearly name these uncertainties than present budgetary projections as settled certainties.

Method

This analysis relies on official NATO data published on July 7, 2026, on reporting by Reuters, the New York Times, and Anadolu Agency covering the Ankara summit, as well as on additional analyses from the Stockholm International Peace Research Institute, the European Parliament, and BNP Paribas published between 2025 and July 2026. No scene has been invented, no direct testimony is claimed, and every figure cited is reproduced faithfully from available sources.

My editorial angle remains openly stated: I regard this budgetary increase as a necessary strategic response to the Russian threat documented since 2022, while keeping a critical eye on the accounting gray areas and the persistent gaps between official commitments and their concrete implementation on the ground.

Sources

Primary sources

NATO, defense investment update, record spending in Europe and Canada, July 7, 2026

NATO, defense expenditures and the Alliance's 5 percent commitment, June 29, 2026

Arab News, NATO announces 11 percent rise in core defense spending in Europe, July 7, 2026

Reuters, NATO sees sharp increase in Europe's and Canada's defense spending, March 26, 2026

Reuters via Internazionale, NATO's defense push already strains Europe's budgets, July 6, 2026

Secondary sources

The New York Times, NATO Allies try to show Trump they are paying for their own defense, July 7, 2026

Military.com, German defense spending hits 36-year high, April 27, 2026

Notes from Poland, Poland plans record defense spending of 4.8 percent of GDP in 2026

Intereconomics, can Europe deliver NATO's five percent, 2026

Anadolu Agency, where NATO Allies stand ahead of the Ankara summit, July 1, 2026