Europe is rearming, but not every country at the same pace

Introduction: a two-speed arms race

A well-timed warning from S&P Global

Just days before the NATO summit set for Turkey, ratings agency S&P Global Ratings published an analysis that tempers the general enthusiasm around European rearmament: the rise in defense spending across the continent will, in its own words, be "uneven" from country to country. That finding, reported by CNBC on July 1, 2026, deserves to be told for what it really is: the story of twenty-seven national trajectories that are not converging at the same speed in the face of the same threat.

This comes as no total surprise to anyone who has followed this story since the start of the war in Ukraine, but a numbers-backed warning from an agency as influential as S&P Global lends extra legitimacy to a conclusion many observers had already been drawing more impressionistically.

Why this particular moment matters

This analysis arrives just as the twenty-seven European Union countries and the European members of NATO prepare to gather once again to discuss their collective commitments on military spending, in a context where Russia's war against Ukraine continues to fuel exchanges of strikes and where American pressure for a fairer sharing of the transatlantic defense burden shows no sign of easing.

Telling this story means telling the story of a continent that has grasped the urgency, but that discovers, year after year, that political will alone doesn't always overcome very real budget constraints.

Poland and the Baltic states, undisputed frontrunners of rearmament

A geography of fear that speeds up decisions

According to S&P Global, Poland and the Baltic states, namely Estonia, Latvia and Lithuania, are moving fastest in their rearmament efforts among all the European countries analyzed. This speed is no accident: these nations share a direct border or immediate proximity with Russia or its Belarusian ally, a geographic reality that turns every euro spent on defense into a matter of national survival rather than a simple budget choice.

This proximity to the threat largely explains why these countries have managed to build internal political consensus far more quickly than other European nations located farther from the Ukrainian war theater.

Budgets that reflect an urgency fully owned

Poland, in particular, has announced a string of major military acquisitions in recent years, positioning itself as one of the European countries devoting the highest share of its gross domestic product to defense, a budgetary choice its government openly defends in the name of credible deterrence against Russia.

The Baltic states, despite economies far smaller than Poland's, are following a similar trajectory, convinced that their collective security depends directly on their ability to show an unambiguous willingness to defend themselves against a Russian neighbor whose aggressiveness has never let up since 2022.

Germany, an economic giant with real budgetary room to maneuver

A financial capacity S&P Global explicitly acknowledges

Still according to S&P Global, Germany has more "fiscal headroom" than many of its European neighbors to speed up its own rearmament efforts, an acknowledgment that contrasts with the image long attached to Berlin of an almost dogmatic budgetary caution on public spending.

This room to maneuver, recognized by the ratings agency, doesn't mean Germany has already fully tapped that potential, but it does indicate that the constraints weighing on other European countries, particularly around public debt, weigh less heavily on the continent's largest economy.

A contrast that raises the question of European leadership

This finding raises a deeper political question: if Germany truly has greater fiscal capacity, to what extent should it take on a more assertive leadership role in the collective financing of European defense, beyond its own borders and its own armed forces?

This question is not purely theoretical: it connects to Berlin's recent decisions to directly fund multilateral initiatives supporting Ukraine, a sign that the German government seems, at least partially, to have absorbed this greater responsibility into its own security doctrine.

France, the United Kingdom and Belgium facing their budget constraints

Public debt that limits room to maneuver

In contrast to the German picture, S&P Global places France, the United Kingdom and Belgium among the countries facing "greater debt constraints," a budgetary reality that mechanically complicates their ability to significantly raise defense spending without triggering other painful trade-offs elsewhere in their respective national budgets.

This is nothing entirely new for these three countries, whose public debt levels have been the subject of recurring domestic debate for years, but linking that reality directly to national defense gives it an added strategic dimension, particularly sensitive in the current geopolitical context.

Competing political priorities that complicate the equation

Beyond the sheer financial constraint, S&P Global also cites "competing political priorities" weighing on these countries' ability to speed up their rearmament, a diplomatic phrasing that covers well-known political realities: social tensions, debates over pensions or public health, and a public opinion sometimes less mobilized on defense issues than in the Baltic states or Poland.

This combination of budgetary and political constraints creates a real risk of strategic fragmentation within the Western alliance itself, at a moment when the surface unity displayed at international summits masks increasingly divergent national trajectories.

Southern Europe, the great overlooked corner of accelerated rearmament

A region less directly exposed, but not immune to the consequences

Southern Europe also appears, according to S&P Global, among the regions facing greater constraints in their rearmament efforts. This geographic reality is partly explained by relative distance from the Ukrainian war theater, which makes the Russian threat feel less immediately real to public opinion in countries like Italy, Spain or Greece than in Central and Eastern European countries.

This perception of distance should not, however, obscure a broader strategic reality: a breakdown of collective European deterrence, even one localized in its eastern flank, would inevitably have repercussions across the entire continent, including its less directly exposed southern regions.

More fragile economies that limit military ambitions

Several southern European countries also face structurally more fragile economic situations than their northern neighbors, a reality that objectively limits their ability to devote massive additional resources to defense without weakening other essential public services.

This relative economic fragility poses a major political challenge for the European Union as a whole: how can it guarantee credible collective deterrence if a significant portion of its members structurally cannot keep pace with the military investment of the wealthiest or most directly threatened countries?

What the industrial fragmentation of European defense reveals

A McKinsey report documenting structural inefficiency

Beyond budget spending alone, a McKinsey report published in February revealed an even deeper structural problem: the fragmentation of military platforms in Europe is more than four times higher than in the United States, a finding that reflects decades of national weapons programs run in parallel rather than in continental coordination.

This industrial fragmentation is not a minor technical detail: it generates considerable extra costs, needless duplication of research and development efforts, and a chronic inability to produce military equipment at the industrial scale needed to compete effectively with powers like Russia or China.

A persistent dependence on American suppliers

This fragmentation partly explains why Europe remains heavily dependent on American suppliers for essential strategic capabilities: fighter jets, air defense systems, precision weapons, advanced military electronics and specialized software, not to mention strategic enabling capabilities like intelligence, heavy airlift and command-and-control systems.

This structural dependence, documented by S&P Global, illustrates the concrete limits of the strategic autonomy so often championed by some of the continent's leaders, an autonomy that remains, in practice, largely conditioned on the goodwill and industrial availability of the United States.

Equipment stockpiles still below pre-war levels

A shortfall that persists despite years of increased investment

One of the most troubling findings documented by S&P Global concerns the stockpile levels of military equipment among European NATO members, which remain below levels seen in 2021, that is, before the full-scale Russian invasion of Ukraine even began in 2022.

This persistent shortfall, more than four years into the conflict, shows just how slow and complex rebuilding European military capabilities remains, far slower than regular political announcements about rising national defense budgets would suggest.

A paradox that raises questions about the real effectiveness of announced investments

This paradox between rising budgets and still-insufficient stockpiles raises an essential question: where is the additional money invested in European defense actually going, if strategic stockpile levels still haven't returned to their pre-war levels more than four years after the start of the Ukrainian conflict?

This question deserves a clear political answer from the European governments concerned, rather than simple reassuring communication about overall budget figures that don't necessarily reflect a proportional improvement in concrete military capabilities on the ground.

Defense companies, the first visible winners of rearmament

Credit quality strengthened by a rising order book

On the strictly financial side, S&P Global estimates that rising defense spending could support the credit quality of European companies in the sector, which benefit from an expanding order book and medium-term growth prospects far more favorable than before the war in Ukraine began.

This positive financial dynamic for the European defense industry contrasts with the budgetary difficulties faced by some states themselves, a gap that illustrates the complex macroeconomic balance triggered by this accelerated rearmament race.

Rising pressure on sovereign budgets despite industrial gains

But this boom for defense manufacturers comes, according to S&P Global, alongside increased pressure on sovereign budgets in the countries concerned, which now have to make politically difficult trade-offs between defense, public services and controlling national debt.

These trade-offs, already visible in domestic budget debates across several European countries, could intensify in the coming months if international pressure for higher military spending keeps building as the NATO summit approaches.

The NATO summit in Ankara, a moment of truth for Western unity

A packed agenda for Alliance leaders

The NATO summit set for Turkey is the major political gathering where these rearmament disparities will have to be discussed openly among allies, in a context where Western defense leaders will need to find common ground despite very different national budget realities.

This packed agenda includes, according to several defense analysts, discussions on sharing the financial burden among allies, a recurring topic at NATO summits that takes on a particularly sharp edge in the current context of a prolonged war in Ukraine.

The ambiguous but decisive role of the United States in this equation

The United States, under the Trump administration, keeps demanding a bigger budgetary effort from its European allies, a stance that, on strictly military and strategic grounds, deserves credit: it has undeniably helped accelerate collective European awareness of the need for more robust rearmament against the Russian threat.

This American pressure, however diplomatically uncomfortable it may be for some European allies, has had the merit of turning theoretical discussions about burden-sharing into concrete budgetary commitments, even if those commitments remain, as S&P Global's analysis shows, applied very unevenly from country to country.

The lessons Ukraine draws directly from this uneven rearmament

An urgent need for ammunition that cannot wait on European budget trade-offs

For Ukraine, this uneven rearmament among its European allies is not some theoretical question of budget macroeconomics, but a concrete reality that directly shapes its ability to withstand daily Russian strikes on its territory and energy infrastructure.

Every month of delay in one country's or another's budget decisions can potentially mean delayed deliveries of ammunition and military equipment for Ukrainian forces, a stake that goes far beyond the abstract accounting considerations found in ratings-agency reports.

A Ukrainian dependence that underscores the urgency of Western cohesion

This direct dependence of Ukraine on the speed and coherence of European rearmament shows just how much the disparities documented by S&P Global are not mere abstract statistics, but data with real human and military consequences on the ground, in a country still fighting for its survival against Russian aggression.

It is precisely this human and strategic dimension that should, in my view, speed up awareness among the slower European countries, rather than treating it as just another budget exercise among competing national priorities.

China and Russia are watching these Western fractures closely

A signal of weakness potentially exploited by strategic rivals

It would be naive to think these European rearmament disparities go unnoticed in Moscow or Beijing. On the contrary, these internal fractures within the Western alliance are exactly the kind of signal powers like Russia and China watch closely, looking to identify the weakest links of a coalition they view as their main strategic obstacle.

This geopolitical reality places an added responsibility on European leaders: to never hand, through their own budgetary inaction, extra arguments to adversaries waiting for proof of Western disunity to reinforce their own aggressive posture.

Vigilance also required regarding North Korea and Iran

Beyond the Russia-China pairing alone, North Korea and Iran, both involved to varying degrees in logistical and military support for Russia's war effort against Ukraine, are also watching these European budget dynamics, aware that any Western weakness could eventually indirectly benefit their own regional ambitions.

It is against this wider backdrop of converging threats that the cohesion of Western rearmament takes on its full strategic meaning, well beyond the European framework alone or the current Ukrainian conflict alone.

What the coming months will need to prove concretely

Budget commitments that must translate into actual deliveries

The coming months will serve as a critical test of whether the budget commitments announced by various European countries, including those S&P Global judges to be the slowest, actually translate into concrete orders, equipment deliveries and a measurable rebuilding of still-deficient strategic stockpiles.

This factual verification, case after case, budget after budget, is the only reliable way to tell genuine rearmament acceleration apart from mere political announcements meant to reassure a worried public or allies without binding financial commitment.

The need for stronger industrial coordination among allies

Beyond national budget questions alone, reducing the industrial fragmentation documented by McKinsey is an equally urgent project, one that will require strong political will from European governments to favor joint weapons programs over redundant, strictly national initiatives.

This strengthened industrial coordination, if achieved in coming years, could gradually reduce European dependence on American suppliers, while improving the overall efficiency of defense investments made across the continent.

What this analysis reveals about the credibility of Western deterrence

Deterrence that cannot afford to be a patchwork

The credibility of any military deterrence strategy rests on how coherent it appears to a potential adversary. A patchwork Western deterrence, with heavily armed countries alongside allies structurally slower to rearm, risks sending an ambiguous signal to Moscow about the true collective response capacity of the Atlantic Alliance in the event of major escalation.

This strategic ambiguity, indirectly documented by S&P Global's analysis, is a geopolitical risk Western leaders can no longer afford to ignore, at a moment when the war in Ukraine demonstrates every day the determination and brutality of Russian aggression.

An implicit call for greater intra-European financial solidarity

This situation argues, according to several analysts cited in coverage of this story, for strengthening intra-European financial solidarity mechanisms, capable of helping the most budget-constrained countries speed up their own rearmament without undermining their internal economic and social stability.

Without such reinforced solidarity, the risk of lasting strategic fragmentation across Europe in the face of the Russian threat remains very real, with potentially serious consequences for the continent's collective security as a whole.

The role of financial markets in accelerating rearmament

Investors increasingly focused on the defense sector

Beyond government decisions alone, financial markets have also welcomed the European rearmament dynamic, with a notable rise in investor interest for shares of the continent's major defense groups, a trend documented by several financial analysts cited in CNBC's coverage.

This growing market confidence could, over time, help finance certain defense industrial projects privately, complementing public budget efforts in a sector where capital needs remain considerable given the scale of rearmament required to close the strategic stockpile gaps still documented today.

A bubble risk some analysts are starting to flag

Some financial analysts, however, are beginning to warn of a risk of speculative overvaluation in European defense stocks, fueled by investor enthusiasm sometimes disconnected from the real industrial capacity of the companies involved to actually deliver announced orders on time.

This warning echoes, in a way, S&P Global's broader finding about the persistent gap between ambitious budget announcements and the still-limited industrial reality of European short-term production capacity.

Conclusion: the urgency of a genuine strategic convergence

Real rearmament, still too fragmented to be fully reassuring

S&P Global's analysis confirms something this columnist has observed for years: Europe is genuinely rearming, with considerable financial efforts made by the vast majority of its members, but this dynamic remains too fragmented, too uneven, to be a fully credible and reassuring response to the persistent threat posed by Vladimir Putin's Russia.

This fragmentation, backed by numbers from an agency as rigorous as S&P Global, must not be downplayed as the NATO summit in Turkey approaches, where Western leaders will need to show a collective ability to move beyond their respective national budget constraints.

What history will remember of this pivotal moment in European rearmament

History will judge harshly the European leaders who let national budget constraints override the collective strategic urgency posed by a Russian aggression that shows, to this day, no sign of lasting de-escalation on Ukrainian soil.

This columnist will keep closely following developments in this crucial story, sincerely hoping that Poland and the Baltic states will not remain the only European nations to have fully grasped the historic urgency the continent now faces.

By Maxime Marquette, columnist

Columnist's transparency note

Who I am and my acknowledged biases

I am a columnist, not an economist or a certified expert in sovereign credit ratings. My coverage of this story reflects a deliberate, pro-Western conviction: European rearmament is necessary in the face of the Russian threat, and I judge national efforts against that strategic urgency rather than through cold accounting neutrality.

I take a particular interest in transatlantic defense issues and Western cohesion, which naturally shapes my critical view of countries I consider insufficiently mobilized in the face of this collective urgency.

What I don't know and my method

I don't know with certainty what concrete results will come out of the NATO summit in Turkey, nor whether the countries S&P Global identifies as the slowest will actually accelerate their efforts in the months ahead.

My method consists of cross-referencing S&P Global's financial analysis as reported by CNBC with additional reporting on the context of the NATO summit and European industrial fragmentation, systematically flagging the limits of what these sources allow me to state with certainty about this story's future.

Sources

Primary sources

CNBC — Europe's defense boom faces a new test: Can it actually deliver weapons?, 1er juillet 2026

Anadolu Agency — Factbox: NATO defense spending, where allies stand ahead of Ankara summit, 2026

Secondary sources

El País — With NATO under pressure, Europe undertakes its biggest rearmament since the Cold War, 5 juillet 2026

Reuters — Aerospace & Defense, 2026

Wikipedia — 2026 Ankara NATO summit

Forbes — What defense leaders will discuss at the 2026 NATO summit, 1er juillet 2026