REPORT: Germany and Canada lead the spending, Europe finally wakes up

A NATO report confirming a deep-seated trend

On July 7, 2026, NATO published a report that would have seemed unthinkable a decade ago: average defense spending among the Alliance's European countries and Canada now reaches 2.53% of GDP in 2026, up from 2.3% in 2025, while the United States stands at 3.17%. These figures, presented on the sidelines of the Ankara summit, confirm a continuous rearmament trajectory that has accelerated since the start of the Russian aggression against Ukraine in 2022.

This report examines what these figures mean concretely, beyond the abstract percentages circulating in official communiqués. A rise of 0.23 percentage points in a single year, across dozens of countries and hundreds of billions of dollars in combined GDP, represents billions of additional dollars invested in concrete military capabilities — tanks, ammunition, drones, air defense systems — at a time when the Russian threat remains very real on Europe's eastern borders.

Germany and Canada, new engines of rearmament

Among the countries pulling this average upward, Germany and Canada stand out particularly, according to the data presented in Ankara. This finding marks a notable shift for two countries long criticized, notably by successive American administrations, for their historical reluctance to devote a sufficient share of their national wealth to the Alliance's collective defense.

This report documents that shift through available figures, without claiming to cover every national budget detail beyond what NATO has made public. The scale of the change remains significant enough, however, to deserve being told in detail, country by country, decision by decision.

I long heard it said that Germany would never change its postwar pacifist budget culture. The Ankara figures suggest otherwise. It took a war on Europe's doorstep to trigger this awakening, but that awakening, today, appears very real.

Continuous progress since 2022

The rise from 2.3% to 2.53% of GDP between 2025 and 2026 is not an isolated jump but the continuation of a trajectory launched at the start of Russia's full-scale invasion of Ukraine. Before 2022, a majority of European NATO countries struggled to reach the Alliance's symbolic target of 2% of GDP, set at the 2014 Wales summit, a target long treated as an aspiration rather than a binding obligation.

The collective breach of this 2% threshold, confirmed and amplified by the 2026 figures, marks a change in kind as much as in degree. It is no longer a target some countries painfully reach while others fall short: it is now an average exceeded by the entire European and Canadian bloc of the Alliance, a signal of structural transformation rather than temporary adjustment.

The transatlantic gap that persists nonetheless

Despite this notable progress, the gap with the United States, at 3.17% of GDP, remains substantial. This gap of more than 0.6 percentage points represents, across the economies concerned, tens of billions of dollars in relative defense effort. It is a reminder that, despite real progress by Europe and Canada, burden-sharing within NATO is still far from balanced.

This persistent gap has for years fueled American criticism, notably under the Trump administration, which has made fair defense burden-sharing a recurring theme of its foreign policy toward European allies. The 2026 figures, while encouraging for Brussels and Ottawa, will likely not be enough to fully silence this ongoing transatlantic criticism.

It would be easy to celebrate these figures as a complete victory. That would be premature. A gap of more than 0.6 percentage points with the United States remains a real gap, and Washington will not fail to remind its European partners of it at the next summit.

A cultural shift as much as a budgetary one

Germany long embodied, in the European strategic imagination, budgetary restraint on defense, a direct legacy of its historical memory and postwar political culture marked by institutional pacifism. That this country now ranks among the drivers of European rearmament documented in NATO's July 2026 report marks a shift whose significance goes beyond mere accounting.

This German shift fits into a sequence launched in the early months of Russia's invasion of Ukraine in 2022, when the chancellor of the time announced a historic turning point in German defense policy, promising massive investment to modernize a long-underequipped federal army. The 2026 figures suggest that promise has, over time, translated into a concrete, measurable budgetary commitment.

The industrial consequences of this shift

Beyond the percentages, this German rearmament has concrete industrial consequences for all of Europe. Germany has a substantial defense industrial base, capable of producing equipment at scale if budgets keep pace. This increased production capacity could, in time, directly benefit military support efforts for Ukraine, at a moment when Western production capacity sometimes remains insufficient against front-line needs.

This report notes a necessary nuance, however: increased defense spending does not instantly translate into an equivalent increase in equipment deliveries to Ukraine, as the two budget files remain distinct in most European government structures, including Germany's.

Berlin took decades to come to terms with the idea that a militarily strong Germany is not a threat to Europe, but an added guarantee of its collective security. This shift in mindset, even more than the figures themselves, deserves to be highlighted as a generational turning point.

Allied pressure that finally paid off

Canada, like Germany, has long faced repeated criticism from its NATO partners, notably successive American administrations, for defense spending considered insufficient relative to its economic size and historical role within the Alliance. Its documented progress in the July 2026 report thus marks a significant catch-up, however late in the eyes of some critical observers.

This Canadian catch-up is partly explained by accelerated geopolitical awareness triggered by the war in Ukraine, but also by continued pressure from Washington on all North American and European members of the Alliance to honor their collective financial commitments. Ottawa appears to have responded to this pressure more decisively than in previous decades.

What Canada concretely contributes to the collective effort

The increase in Canadian defense spending is not limited to a symbolic gesture meant to appease American criticism. It corresponds to investments in concrete military capabilities, potentially including increased contributions to NATO missions in Eastern Europe, where the Canadian presence alongside Baltic and Polish forces has for years been a tangible element of Western deterrence against Russia.

This Canadian budgetary catch-up also fits into the continuity of the steady support Ottawa has provided to Ukraine since 2022, both militarily and financially and humanitarily, a commitment the new defense spending figures reinforce rather than contradict.

Canada is often criticized for its slowness on military spending. The 2026 figures deserve to be recognized as a real course correction, even though there is still ground to cover before reaching parity with the American effort.

A geographic urgency dictating budget priorities

While Germany and Canada dominate the headlines of this report because of the scale of their progress, this report must also note that several Baltic and Nordic countries, due to their direct geographic proximity to Russia, have for several years already devoted shares of their GDP to defense that far exceed the 2.53% average announced for the entire European and Canadian bloc of NATO.

These countries, among which Estonia ranks as one of the most documented examples, anticipated long ago the need for a sustained defense effort, aware that their national security directly depends on the credibility of the Atlantic Alliance's collective deterrence against a neighbor whose expansionist intentions were confirmed by the invasion of Ukraine in 2022.

A model gradually inspiring the rest of the Alliance

The budgetary trajectory of these Baltic and Nordic countries, ahead of the Alliance average for years, now serves as an implicit model for countries catching up, such as Germany and Canada. This convergence phenomenon toward a higher budgetary standard illustrates a collective dynamic that goes beyond mere statements of intent from successive NATO summits.

This report notes that this convergence, however encouraging, remains uneven: some countries on the Alliance's southern flank remain behind this rearmament dynamic, a geographic imbalance that continues to generate internal tensions within the Organization, as illustrated by the friction reported around Spain at the Ankara summit.

The Baltic states never had the luxury of treating defense as a secondary budget line. Their example, now followed by giants like Germany, proves that geographic clear-sightedness sometimes eventually overcomes political inertia, even if it takes far too many years.

Tensions surfacing despite the collective average

The NATO report presented in Ankara documents a rising collective average, but this report must also account for the persistent tensions accompanying this dynamic, particularly around Spain. Friction reported at the summit between certain Western leaders, including Donald Trump, and Madrid over Spanish budget commitments shows that convergence toward a higher spending standard remains uneven within the Alliance.

These tensions do not call into question the validity of the overall figures presented by NATO, but they remind us that a statistical average can mask significant gaps between contributing countries. Spain, like other members of the Alliance's southern flank, has historically devoted a smaller share of its GDP to defense than Baltic or Nordic countries, a situation that continues to draw repeated criticism from partners more directly exposed to the Russian threat.

Why this geographic disparity complicates the Alliance's cohesion

The disparity between NATO's southern and eastern flank countries is not a simple accounting disagreement. It reflects different perceptions of the security urgency posed by Russia, perceptions that logically vary with each country's geographic proximity to the direct threat. A country like Spain, far from Russia's borders, may legitimately view other national budget priorities as more urgent than those felt by Estonia or Poland.

This divergence in perception, documented for years in the Alliance's internal debates, complicates the search for a uniform budgetary consensus, even amid the widespread rearmament confirmed by the 2026 figures. This report notes that this tension will need to be resolved, one way or another, for NATO's cohesion to remain credible against adversaries who, for their part, closely coordinate their own military efforts.

It is easy, from Madrid, to view the Russian threat as distant. It is not distant for Estonia, Poland, or Finland. This difference in geographic perspective does not excuse prolonged budgetary disengagement by countries that, too, benefit from the collective Article 5 guarantee.

An indirect but real link to support capacity for Kyiv

Although this NATO report covers overall defense spending and not specifically military aid to Ukraine, this report draws a logical link between the two files: higher national defense budgets, in principle, expand the financial room to maneuver available to support Kyiv, without having to sacrifice each contributing country's own national defense capabilities.

This increase in national budgets potentially reduces internal tensions that have sometimes emerged, in several European capitals, between advocates of increased support for Ukraine and those worried about the impact of this aid on immediate national defense capabilities. Larger budgets allow, in theory, both priorities to be addressed simultaneously.

A vigilance that must remain constant

This report, however, is careful not to conclude too hastily that these budget figures will automatically translate into a proportional increase in direct support for Ukraine. The precise allocation of these national budgets rests on separate political decisions, made capital by capital, which are not systematically documented with the same transparency as the overall percentages presented by NATO.

What remains certain, documented by the figures themselves, is that the Alliance's collective budgetary trajectory continues to move toward more substantial Western rearmament, an underlying trend that, regardless of its precise allocation, structurally strengthens NATO's position against the converging threats posed by Russia, China, Iran, and North Korea.

I remain cautious about percentages alone. A rising defense budget never automatically guarantees more ammunition for the Ukrainian army. But it creates the material conditions that make this support more sustainable over time, and that alone is news that matters.

Budgetary leadership weighing on American domestic politics

With 3.17% of GDP devoted to defense in 2026, the United States remains by far NATO's largest contributor as a share of national wealth. This spending level, sustained over time despite recurring domestic political debates in Washington over federal budget priorities, illustrates the central place collective defense continues to occupy in American foreign policy, regardless of changes in administration.

This report notes, however, that this American budgetary leadership is not without internal tensions within the United States, where certain political currents, including within the Trump administration itself, regularly question the level of American financial commitment toward allies deemed insufficiently contributing. It is precisely this pressure that, according to several analysts, has accelerated the budgetary catch-up seen among countries like Germany and Canada in recent years.

An incomplete but underway transatlantic rebalancing

The European and Canadian progress documented by the NATO report, while still insufficient to reach parity with the United States, represents the beginning of a transatlantic rebalancing Washington has demanded for decades, under administrations of very different political leanings. This gradual rebalancing could, in time, reduce recurring tensions among allies over sharing the collective defense's financial burden.

This report closes this section with a cautious observation: the rebalancing now underway remains fragile and dependent on the persistence of the perceived threat. Should Russian pressure diminish, nothing guarantees this upward budgetary trajectory would hold with the same strength in the years ahead, a risk NATO planners must already anticipate.

The day Europe stops perceiving Russia as an existential threat, these defense budgets will probably fall again, as they always have after every past crisis. That is why vigilance must never ease, even when the numbers finally seem to be heading in the right direction.

What the NATO report confirms unambiguously

The report published by NATO on July 7, 2026, presented on the sidelines of the Ankara summit, unambiguously confirms a continuous rearmament trajectory among the Alliance's European countries and Canada, with average defense spending now reaching 2.53% of GDP, up from 2.3% a year earlier. Germany and Canada rank among the most dynamic contributors to this progress, a notable reversal for two countries long criticized for their lagging commitment to collective defense.

This report has documented the nuances necessary for an honest reading of these figures: a persistent gap with the United States, at 3.17% of GDP, internal disparities between Baltic countries ahead of the curve and southern flank countries still lagging, and the absence of an automatic, guaranteed link between rising national budgets and a proportional increase in direct support for Ukraine.

A signal of resolve Moscow cannot ignore

Beyond technical nuances, this report sends a political signal whose reach extends beyond mere statistical tables: the West, far from succumbing to the fatigue sometimes announced by pessimistic analysts, continues to structurally strengthen its collective defense capabilities against a backdrop of multiple, persistent threats, of which Russia remains the most immediate and best documented since 2022.

This report therefore closes on a measured but significant observation: the figures presented in Ankara do not resolve every internal imbalance within the Alliance, but they confirm a real rearmament dynamic, sufficiently documented to warrant close attention in NATO's upcoming reports.

I close this report with one figure in mind: 2.53%. Three years ago, no one would have believed such an average possible for Europe and Canada combined. It is still not enough against Russia, but it is proof that a sufficiently brutal shock can wake up even the sleepiest budgets.

By Maxime Marquette, columnist

Editorial stance

I am not a journalist but a columnist and analyst. My expertise lies in observing and analysing the geopolitical, economic and strategic dynamics that shape our world. My work is to take political strategies apart, to understand global economic movements, to put the decisions of international actors in context and to offer analytical perspectives on the changes that are redefining our societies.

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