In the past months, we have been observing intensified arms procurement in Poland. War in Ukraine made that in many other NATO states the number of defense investments have also increased.

The world geopolitical situation has worsened in the recent years. In Europe, Russia’s aggression against Ukraine in the first months of 2022 was a turning point. Many western countries however did not see this event as an impulse to wake up from a lethargy, in which they fell in time of apparent peace after the end of the Cold War. For years individual states never reacted to repetitive calls of NATO to increase their defense expenses, the minimum level of which – at least 2% of Gross Domestic Product (GDP) – was recommended as early as in 2006, which was later confirmed during the following NATO summits, including the Warsaw Summit in 2016.

Officially, all NATO members continued to agree that expenses on defense should be increased, but even after the conflict in western Ukraine started, only some of them decided to actually reach the recommended level. As a result, in 2022 barely nine out of 30 NATO members is spending on defense at least 2% of their GDP.

Not Only Russia

Such attitude towards defense spending was to a large extent influenced by the feeling of security in individual countries. For that reason, among the above-mentioned nine countries, as many as six of them are those members who joined NATO after the Cold War ended. Five of them are located on the territory of NATO’s eastern flank much threatened by aggressive politics of Russia. The highest level of defense expenditure this year – 2.42% of GDP – will be reached by Poland. Estonia, Lithuania, Latvia and Slovakia will spend at least 2% of their GDP on defense. The sixth new member spending a lot on defense is Croatia, which is located in still not very politically stable western Balkans, and attempts to keep parity with Serbia in terms of military capabilities.

Traditionally, the United States of America spend a lot on defense. They have to, in order to keep their status of global power against the challenges posed by China and Russia. In Western Europe, the only large state in NATO, which regularly spends on defense 2% of GDP, is Great Britain. This country needs a strong army not only to defend its territory, but also to keep their influences in different regions of the world where it has political, military and economic interests. What is more, after Brexit, Great Britain – keeping its allied obligations within NATO – decided to increase military activity, i.e. on the Indo-Pacific territory, the sign of which is AUKUS security pact, which brought the tightening of political and military cooperation between Great Britain and the USA and Australia.

Still however, an absolute leader in NATO, if it comes to defense expenditure, is Greece, which this year devoted as much as 3.76% of its GDP. Greece tried to maintain defense savings even in the time of its financial crisis, and defense spending rapidly grew after 2019, because of more tensions in the relations with Greece’s historical rival, and at the same time also a NATO member – Turkey. Turkey, in turn, is the example of reverse tendency. Economic problems made Turkish defense expenses fall.

Additional Billions

Aggression of Russia on Ukraine in February 2022 provoked the situation where other countries joined in to increase their defense spending. In Germany for years the military budget was the subject for fierce political debates. Almost every serious purchase of armament or military equipment was contested by some of the politicians. Such was the case with selecting a replacement for the Tornado fighter bombers, which are to be withdrawn from service in the years of 2025–2030.

Now the situation has changed. German politicians are mostly unanimous about the fact that Bundeswehr requires serious investments to regain its combat capabilities. Already on February 27, 2022, three days after the outbreak of war in the east of Europe, German Chancellor Olaf Scholz announced the establishment of special fund of 100 billion euro, which before had been put away for years.

The greatest beneficiary of the special fund will be, as defined in the document on The Projects of Bundeswehr Special Assets 2022, the “air dimension,” covering both, aircraft in all branches of the armed forces and the ground systems of anti-aircraft, missile and anti-drone defense systems. The budget assumed for the above is 40.9 billion euro. One of the first moves of the German government was requesting the United States of America to sell them 35 F-35 Lightning machines. The tender for 60 new heavy transport helicopters was also completed. Germany decided on CH-47F Chinooks offered by Boeing, where they order another maritime patrol aircraft – P-8 Poseidon. At the same time, in order to compose a domestic aviation industry, it was announced that funds for the continuation of the Eurofighter Typhoon program, i.e. development and purchase of 15 fighters for electronic and surveillance warfare, were initiated. Additionally, a budget for the new-generation fighter, which is now being developed by Germany in cooperation with France and Spain, was also planned.

Germany plans to invest in strengthening of missile defense. Right after the Russian-Ukrainian war broke out, there appeared information that Berlin was interested in Israeli Arrow 3 system. American options are also in play: THAAD or Aegis. Extremely high on the modernization priority list for Bundeswehr are communication, command and control systems, on which about 20.7 billion euros is to be spent. Slightly less – 19.3 billion euros, will be consumed by the maritime programs, while here the focus is mainly on increasing the volume of the ships already under construction. For the modernization of the land forces, Germany will assign 16.6 million euros. Part of this amount will be assigned to the projects of the followers of the Marder infantry fighting vehicle (IFV) and Fuchs armored personnel carrier (APC). Funds for completing modernization of the Puma IFV and the project of the main battle tank of new generation, which is already being developed in cooperation with France, are also being considered.

War Economy Mode

The money from a special fund will be invested in Bundeswehr modernization programs in the years of 2023–2027. German Chancellor Olaf Scholz has announced that Germany would increase their defense spending to 2% of GDP, but in time of the fund existence, the defense budget shall not significantly increase, and remain at the level of 50 billion euros a year. Also, no specific declarations have been made as to the defense budget amount after 2027.

More clarity in this question can be observed with the closest European Germany’s ally – France, which managed to reach the ceiling of defense expenditure at the level of 2% of GDP in 2020, however followed by the fall. The Paris government did not decide to assign additional funds on defense in 2022 (this year’s budget includes 40.9 billion euros). Still, on July 7, Sébastien Lecornu, Minister of the Armed Forces, announced that future budget should be increased by three billion euros, and current one increased by 1.7 billion euros compared to the year of 2021. He also said that additional funds will be needed to, among other things, replenish the ammunition and equipment, which had been delivered to Ukraine.

France also thinks necessary to procure additional Rafale in order to keep the potential of combat aviation, because a certain number of older-variant machines belonging to the French Air Force have been in recent years sold to Greece and Croatia. For the land forces, the Scorpio program remains a priority, as it covers deliveries of the Griffon, Serval and Jaguar APCs as well as modernization of Leclerc MBTs. Minister Lecornu indicated also the remaining investment priorities such as cosmic space technology, cybernetic defense, and unmanned systems, which is the result of the first experience of the war in Ukraine.

Therefore, President of France Emmanuel Macron requested the Ministry of the Armed Forces to adjust to a new geopolitical situation the six-year defense expenditure plan, known as the act on military programming for 2019–2025. At the conference in June, during Eurosatory exhibition in Paris, the President stated that his country entered the war economy mode, and added that such a situation would last for a long time.

A similar process of increasing expenses for defense is taking place in Italy. This year, 18 billion euros was assigned to the defense ministry, which is 1.2 billion euros more than a year ago. While, progressively, because as much as 34%, the funds was anticipated for the purchase (from 4 billion euros to 5.42 billion euros). The expenditure of the defense ministry does not give a full picture of a situation, as additional funds from the ministry to defense industry should be kept in mind – which this year amounts to 2.43 billion euros. This form of support of this sector at the same time improves defense capabilities of Italy.

After the outbreak of the Russian-Ukrainian conflict, the defense minister Lorenzo Guerini, claimed that priority is the preparation for conventional combat activity. Hence, in the land forces an important program is the choice of the follower of the Dardo BWP. This year, the cost was estimated for 3.74 billion euros. In aviation, the programs related to Eurofighter and F-35 fighters will continue. The Italians will also increase their financial input in the program of the Tempest new-generation combat aircraft, implemented with Great Britain, Sweden and Japan.

Despite the increase in defense expenses, Italy will reach the NATO-recommended level of 2% of GDP as late as in 2028. The agreement in this matter was reached in parliament in March 2022. Spain will take even more time, since it will assign the same amount to its defense industry only in 2029. For Spain, it will be a great challenge, which means the necessity of doubling the defense budget, which currently constitutes only about 1%PKB. Spain is however at the end of the list, because one of the wealthiest NATO members – Luxembourg – assigns for defense less than 0.6% of GDP, and plans to increase this amount to 1%, although it will be reached as late as in 2028.

Poland in the Lead

After the Russian aggression on Ukraine started, two more Western European NATO members decided to raise their defense budget – Belgium (2% of GDP in 2030) and Norway with Sweden applying for membership. The eastern members likewise seriously approach investing in their security. Our southeastern neighbor, Slovakia, since 2014, when the Russian-Ukrainian conflict started, increased their defense budget by over 100%. Such equipment as the F-16 fighter division, UH-60 helicopters and new gun-howitzers were ordered for delivery of new infantry fighting vehicle. In Poland, after the open Russian aggression on Ukraine, the expenditure on defense was statutorily increased up to 3% of GDP in 2023. Lithuania also decided to do the same (2.52% in 2022), as well as Latvia (up to 2.5% of GDP in 2025) and Romania (2.5%of GDP from 2023).

War in the east of Europe encouraged many NATO countries to raise their defense funds. For that reason, as NATO secretary General Jens Stoltenberg informed at the Madrid NATO Summit, 19 out of 28 European members of the Alliance by 2024 will be assigning 2% of their GDP to defense expenses. It is however still hard to talk about a full success, because some of the states will only be able to reach the indicated level in 2030 or even later. For economic reasons, not all of them can afford the rapid increase of expenses. What matters is also sometimes the lack of social support for such investments, which must be considered by politicians. However, the decisions already taken clearly indicate that the countries which fulfill the NATO’s minimum level of defense budget will include all eastern-flank states, the leader of which is and will be Poland.

Surely, due to the situation in the region, Greece and west Balkan NATO members will also buy new arms. However, a tendency to increase the defense budget is also observed in West Europe, but time will show whether it will last, as it depends on many unknown today factors. The example of the recent years is the COVID-19 pandemic, which started in 2020, and evoked economic problems in many countries. In some situations, they meant freezing or lowering defense expenses. On the other hand, yearly increases stemming from the need to pay for large arms orders may occur, as it happened in 2019 in Bulgaria with the F-16 purchase. Still, however, a key factor deciding whether or not the Europeans will have to arm will be the course of the Russian-Ukrainian conflict and the next political and military steps taken by the Kremlin regime.