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Western Europe’s defence spending is outstripped by Asia’s and grew more slowly last year, the International Institute for Strategic Studies said on
Tuesday, despite the Russian invasion of Ukraine presenting the biggest
security threat to the region since the second world war.
While European defence spending grew 4.5 per cent in 2023, to reach an average 1.6 per cent of gross domestic product, Asian countries boosted their defence budgets by 4.7 per cent to hit an average 1.8 per cent of GDP, according to IISS’s annual Military Balance global survey.
“There is a lack of urgency in Europe,” said Ben Barry, an IISS senior fellow and former British army brigadier. “The political urgency that needs to be displayed is not being displayed.”
That need for urgency has been underlined recently by several European defence officials who have warned Russia could attack a Nato country within three to five years.
Adding to the concern, former US president Donald Trump, the frontrunner to win the Republican nomination for this year’s election, last weekend said he would allow Russia to attack any Nato member that failed to spend enough on defence.
In the decade following Russia’s initial invasion of Crimea and eastern Ukraine in 2014, military spending by Nato’s European members has grown by almost a third.
Even so, that increased spend is “only fixing long-standing issues” and European defence suffers from some “glaring gaps”, the IISS warned.
Germany, France and Italy — Nato’s biggest spending militaries after the US and the UK — remain below the alliance’s 2 per cent of GDP spending target, although they have set out plans to meet the goal in coming years.
By comparison, Asia’s five biggest militaries after China already spend, on average, 2 per cent on defence, while Japan, which has the region’s third biggest military, has set out plans to almost double its defence budget to 2 per cent by 2027.
Russia, locked into its war with Ukraine, is meanwhile forecast to spend $143bn on defence this year, or almost 8 per cent of GDP, according to the Nato definitions of defence spending used by the IISS.
Fenella McGerty, IISS senior fellow for defence economics, said that after years of under-investment Europe was playing catch-up with Asian defence spending. With economies growing fast, Asian military budgets have typically accounted for between 1.6 per cent and 1.8 per cent of GDP.
Europe has meanwhile increased its defence spending from 1.3 per cent to 1.6 per cent of GDP over the same five-year period.
“Although this is still below the Asian allocation it reveals that [European] countries are implementing stronger [spending on] defence in response to a deterioration in strategic conditions,” she said.
In absolute terms, Asia spent $510bn on defence last year, while Europe spent $388bn.
Globally, defence spending rose 9 per cent last year to a record $2.2tn, with Nato member states accounting for almost 60 per cent of that total, according to IISS. Defence spending by China, Russia and India accounted for almost a fifth of global spending, with the US accounting for just over 40 per cent.
Priorities within defence budgets have also shifted. In 2014, Nato countries spent on average 15 per cent of their defence budgets on equipment procurement and development, while last year they spent more than 30 per cent.
One problem, however, has been to translate that higher spending into greater defence production, especially of ammunition.
“Progress has been slow . . . after decades of under-investment,” the IISS study said, “with costs for some types of ammunition more than doubling”.
North and eastern European countries that are close to Russia have also increased their defence spending faster than southern European countries. On current estimates, Poland’s $37bn defence budget next year will be bigger than Italy’s, even though Italy’s economy is more than twice as big.
Germany will also clearly be the EU’s biggest defence spender, with its $78bn defence budget, which includes pensions, outstripping France’s equivalent $64bn defence budget, according to the IISS.
