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European Defence Spending: Turning a Corner?

NATO Secretary General Jens Stoltenberg issued his Annual Report this week, including the most recent figures for the Allies’ defence expenditure.

Although in 2016 only four European Allies (Greece, Estonia, Poland, UK) met the agreed target of spending 2% of GDP on defence, the overall picture of Europe’s defence spending is more encouraging. In real terms (constant 2010 prices and exchange rates), all but four of the European Allies increased their defence expenditures between 2015 and 2016. Latvia and Lithuania have increased their defence spending by an extraordinary 42% and 34% respectively, while Hungary, Italy and Slovenia have also seen percentage increases in the double digits. Poland, one of the four European Allies to have reduced their defence spending in 2016, has done so only after several years of sustained year-on-year growth. Overall, NATO Europe’s defence spending has increased by 3.6%.

This is the second year running that more European Allies have increased their defence expenditure than have reduced it, and the second year running that NATO Europe has increased its spending overall. The pattern of year-on-year changes in the period covered by the data in the Secretary General’s report, does suggest that Europeans have begun to wake up to the need to spend more on their defence.

The animation also indicates that the eastern Allies have tended to be more serious about increasing their defence expenditure. Whether they are making efforts to catch up with their western counterparts or simply feeling more vulnerable, this pattern is especially evident when percentage changes are considered over the whole period.

This somewhat bleaker picture shows that only ten of the European Allies have seen their defence expenditure grow overall between 2009 and 2017.1 If Europe’s defence spending has indeed turned a corner, the continent is still only at the start of a long journey back to credible defence capability.

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1 US defence spending fell by 21.3% over the same period.

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