The world is changing rapidly, and those who have long measured a country’s strength by its economic growth, innovation, and citizens’ well-being are about to face a new reality. The share of military expenditures in the GDP of European Union countries is set to rise, bringing Europe back to an era where security was defined not by investments in education or the green economy but by the number of tanks, aircraft, and soldiers.
Europe’s strength, its appeal as the cradle of the Western world, and the foundation of its influence have traditionally been built on a system of moral values, a long history of legal institutions, and cultural development. When it comes to military power, the continent’s position has shifted drastically compared to a few decades ago.
Today, both politicians and society at large find themselves surprised by the new state of international relations, where soft power alone is no longer enough to secure a seat at the negotiating table. Reality is once again proving that brute force remains a defining factor in shaping the world we live in.
During World War II, Soviet leader Joseph Stalin reportedly responded to a remark about considering the Vatican’s opinion with a now-famous rhetorical question: “How many divisions does the Pope have?” Nearly eight decades later, the world is once again heading toward a situation where the power of negotiating parties is increasingly defined by military strength.
Not long ago, globalization and the single market appeared to have triumphed. The world was structured around economic efficiency, and a nation’s development was measured primarily by GDP, productivity, and competitiveness. However, since 2022, this model has started to unravel. Recent events have shown definitively that the very concept of state power is undergoing a dramatic transformation.
Today, both economic and military indicators are becoming equally relevant. It is not just about modernizing the armed forces but about a radical shift in budget priorities—toward defense. Even those EU countries that have long prided themselves on their “soft power” and minimal defense spending are now preparing to reassess their strategies.
This shift is part of a broader trend that philosophers and sociologists are already discussing: the world is entering an era of “post-ideology”—a time when ideological narratives, once well understood, are now being reshaped by reality. Much like the era of Trump’s “post-truth” politics, international relations are increasingly driven by force, pragmatism, and transactional deals rather than democratic ideals and human rights. This shift has direct implications for how governments allocate resources.
Russia goes into a military spending frenzy among warnings that it’s preparing for a new war in Europe
According to the latest military balance report from the International Institute for Strategic Studies (IISS), published in February, Russia’s military spending is growing so rapidly that it now surpasses the combined defense budgets of all European countries—despite their efforts to increase military allocations and rearm.
The IISS report states that in the past year, Russia’s military expenditures were projected at 13.1 trillion rubles ($145.9 billion at exchange rates) or 6.7% of the country’s GDP, a staggering 40% increase compared to the previous year.
Meanwhile, Europe’s total defense spending in 2024 is expected to reach $457 billion—a 50% increase in nominal terms compared to 2014 and 11.7% higher in real terms than the previous year.
However, if Russia’s expenditures are calculated using purchasing power parity (PPP)—which accounts for significantly lower domestic costs in Russia compared to the global market—then Moscow’s real military budget amounts to $461.6 billion, according to IISS.
The fact that Russia has outspent all of Europe combined marks a new geopolitical reality for the continent. Behind this surge in defense spending is a militarization of the Russian economy, where the defense industry is expanding even under sweeping Western sanctions.
Currently, with Russia focused on Ukraine, this military buildup has heightened fears across Europe that Moscow could turn its sights on the continent once the war in Ukraine concludes. NATO Secretary-General Mark Rutte has warned that Europe is still far from ready to counter such a threat: “We are not prepared for what’s coming in the next four to five years.” This sentiment is particularly strong among countries bordering Russia and Belarus—especially the Baltic states and Poland.
Intelligence from EU nations indicates that Russia may be preparing for large-scale war in Europe within the next five years. This growing threat is compelling Europe to dramatically increase its defense spending.
At the same time, Russia’s military expenditures have skyrocketed since the full-scale invasion of Ukraine, with a further 14% increase expected this year—bringing the total to 15.6 trillion rubles.
The war has transformed Russia’s economy, consolidating its defense sector to boost production in key areas like ammunition and artillery systems. Furthermore, Russia’s military-industrial complex has become deeply integrated into the broader economy, with even private companies playing an increasing role in war production.
Faced with Russia’s military built up and uncertainties about the US support, the Europeans are forced to act
Meanwhile, NATO and Europe continue to allocate significant sums to security, but the U.S. still plays the dominant role in the alliance’s defense budget. There is growing concern in Europe that Russia’s expanding military-industrial capacity could be turned against the EU, and that without U.S. support, the continent’s own defense efforts may prove insufficient. As a result, countries closer to Russia’s borders are leading the push for increased military spending.
Last year, 24 out of 32 NATO members met the alliance’s target of spending at least 2% of GDP on defense. However, U.S. President Donald Trump has long demanded that NATO nations increase this to 5%. But among the 23 EU member states that are also NATO members, defense spending is expected to rise to 2.04% by 2025.
Despite the 30% increase in EU defense spending between 2021 and 2024, the current levels still fall short of expectations from the incoming U.S. administration. In 2024, European military expenditures reached €326 billion—about 2% of the EU’s GDP. However, forecasts suggest that by 2027, defense spending will rise by another €100 billion in real terms. Yet even then, in relation to the overall economy, this might still be insufficient to meet Trump’s demands.
However, focusing solely on defense spending as a percentage of GDP presents an oversimplified picture. It fails to account for actual military capabilities, strategic investments, and spending efficiency.
A significant portion of Europe’s defense budgets is directed toward defense investments. In 2023, over 80% of these investments (€61 billion) went toward purchasing new military equipment. This trend has continued into 2024, with defense procurement surpassing €90 billion, reflecting an 88.2% share of total defense investments and a year-on-year growth of over 50%.
Yet, despite these investments, a large share of the EU’s defense budget is spent on imported military equipment, highlighting the urgent need to strengthen Europe’s domestic defense industry. Even with sufficient funding, the EU still faces serious limitations in expanding its own defense production.
While European nations are ramping up their defense efforts, concerns remain that these measures may still not be enough. Meanwhile, Russia continues its aggressive military buildup, and with the U.S. security commitments in question, Europe may soon have to fend for itself—for the first time since World War II.
For millennials, who grew up during the “long peace” and saw the EU as a symbol of prosperity without military might, this shift represents a stark new reality. Yet they may soon witness—and even participate in—a historic transformation, where the EU is forced to become not just an economic, but also a military power.
