The European Defence Agency (EDA) revealed, on Thursday 8 December, that in 2021, total European defence spending reached €214 billion, marking a further 6% increase over 2020 and the seventh consecutive year of growth.
By comparison, in 2021, the US spent €686 billion, China €241 billion and Russia €56 billion.
In its report published on Thursday, the EDA states that the defence expenditure of the 26 Member States party to the Agency (the EU Member States excluding Denmark) corresponds to 1.5% of their GDP, the same level as in 2020. The target for NATO members is to reach 2% by 2024.
Compared to the low point in 2014, defence spending has increased by almost €52 billion, or 32% in real terms, the agency says.
Furthermore, of the 18 Member States that have increased their defence spending in 2021, six have done so by at least 10%. While the report does not specify the names of the countries, according to the EDA press release, the largest increases amount to more than €4 billion for Italy in absolute terms and 42, 33 and 27% in relative terms for Finland, Greece and Slovenia respectively. Eight Member States reduced their expenditure, the largest reduction being 15% in relative terms.
Of the €52 billion spent on defence investment, 82% (€43 billion) was used for equipment procurement and 18% (€9 billion) for research and development. “One out of four euros goes to new capabilities”, explained the High Representative of the Union for Foreign Affairs and Security Policy Josep Borrell, at the EDA’s annual conference in Brussels.
Member States continued to meet the 20% defence investment threshold for the third year in a row, reaching a record level of 24%. Individually, 19 states reached 20%, five more than last year.
In 2021, defence research and technology (R&T) expenditure amounted to €3.6 billion, an increase of 41% compared to 2020. But this spending is uneven across Member States: While 13 increased, 12 decreased and one remained unchanged. With 3.7% of total R&T expenditure, Germany is the country with the highest R&T expenditure of the 26 Member States.
Doing more together
Beyond larger expenditures, the High Representative has repeatedly called for concerted spending.
In this respect, more needs to be done. For example, spending on European collaborative defence procurement projects reached a record high of €7.9 billion, almost double the €4.1 billion recorded in 2020. This represents 18% of total defence procurement (compared to 11% in 2020), still far from the commitment made in the framework of Permanent Structured Cooperation (PESCO) of 35%. An estimated €15.1 billion is needed to make up the difference.
In 2021, Member States spent €248 million on defence R&T projects in cooperation with other EU states, barely 7% of total R&T spending, far from the collective benchmark of 20%.
Doing even better
At the conference, the High Representative called for more to be done. He recalled that the war in Ukraine had made Member States aware that their stocks were low. “We lack essential defence capabilities” he said, adding that years of under-investment needed to be made up for.
“The total (defence) expenditure that member states have announced will grow by €70 billion until 2025”, Mr Borrell stressed, adding that it would be a challenge to spend this money, let alone do it in a coordinated way. “If our national decisions are only focusing on the present needs [...] then it would be, again, a fragmented European Union capability landscape”, he warned.
See the EDA report: https://aeur.eu/f/4jz (Original version in French by Camille-Cerise Gessant)