European nations are dramatically increasing investment in defence research and development (R&D) as a direct response to geopolitical instability, particularly Russia’s invasion of Ukraine. Over the last five years, EU spending on defence R&D has more than doubled, rising from €9 billion in 2020 to a projected €17 billion in 2025, according to the European Defence Agency (EDA).
The Driving Force Behind the Increase
The surge in spending isn’t just a recent trend. While defence investment was already rising, the war in Ukraine served as a major catalyst, prompting nations to prioritize military innovation and modernization. Experts predict this trend will continue, especially with NATO pushing members toward a 3.5% GDP target for defence spending.
Which Countries Lead the Way?
France and Germany dominate EU defence R&D spending, accounting for roughly 74% of the total in 2023. France invested €1.6 billion, followed closely by Germany at €1.4 billion, for a combined €3.014 billion.
Spain ranks third with €378 million, representing 9.3% of the EU total. The Netherlands and Sweden complete the top five, spending €200 million and €176 million respectively, combining for another 9.2% of the EU total. Notably, Italy, despite being one of Europe’s largest economies, ranks seventh with only €73 million in defence R&D spending.
Discrepancies in Data and Spending Priorities
Data from Eurostat shows lower figures than those reported by the EDA due to differing methodologies. However, even Eurostat confirms a more than 25% increase in defence R&D spending between 2018 and 2023.
The difference highlights that national priorities vary significantly. France and Germany prioritize R&D more heavily than other EU members, with their large education systems and public funding supporting robust innovation ecosystems. Some countries, like Italy and Spain, allocate a larger share of their defence budgets to personnel costs rather than R&D.
Uneven Distribution Across the EU
The concentration of defence R&D is highly uneven. Six EU countries report zero spending, and another six spend less than €10 million. Much of Europe’s most advanced defence industry is clustered in six core nations: France, Germany, the United Kingdom, Italy, Spain, and Sweden. This concentration means R&D activities predominantly originate from these states.
Overall Defence Spending Trends
Total defence expenditure by the 27 EU Member States reached €343 billion in 2024, a 19% increase from 2023, now representing 1.9% of the EU’s GDP. In 2023, EU countries spent €227 billion on defence, or 1.3% of GDP.
The EDA emphasizes that this surge in spending, coupled with limited collaborative projects, presents a “unique opportunity to fully exploit opportunities for collaboration, make use of EU funding possibilities, and improve the efficiency of spending and the interoperability of weapon systems across European countries.”
The current trajectory underscores a fundamental shift in European defence priorities, driven by geopolitical realities and a growing recognition of the need for independent military capabilities.
