European countries are spending more on defence, a think tank says

That’s the conclusion of a report released by the International Institute for Strategic Studies as it opened a three-day gathering in the Czech capital to discuss European and transatlantic military capabilities.

“NATO has not just significantly increased its ambitions regarding its deterrence and war-fighting posture, but European members have sought to address critical capability and readiness shortfalls,” the report said.

“Unsurprisingly, however, after decades of neglect and underinvestment, much remains to be done and progress has been mixed."

It was released as European leaders, including NATO Secretary-General Mark Rutte, were reassessing their trans-Atlantic relations in Budapest, Hungary in the hope that Donald Trump’s second US presidency will avoid the strife of his first administration and maintain a strong common stance on Russia.

During his election campaign, Trump threatened actions that could have groundbreaking consequences for nations across Europe, from a trade war with the EU to a withdrawal of NATO commitments and a fundamental shift of support for Ukraine in its war with Russia.

During his first 2017-2021 term, Trump pushed NATO's European members to spend more on defence, up to and beyond 2% of gross domestic product, and to be less reliant on US military cover.

In that respect, some progress has been made, with 2024 defence spending by NATO’s European members states 50% higher than it was 10 years ago, the report said.

But problems remain, the IISS said, naming a lack of stability in public financing that “ultimately limits (the defense) industry’s ability to invest with confidence.”

Moreover, “regulatory hurdles and application of environmental, social and governance standards will continue to act as barriers to investment,” it said.

Europe’s defence industry managed to increase output of some products after 2022, especially those with high demand from Ukraine, such as air defence and artillery. But European countries also donated their own weapons to Ukraine, including F-16 fighter jets, and “remain dependent on the US for some important aspects of their military capability,” looking also to Brazil, Israel and South Korea to meet their needs due to a lack of their production capacity.

Competition with civilian industries for raw materials and skilled professionals makes things harder for the defence industry, the report said.

It also warned that many European armies don’t have enough military personnel. A lesson learned from Russia’s war against Ukraine is “that countries need significant troops to engage with and defeat enemy attack, but also enough forces to regenerate after combat attrition."

By that standard, “key European armed forces remain under-strength.”

Europeans have a long way to go to renovate their defence capabilities, the report said.

“Forces, budgets and defence-industrial capacities were reduced because of political decisions by governments. These same governments now need to rediscover the ‘muscle memory’ of defense and security, ensuring sustained policy attention and investment to meet the new strategic realities in Europe.”