European Union

MEPs have come out against a recovery fund-style model, joining the EU's audit body in criticising the European Commission's plans.

The leaders endorsed 'technological neutrality' in a joint op-ed outling new Franco-German agreement on European energy policy.

After the shakiest of starts on Tuesday, Friedrich Merz looks to regroup with visits to Paris and Warsaw on Wednesday.

Géza Andreas von Geyr served as his country's ambassador to NATO for two years and brings extensive experience in diplomacy and defence.

As of today, all telephone communications within the Vatican will be cut off and will only be restored after the announcement of the election of the new pontiff.

Türkiye’s geopolitical and strategic importance cannot make up for the government’s democratic backsliding, and EU membership criteria are not up for negotiation, MEPs say.
Committee on Foreign Affairs

Source : © European Union, 2025 - EP

Türkiye’s geopolitical and strategic importance cannot make up for the government’s democratic backsliding, and EU membership criteria are not up for negotiation, MEPs say.
Committee on Foreign Affairs

Source : © European Union, 2025 - EP

Parliament adopted its recommendations for the European Water Resilience Strategy, expected from the Commission before summer 2025.
Committee on the Environment, Climate and Food Safety

Source : © European Union, 2025 - EP

Parliament adopted its recommendations for the European Water Resilience Strategy, expected from the Commission before summer 2025.
Committee on the Environment, Climate and Food Safety

Source : © European Union, 2025 - EP

Written by Sebastian Clapp.

Russia’s war on Ukraine has been a wake-up call for many EU Member States’ defence budgets. Rising from €218 billion in 2021 to €326 billion in 2024, a further increase of at least €100 billion is projected by 2027. Despite these significant increases, most experts note that current geopolitical developments will require much more.

Defence budget definition
The EU uses the Classification of Functions of Government (COFOG) definition of defence spending, which includes ‘Military defence; civil defence; foreign military aid, R&D related to defence; defence not elsewhere classified’. NATO’s definition of defence spending is broader, as it includes military pensions, military healthcare (COFOG includes salaries but not healthcare) and, in some cases, spending on forces such as police or coast guards, but excludes civil defence, which COFOG includes. Moreover, discrepancies may arise from the timing of expenditure recording, particularly for military equipment, since NATO reporting does not adhere to national accounts rules on when such expenditure is recorded. Significant differences exist at national level: for example, NATO member Spain wants to include investment in cyber security, counterterrorism and curbing climate change in its defence spending definition.

EU Member States’ defence budgets

The 23 EU Member States that are also NATO members (now Sweden and Finland have joined NATO) have long been guided by NATO’s 2 % of GDP defence spending commitment formalised at the 2014 Wales Summit. Allies agreed to ‘move towards’ the 2 % ‘guideline within a decade’, but in 2021 only 7 of the 21 Member States that were also NATO members spent 2 % of GDP on defence. EU Member States participating in Permanent Structured Cooperation (PESCO – all except Malta) also agreed to ‘regularly increase defence budgets in real terms’ under their PESCO commitments.

While defence budgets have increased in real terms since 2018/2019 (previously they had not even reached pre-2008 financial crisis levels), this follows years of chronic underinvestment in defence in most Member States. In 2021, their combined defence budgets stood at €218 billion. Meanwhile, strategic rivals such as Russia and China increased their defence budgets by 300 % and 600 % respectively over the last decade, compared to a collective 20 % increase in EU countries (to 2022). The European Commission notes that, if all Member States had spent 2 % of GDP on defence from 2006 to 2020, this would have amounted to an extra €1.1 trillion for defence spending.

The Russian war on Ukraine was a wake-up call for the EU. At the March 2022 Versailles Summit, EU leaders agreed to spend ‘more and better’ on defence. The Strategic Compass, a concrete plan of action for EU security and defence to 2030, reaffirmed this. At the 2023 Vilnius Summit, NATO leaders adopted a new Defence Investment Pledge, committing to allocate a minimum of 2 % of GDP annually to defence on a lasting basis. They also acknowledged that, in many cases, spending above the 2 % threshold will be necessary to address current capability gaps and meet current security demands. Significantly, the second von der Leyen Commission (2024-2029) has made defence a key EU priority. The first-ever Commissioner for Defence and Space was appointed and the European Parliament’s Subcommittee on Security and Defence was elevated to a full Standing Committee. The Commission also pledged to advance the European Defence Union, launched significant initiatives to boost the European defence industry (such as the first-ever European defence industrial strategy), and proposed a defence industry programme. The EU also legislated to boost ammunition production and incentivise joint procurement of urgent defence equipment.

On 4 March 2025, Commission President von der Leyen presented the ReArm Europe plan/Readiness 2030. This aims to leverage €800 billion in defence spending to 2029, including €150 billion in proposed EU-backed loans through a new Security Action for Europe (SAFE) instrument and measures to encourage national defence spending by activating the National Escape Clause of the Stability and Growth Pact for an additional 1.5 % of GDP spending on defence, redeployment of EU cohesion funds, European Investment Bank support and private capital mobilisation. So far, 16 Member States have requested activation of the escape clause. On 19 March 2025, the Commission presented its white paper for European defence, outlining a strategic plan to close critical capability gaps, strengthen the defence industry and readiness, support Ukraine, and boost innovation and partnerships to ensure the continent’s long-term security.

Defence spending increases EU Member State defence expenditure, 2024, in % of GDP

In 2022, collective annual EU defence budgets had already increased to €240 billion, of which €58 billion (+24.2 % compared to 2021) was for defence investment (defence R&D and defence procurement), a real increase of more than 6 % compared to 2021. In 2023, Member States reached a combined €279 billion (1.6 % of GDP) and €326 billion in 2024 (1.9 % of GDP). Defence spending increased by over 30 % in real terms from 2021 to 2024. Additional spending of more than €100 billion is projected in real terms by 2027. The defence expenditure of the 23 EU countries that are also NATO members amounted to 1.99 % of their combined GDP in 2024, with a forecasted rise to 2.04 % in 2025. Of NATO’s 32 members, 23 were expected to meet the 2 % benchmark in 2024 (16 of which are also in the EU). However, there are significant regional differences in the EU; while growth has been steady and has gained momentum in most of Europe, it has remained more subdued in southern European countries.

Given the size of its economy, Germany is the top spender in Europe in absolute terms, spending €90.6 billion (2.12 % of GDP) in 2024, driven more by expanded allocations from the €100 billion Sondervermögen (special fund for defence) than a core budget rise. In March 2025, German lawmakers approved a historic shift to exempt defence and security spending beyond 1 % of GDP from debt limits, enabling a €500 billion fund for defence and infrastructure. France also continued to raise defence spending, to €59.6 billion (2.06 % of GDP) in the 2024 defence budget. President Macron intends to increase French defence spending to 3.5 % of GDP, but has not given a timeframe. In Poland, spending has skyrocketed since 2022 (up 52.3 % in 2023 and 16.9 % in 2024), bringing the budget to PLN151 billion (€34 billion, or 4.12 % of GDP). Poland has thus become NATO’s top defence spender by GDP, with plans to reach 4.7 % in 2025. The largest southern European economies, Italy and Spain, have not followed the trend. Spain’s defence budget remained flat for over a decade, with 2022 spending matching 2008 levels in real terms. Although an 18 % real-terms increase began in 2023, growth stalled again in 2024 when the country failed to pass a new budget, resulting in a real-terms decline. Italy also had a decade of stagnation until moderate growth resumed in 2022, bringing spending back to 2008 levels in real terms. However, Italy plans to double its spending over four years and Spain has also vowed to reach 2 % in 2025.

Meanwhile, Russia and China have continued to raise their defence budgets. Russia spends an estimated 9 % of GDP (up from 6 % in 2023) and is projected to exceed EU Member State defence spending in purchasing power parity terms (PPP) in 2025. China announced a 7.2 % rise in its defence budget to €220 billion for 2025 (an estimated €515 billion in PPP), though experts believe actual spending may be much higher.

NATO Secretary General Mark Rutte warned ‘we are going to need a lot more than 2 %’. The United States advocates an increased spending target to 5 % of GDP. The US spent an estimated US$967 billion or 3.38 % of its GDP in 2024. Reports note ongoing talks suggest a potential compromise at around 3 % to 3.5 %, with a final decision expected at the NATO leaders’ summit at the end of June 2025. One study notes that defence spending may need to rise from 2 % to 3.5 % GDP in the short term to deter Russia without the US.

European Parliament position

Parliament has consistently called for an increase in defence spending and its 2024 Common Security and Defence Policy implementation report welcomed Member States’ increased defence spending. It urged all EU countries to boost their defence budgets beyond NATO’s 2 % of GDP benchmark and to significantly increase defence collaboration.

Read the complete ‘at a glance’ note on ‘EU Member States’ defence budgets‘ in the Think Tank pages of the European Parliament.

In a series of votes on Wednesday, MEPs granted discharge to all but two EU bodies, approving the way they managed the EU budget in 2023.
Committee on Budgetary Control

Source : © European Union, 2025 - EP

In a series of votes on Wednesday, MEPs granted discharge to all but two EU bodies, approving the way they managed the EU budget in 2023.
Committee on Budgetary Control

Source : © European Union, 2025 - EP

Parliament’s vision and demands for the EU’s 2028-2034 budget are set out in a resolution adopted by MEPs on Wednesday.
Committee on Budgets

Source : © European Union, 2025 - EP

Parliament’s vision and demands for the EU’s 2028-2034 budget are set out in a resolution adopted by MEPs on Wednesday.
Committee on Budgets

Source : © European Union, 2025 - EP

On Wednesday, the European Parliament marked the 80th anniversary of the end of World War II in Europe in a ceremony in plenary with three veterans.

Source : © European Union, 2025 - EP

On Wednesday, the European Parliament marked the 80th anniversary of the end of World War II in Europe in a ceremony in plenary with three veterans.

Source : © European Union, 2025 - EP

Speech by Ambassador Cai Run at the Reception in Celebrating the 50th Anniversary of China-EU Diplomatic Ties.

US spies are under orders to monitor Greenland's independence movement and find those receptive to Trump's desire to control the island, the WSJ reports.

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Source : © European Union, 2025 - EP

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Source : © European Union, 2025 - EP