Europe is pouring billions of euros into defence as governments race to strengthen military readiness amid rising geopolitical tensions. But despite the political push for European self‑reliance, analysts say a large share of this new spending may ultimately flow to US defence firms, which continue to dominate key military technologies.
According to recent NATO data, European allies and Canada increased defence spending by an additional $90 billion in real terms in 2025, bringing total military expenditure to more than $570 billion. Germany has emerged as the biggest spender, planning to more than double its defence budget to over €200 billion by 2030. Poland, Lithuania and Estonia are also rapidly expanding their military investments as concerns grow over Russia’s continued aggression.
NATO leaders meeting in Ankara this week are expected to reaffirm long‑term spending commitments. Secretary General Mark Rutte has urged member states to submit “clear, concrete and credible” plans to meet new alliance targets — including spending 5% of GDP on defence and security by 2035. Of that, 3.5% is expected to go toward core military capabilities, with another 1.5% allocated to supporting infrastructure.
However, Europe’s defence‑industrial base remains constrained by years of underinvestment, limited production capacity and slow procurement processes. As a result, countries continue to rely heavily on American fighter jets, missile systems and advanced military technology. This means that even as Europe aims to reduce dependence on Washington, US defence manufacturers are well‑positioned to secure a major share of new contracts.
The spending surge reflects Europe’s urgent need to rebuild deterrence after decades of shrinking defence budgets. But the continent’s path to true strategic autonomy remains complicated — and for now, the biggest beneficiaries of Europe’s defence boom may be companies headquartered across the Atlantic.