EU defence spending reached €418 billion in 2025, up 20% from 2024

Defence spending by the EU’s 27 Member States totalled €418 billion in 2025, 20% more than in 2024.¹ The Commission projects that spending by those countries will reach €454 billion in 2026.¹ At NATO FUSE 2026, Commissioner Dombrovskis said that strengthening Europe’s defence had become a leading EU priority.¹ The spending totals describe Member States’ defence outlays, while the Commission’s separate readiness agenda seeks to mobilise as much as €800 billion in defence investment.¹ That investment goal sits alongside the reported annual spending figures, and the Commission has also identified particular instruments and programmes for defence-related work.¹

One of those instruments is SAFE, a €150 billion facility financing work in missile defence, drones and cyber security across Europe.¹ The European Defence Industry Programme, or EDIP, was set up to update the defence industry, expand its production capacity and protect Europe’s technological position.¹ A different programme, the €7.3 billion European Defence Fund, supports companies working on new defence technologies and equipment designed to function across systems.¹ These initiatives address different parts of the agenda: SAFE finances specified investment areas, EDIP targets industrial development, and the fund backs company research and development.¹ The figures attached to SAFE and the Defence Fund are stated as the size of those instruments, while the €800 billion figure is the amount the readiness agenda seeks to mobilise.¹

The Commission has also changed the fiscal framework to give Member States more room in their budgets to mobilise defence investment.¹ That adjustment accompanies the EU-wide spending increase reported for 2025 and the further rise projected for 2026.¹ The spending total for 2025 covers the EU’s 27 Member States, whereas Latvia’s announced commitment is expressed differently: its defence spending is set to equal 5% of GDP next year.¹ The Latvian figure is a share of the country’s economic output, not a euro total comparable in form to the EU-wide amounts.¹ Latvian industry and research organizations are also involved in more than thirty cross-border European defence research and development projects.¹

Drones and counter-drone systems form another part of the EU’s capability work, which includes joint purchasing and delivery as well as innovation, operational testing and rapid expansion.¹ Latvia, Croatia, Denmark, the Netherlands and Spain are leading the Capability Coalition associated with this area.¹ DECODER is among the first five European Defence Projects of Common Interest created under EDIP.¹ Its purpose is to help European countries develop and deploy drones, while also expanding technologies intended to stop hostile drones.¹ The project connects the wider industrial programme with a specific effort to build and use drone and counter-drone capabilities.¹

The Commission plans to introduce AGILE early next year as a way to shorten the path from disruptive defence technology development to battlefield use.¹ The initiative is intended to help SMEs, startups and scaleups progress from developing technologies to wider market uptake.¹ The planned European Drone Technology Hubs have a later stated timetable: the first two are scheduled for establishment in 2027.¹ The first site is planned for Latvia’s Selonia military training area and is to cover land and air drone systems, including counter-drone technology.¹ The other planned hub, in Scheveningen in the Netherlands, is to work on naval capabilities, seabed security, harbour protection and critical underwater infrastructure.¹

The two proposed hubs divide their stated focus between land and air activity at Selonia and maritime and underwater concerns at Scheveningen.¹ Both are part of the scheduled first pair of European Drone Technology Hubs, with the 2027 date applying to their planned establishment.¹ The Commission’s drone capability work also includes procurement, delivery, testing and efforts to scale up, alongside the hubs’ specified technical areas.¹ AGILE is described separately as an initiative to move disruptive technologies toward battlefield use and to assist smaller and newer businesses in reaching the market.¹ Together, these announcements identify different stages of the work, from developing technology and testing it to procurement, deployment and commercial uptake.¹

Ukraine is another element of the EU’s defence relationships: the Union said it had supplied more than €230 billion in financial support since February 2022.¹ The EU aims to sign a Defence Industry Pact with Ukraine by the end of the year.¹ The proposed pact is designed to ease the formation of joint companies, the exchange of technology and the incorporation of Ukraine’s defence sector into Europe’s industrial base.¹ The reported support figure concerns financial assistance since February 2022, while the pact remains an agreement the EU aims to sign by year’s end.¹ The pact’s stated purpose is industrial cooperation and integration; the facts describe it in terms of ventures, technology transfer and links between defence industries.¹

The EU is also discussing a closer relationship with Canada, although the proposed label for that relationship remains disputed among EU countries.²³ At the Canada-EU summit in Montreal, Commission President Ursula von der Leyen said the sides wanted greater cooperation in AI, climate, energy and security.² Von der Leyen described the proposed arrangement as an association without accession and said it might come closer to membership than earlier partnerships.³ She also said the EU and Canada continued to consider whether Canada could become the union’s first associate member, a term Germany and other EU countries oppose.² Canadian Prime Minister Mark Carney said he was not concerned about the associate-member label or other names for the alliance, and emphasized its effect on Canadians’ lives.³

An EU official told AFP that Canada and the EU sought to bring their policies closer on climate, energy and artificial intelligence, potentially allowing Ottawa to join some EU programmes.³ The reported Canadian discussions concern policy alignment and possible participation in some programmes, while the proposed association is not described as accession.³ The EU also has a Security and Defense Partnership with India, signed in January, followed by its first formal Security and Defense Dialogue in March.³ That partnership establishes a framework for closer engagement, but it does not create a joint security commitment.³ The Canada discussions and the India framework therefore have distinct stated forms: one concerns a proposed association and policy alignment, while the other sets out a basis for engagement without a shared security guarantee.²³