News Europe Military spending in Europe reaches Cold War levels

Military spending in Europe reaches Cold War levels

A Leopard2 main battle tank of the German Armed Forces, last October during NATO military exercises north of Vilnius (Lithuania).Mindaugas Kulbis (AP)

The years in which Europe cut back on defense games are definitely behind us. Russia’s invasion of Ukraine has spurred military spending across the continent to a level not seen since the Cold War, despite spiraling inflation and the costs associated with the energy crisis. Plans to boost investment — which began in much of Europe in 2014, after the start of hostilities between Russia and Ukraine — have accelerated and spread across the continent since the Kremlin launched its full-scale attack on nearly a dozen of Ukrainian regions, in February 2022.

Military spending rose 3.6% last year in Europe (not counting Russia or Ukraine), according to data published on Monday by the Stockholm International Peace Research Institute (Sipri). This increase brings investment to the continent to the highest level since the late 1980s. In total, European countries dedicated more than 350,000 million euros to defense (a figure comparable to the GDP of Iran or Pakistan). “It is reasonable to think that military spending will continue to increase in the coming years,” says Diego Lopes, a Sipri researcher who points out that several countries have designed plans to improve the capabilities of their armies that will be carried out throughout this decade.

The increase on the continent is driven by governments such as those of Finland (36%), the Netherlands (13%) or Belgium (12%). In nominal terms, every country in Europe—except Bosnia-Herzegovina and neutral Austria—raised the defense budget last year. Even so, some such as Romania, the Czech Republic and Latvia, which increased their absolute spending by more than 10%, in real terms (that is, discounting the effect of inflation) reflected a contraction as they also reached the levels of price rises. highest in recent decades.

During the more than four decades of the Cold War, military spending in Europe grew slowly but steadily. After the fall of the Berlin Wall and the disintegration of the Soviet Union, practically all European countries undertook a process of reducing military spending, in a period in which the idea prevailed that a conventional war would not take place again in the continent. The expansionist airs of the Kremlin —which in 2008, after the occupation of two regions of Georgia, did not cause even a timid rise in spending in any country on the continent, much reduced by the financial crisis— have resulted in a period of continuous growth in spending continental that, after almost a decade, seems far from its peak.

“Almost all European countries have committed to raising spending,” says Lorenzo Scarazzato, a Sipri researcher. “However, there are many differences in terms of the objectives and how to achieve them,” adds the expert. In Denmark, the government has announced the abolition of a public holiday across the country to increase productivity and pay for increased investment in its military. For its part, Germany, after a historic turn in foreign and defense policy, approved the creation of a special fund of 100,000 million euros that will make it possible to modernize the Armed Forces over the next five years.

2% target

Many European capitals began last year to draw up their plans to meet the goal of investing 2% of GDP that NATO set at the 2014 Welsh summit, and which was vehemently demanded by former US President Donald Trump —and in a more tepid way by his predecessor, Barack Obama. Even so, only eight countries already reach that figure, but all the European members of the Alliance (except the United Kingdom and Portugal) have increased their percentage of spending compared to 2013.

One of those that has recently reached the 2% target has been Poland, which last year raised spending to the highest figure recorded in the Sipri database (which has data from the Central European country since 1951). The Polish government announced in January that it intends to accelerate investment to 4% before December, which would make it the member of the Alliance that invests the largest fraction of its GDP in Defense, ahead of Greece and the United States. “Poland is on its way to having one of the largest land armies in the entire continent”, summarizes Scarazzato.

Soldiers and a Polish warship during military exercises in Krynica Morska, very close to the Russian enclave of Kaliningrad, on April 17.
Soldiers and a Polish warship during military exercises in Krynica Morska, very close to the Russian enclave of Kaliningrad, on April 17.WOJTEK RADWANSKI (AFP)

If Russia and Ukraine are added to the continental calculations, the year-on-year increase in spending was 13%, the highest recorded in the Sipri archives, which does not have information on the Soviet Union prior to 1988. The case of Ukraine —whose ability to stand up to Russian aggression has stunned the world—stands out prominently not only among last year’s figures, but throughout the Swedish think tank’s entire database. The Ukrainian government invested in defense last year, 640% more than in 2021. Financial aid from the United States and the EU has allowed Kiev to increase its military spending to 33.5% of its GDP, a figure surpassed only by Kuwait. in 1990 and 1991 —during the Gulf War— and which is the result of both the vertiginous increase in spending and the deep contraction of the Ukrainian economy.

The tens of billions of euros given by the West in military aid – which are reflected as costs for the donor – raise the figure for Ukraine to more than 80% of that registered by Russia. Even so, Scarazzato points out that the opacity that surrounds the Russian public accounts leads us to presume that the real investment is much higher. Officially, Moscow increased spending last year by 9.1% and allocated 4.1% of its GDP, figures that remain below the peak reached in 2016, at the height of its intervention in Syria and in the midst of of a profound process of modernization of the Armed Forces. The effect of Western sanctions on the Russian economy limits the ability to react to military setbacks on the battlefield, but Scarazzato points out that “Russia still has plenty of room to maneuver to increase spending in the coming years.”

Global investment exceeds the barrier of two trillion euros for the first time

World military spending in 2022 was 2.24 trillion dollars (2.02 trillion euros), a record figure that represents an interannual increase of 3.7%, according to Sipri data, which does not include some countries such as North Korea, Syria or Eritrea. Global investment was greater than the GDP of countries like Russia, Italy or Canada. Except in Africa and South America, spending increased almost everywhere on the planet.

The United States raised its defense investment last year in real terms by just 0.7% compared to 2021, growth that was also greatly slowed by sky-high inflation rates. In total, Washington’s costs represented 39% of the lump sum.

In Asia, the tension around Taiwan and North Korea is also reflected in sharp increases in spending. In the case of China, an increase in investment was registered for the twenty-eighth consecutive year, an unparalleled trend in the Sipri database, to represent 13% of the world total. For its part, Japan has undertaken its biggest shift in defense since World War II and in 2022 dedicated 1.1% of its GDP, the highest level since 1960.

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