The combined defence expenditure of European Union member states reached 418 billion euros in 2025, an increase of 20 per cent compared with 2024 and equivalent to 2.2 per cent of GDP. This is set out in the European Defence Agency (EDA) report Defence Data 2025–2026, published on 16 July 2026. For 2026, expenditure is expected to rise further to 454 billion euros, or 2.4 per cent of GDP.
"Member states are making unprecedented investments in defence, with expenditure that, at the current trend, is expected to reach up to 547 billion euros by 2029. Combined with the instruments mobilised at EU level under the Defence Readiness 2030 initiative, the investments should strengthen Europe's defence capabilities, expand industrial capacity, and increase preparedness and resilience," said EDA Executive Director André Denk in a press release.
According to the report, 23 of the 27 member states reached the two per cent target in 2025, ten more than the previous year. Estonia and Lithuania are projected to allocate over five per cent of GDP to defence in 2026, the highest figures in the EU by a considerable margin, while Latvia is approaching four per cent. Among the Nordic EU member states, Denmark recorded the highest figure in 2025 at just over three per cent, followed by Finland and Sweden.
Investment is driving development. In 2025, 32.2 per cent of defence expenditure went towards investment, well above the EU benchmark of 20 per cent, and equipment procurement increased by 26 per cent in real terms to 115 billion euros. At the same time, the EDA points to continuing structural shortcomings, as collaborative procurement accounted for 24 per cent of equipment expenditure, below the desired level, and national solutions continue to dominate capability development.
Research and development is also lagging behind, according to the EDA. Member states spent 17 billion euros on defence research and development (R&D) in 2025, equivalent to 4.0 per cent of expenditure, and the gap relative to equipment procurement continues to widen. For 2026, R&D expenditure is expected to increase to 20 billion euros.
The report is based on data from the defence ministries of all 27 member states. The figures for 2026 are projections, and the EDA notes that the effect of EU instruments such as the SAFE loans will only become clear once budget processes are finalised in 2027.