According to the Stockholm International Peace Research Institute (SIPRI), global military spending surged by 9.4% in 2024, reaching $2.718 trillion—the largest annual increase ever recorded. The main driver of this spike was Europe (including Russia), where expenditures rose by 17% to $693 billion, surpassing levels seen at the end of the Cold War. This dramatic rise is directly linked to Russia’s full-scale invasion of Ukraine, which has compelled European capitals to systematically increase defense budgets for the third consecutive year. The impact is even more pronounced on the side of the victim: SIPRI notes that Ukraine, under conditions of total mobilization, has been forced to redirect nearly all tax revenues toward defense.
For the EU, these figures are no longer abstract statistics—they represent a daily stress test of resilience. Russia’s sustained missile and drone campaign against Ukrainian cities, logistics, and energy infrastructure has made the prospect of a “long war” the default scenario shaping Europe’s security agenda.
Data from the European Defence Agency (EDA) shows that EU countries spent a record €279 billion on defense in 2023—a 10% increase—with projections for 2024 nearing €326 billion. This amounts to approximately 1.9% of EU GDP and marks a more than 30% real increase in defense spending since 2021. In other words, a qualitative shift has already occurred: defense is no longer a residual budget item, as it was for decades following the early 1990s.
In 2025, NATO allies agreed on a new benchmark for defense financing: by 2035, total spending on defense and security should reach 5% of GDP. This figure comprises two components—around 3.5% for core defense needs (personnel, weapons, ammunition), and another 1.5% for related areas (military infrastructure, cybersecurity, protection of critical energy systems, etc.). For nearly all European economies, this will mean a long-term, systemic reconfiguration of budget priorities—inevitably at the expense of social and humanitarian sectors. As the saying goes, “When the cannons roar, the muses fall silent.”
Healthcare has traditionally been a top priority in most national budgets, with public health seen as a cornerstone of national development. Today’s challenges—post-COVID recovery, aging populations, and medical workforce shortages—require sustained investment. But as defense spending grows and EU-wide fiscal rules return, the room for expanding healthcare shrinks. The European Central Bank notes that in 2024, EU defense spending reached about 2% of GDP (1.9% in the eurozone), and new initiatives are pushing for more flexible rules in favor of defense and security. If this flexibility is consumed by arms procurement and dual-use infrastructure, less will be left for hospital networks, preventive care, and mental health services.
The accelerated militarization of scientific research has a dual effect. On one hand, defense R&D stimulates technological innovation; on the other, it sidelines civilian priorities like school digitalization and non-military fundamental science. NATO’s new spending structure encourages governments to “recolor” investments to fit the 3.5% + 1.5% framework, creating competition between “guns and textbooks.”
War’s inseparable companion—inflation—hits low-income citizens hardest. The inflation of 2022–2023 already eroded real incomes for vulnerable households. Even with the European Commission forecasting moderate inflation of 1.1% in 2025, some social programs may still be left without generous funding. As governments calculate how to meet NATO’s 5% target by 2035, there’s a growing temptation to offset defense increases by “optimizing” non-priority items like welfare, housing subsidies, and family policy. This budget inertia risks becoming a political liability—one that populists are quick to exploit.
At the same time, the European Commission’s spring forecast highlights a short-term economic boost from defense orders, which support employment and soften budget tightening. But by the end of this decade, a subtle trap may emerge: if the defense industry fails to scale efficiently and the 5% target becomes a de facto obligation, structural displacement of social spending becomes a likely scenario. The alternatives are few—either higher taxes and debt, or painful cuts to social programs.
SIPRI emphasizes that Europe’s surge in military spending is the main contributor to global growth in defense expenditures. The reason isn’t an abstract “arms race,” but the very real threat posed by Russia’s aggression in Ukraine. Even as peace talks gain momentum, Moscow retains the capacity to rapidly rebuild its military, meaning the risk of renewed aggression remains. Politically, this has solidified a durable EU-NATO consensus in favor of long-term rearmament and expanded munitions production.
Yet despite the burdens of a war economy, European citizens have every right to a stable life and, when needed, public support. To ensure defense spending doesn’t erode Europe’s social contract, several strategic steps are essential:
- Efficiency Metrics for Joint Procurement Access to EU-wide financing tools should depend on cooperation and standardization levels. This could save billions and free up resources for social programs. EDA’s logic points to scaling joint projects.
- Social Dividends from Infrastructure Spending The additional 1.5% under NATO’s new target should deliver real social benefits—better transport access, improved household energy efficiency, and climate-conscious design. Otherwise, it risks becoming a rebranding of old capital projects.
- Protection for Vulnerable Populations While defense orders stimulate the economy, national fiscal rules must guarantee a minimum social safety net—indexed child benefits, support for low-income groups, and secure funding for basic healthcare and education.
- Public Accountability for Budget Trade-Offs Each EU country should publish a “displacement balance,” showing how much defense gained and which civilian programs were optimized or preserved. This would reduce political toxicity and build public trust.
- Preserving Innovation Balance Civilian research must retain a guaranteed share in government programs. Otherwise, Europe risks a shortage of STEM teachers and medical staff, while producing an excess of narrowly specialized defense experts. Maintaining this balance is key to both security and social resilience.
Europe cannot afford to ignore the Russian threat. The war in Ukraine is no longer a distant conflict—it’s a crash test for the continent’s security architecture. SIPRI and EDA data reveal a structural shift: defense has moved from the margins to the center of the budget. NATO’s 5% GDP goal locks in this trajectory for the next decade. The real question now isn’t “how much to spend,” but “how to spend”—to protect not just borders, but the European social contract itself. Without transparency, cooperation, and disciplined spending, the defense boom could easily become a long-term erosion of healthcare, education, and equality—the very foundations Russia seeks to undermine, and Europe must preserve.