Introduction
Europe is entering a new era of rearmament. For decades, defense budgets across the continent remained stagnant or declined, shaped by post-Cold War peace and a reliance on U.S. military protection. But since Russia’s invasion of Ukraine in 2022—and with uncertainty surrounding the future of NATO under a potential Trump presidency—the European Union has dramatically shifted course. In 2025, Europe is projected to spend over €300 billion on defense, the highest level in modern EU history. What’s behind this military surge, and how is it reshaping Europe’s geopolitical role?
The Spending Surge
According to data from the European Defence Agency (EDA) and SIPRI, European defense spending rose by 15% in 2024 and is set to surpass €300 billion in 2025, including national defense budgets, joint procurement programs, and EU-level funds like the European Peace Facility.
Key drivers include:
- Ongoing war in Ukraine and fears of escalation
- U.S. uncertainty under a possible Trump presidency
- Russian hybrid threats to Baltic states and Eastern Europe
- Pressure to meet or exceed NATO’s 2% GDP target
Nations like Poland and Finland are leading the charge. Poland will spend 4.2% of GDP on defense in 2025—higher than any NATO member—while Germany, France, and Italy are all ramping up budgets.
From Fragmentation to Coordination
Historically, European defense has been fragmented, with each country pursuing its own procurement plans. That’s changing. The EU’s new Defense Industrial Strategy, launched in early 2025, promotes:
- Joint ammunition and weapons procurement
- Standardization of systems across member states
- Expansion of EU-based defense manufacturing
This has led to new pan-European orders for artillery shells, tanks, and drones. Rheinmetall, Leonardo, and Dassault Aviation have received record contracts. Rheinmetall even plans to convert unused Volkswagen plants in Germany into tank production facilities.
The Trump Effect: Europe Prepares for Strategic Autonomy
Donald Trump’s return to the White House has had a profound psychological and strategic effect on European defense thinking. Trump’s past threats to withdraw support for NATO and demand full burden-sharing have spurred European capitals to prepare for a post-American security landscape.
As Ursula von der Leyen said in March 2025: “Europe must be able to defend itself, with or without American support.” The EU has since accelerated discussions around a European Security Council and new rapid deployment forces.
Rising Defense Stocks and Industrial Rebirth
The rearmament push has revitalized Europe’s defense industrial base. Rheinmetall, Saab, and Thales stocks have all surged. Defense firms are hiring aggressively and expanding facilities. In Germany, Rheinmetall’s market capitalization now exceeds that of Volkswagen, signaling the reindustrialization of Europe through defense.
“An era of rearmament has begun. It brings growth prospects we’ve never experienced before,” said Rheinmetall CEO Armin Papperger.
Public Opinion and Political Shifts
While defense spending is politically sensitive, Russia’s war and U.S. unpredictability have shifted public attitudes. A 2025 Eurobarometer poll found:
- 72% of Europeans support increasing EU defense capabilities
- 64% favor joint defense procurement over national duplication
- Only 38% trust the U.S. to guarantee Europe’s security long-term
Far-right parties like the AfD or France’s National Rally are torn—opposing aid to Ukraine while supporting defense autonomy at home. Meanwhile, centrist and center-right parties are converging around a new defense consensus.
Conclusion
Europe’s $300 billion military surge is more than a budgetary pivot—it’s a geopolitical realignment. For the first time since the Cold War, the EU is preparing to act as a full-spectrum security actor. The road to strategic autonomy remains long, and political obstacles persist, but one thing is clear: Europe is no longer counting on others to defend it.
