The Global Institute for Strategic Studies (GISS)
Europe is undergoing the most significant military transformation since the end of the Cold War. What began as an emergency response to Russia’s invasion of Ukraine has evolved into a broader strategic shift that is reshaping the continent’s defence posture, industrial base, and geopolitical ambitions. Across the European Union and NATO, governments are dramatically increasing military spending, expanding defence production, modernising armed forces, and seeking greater strategic autonomy in an increasingly uncertain international environment. The era in which Europe relied overwhelmingly on American military guarantees is gradually giving way to a new phase in which European states are investing heavily in their own defence capabilities and industrial resilience.
This transformation is being driven by multiple factors. Russia’s continuing war against Ukraine has fundamentally altered European threat perceptions. Growing uncertainty regarding future American security commitments has reinforced calls for greater European responsibility. At the same time, emerging technologies, including artificial intelligence, autonomous systems, cyber warfare, and advanced missile capabilities, are forcing governments to rethink military doctrine and procurement priorities. The result is a continent-wide rearmament effort that could redefine the European security architecture for decades to come.
Europe’s Strategic Awakening
For much of the post-Cold War era, Europe benefited from what many policymakers described as a “peace dividend.” Defence budgets were reduced, military stockpiles were allowed to shrink, and many governments prioritized welfare spending over military preparedness. The assumption underlying these decisions was that large-scale interstate conflict on the continent had become highly unlikely.
Russia’s full-scale invasion of Ukraine shattered that assumption.
The war exposed critical weaknesses in Europe’s military readiness, ammunition stockpiles, defence-industrial capacity, and strategic coordination. It also highlighted the extent to which European security remained dependent on American military power. Although European governments provided substantial assistance to Ukraine, the most significant intelligence, logistics, and advanced weapons support continued to come from the United States. This dependence triggered a profound reassessment across European capitals.
The result has been a strategic awakening. Defence is no longer viewed solely as a national responsibility but increasingly as a collective European priority. Governments that once resisted higher military spending are now announcing ambitious rearmament plans, while public opinion has become more supportive of stronger defence capabilities.
The Rise of the European Defence Economy
One of the most significant dimensions of Europe’s military transformation is the rapid expansion of its defence-industrial base.
European defence spending has increased dramatically since 2020. EU member states are expected to spend approximately €381 billion on defence in 2025, representing an increase of more than 60% compared to 2020. Defence investment in equipment, research, and procurement has also reached record levels.
The European Commission’s Readiness 2030 initiative seeks to mobilise up to €800 billion in defence-related investment over the coming years. The objective is not merely to increase spending but to create a more integrated and resilient European defence ecosystem capable of supporting long-term military preparedness.
Ammunition factories are expanding production lines. Defence companies are increasing investments in drones, missiles, air-defence systems, cyber capabilities, and artificial intelligence. Governments are encouraging joint procurement projects to reduce fragmentation and improve interoperability among European armed forces.
This industrial mobilisation reflects a broader recognition that military power depends not only on soldiers and equipment but also on production capacity and supply-chain resilience.
Germany’s Transformation
No country better illustrates Europe’s strategic transformation than Germany.
For decades, Germany maintained a relatively cautious approach to military power, shaped by historical experience and political culture. Today, Berlin is emerging as one of Europe’s central defence actors.
Germany has significantly expanded defence spending, accelerated procurement programs, and increased support for domestic defence industries. Recent agreements to acquire substantial stakes in strategic defence manufacturers such as KNDS—the producer of the Leopard tank—reflect Berlin’s determination to strengthen industrial sovereignty while enhancing military capabilities.
German policymakers increasingly view defence not only as a security issue but also as an industrial and technological priority. This shift marks one of the most significant changes in European strategic thinking since reunification.
The Technology Revolution in Warfare
Europe’s rearmament is not simply about spending more money. It is also about adapting to a new era of warfare.
The conflict in Ukraine has demonstrated the transformative impact of drones, artificial intelligence, electronic warfare, cyber operations, and autonomous systems. Traditional military platforms remain important, but future conflicts are increasingly likely to be shaped by technological innovation.
European governments and private investors are responding accordingly. Defence technology investment has surged, with billions of dollars flowing into companies developing AI-enabled systems, autonomous vehicles, satellite technologies, and next-generation battlefield capabilities.
The growing integration of AI into military planning, intelligence analysis, logistics, and weapons systems is likely to reshape military competition in the coming decade. Governments that successfully integrate these technologies will enjoy significant operational advantages.
Strategic Autonomy or Strategic Illusion?
Despite substantial progress, Europe continues to face significant challenges.
One of the most important concerns involves the gap between political commitments and actual military capability. Analysts increasingly warn that higher spending does not automatically translate into greater military effectiveness. Fragmented procurement systems, national industrial interests, and bureaucratic inefficiencies continue to limit Europe’s ability to convert investment into operational power.
Europe also remains dependent on American intelligence, strategic airlift, missile defence, and nuclear deterrence capabilities. While calls for strategic autonomy have intensified, achieving genuine independence from the United States would require years of investment and political coordination.
The central challenge is therefore not whether Europe can spend more on defence—it clearly can. The question is whether Europe can transform spending into credible military power.
Ukraine and the Future European Security Order
Ukraine is increasingly becoming part of Europe’s long-term defence calculations.
European leaders now openly discuss integrating Ukraine’s military expertise, industrial capabilities, and battlefield experience into the broader European security framework. Many policymakers view Ukraine not simply as a partner but as a future pillar of European defence architecture.
The war has also accelerated cooperation between European governments and defence industries, creating new networks of military production and technological development.
Regardless of how the conflict eventually ends, Ukraine is likely to remain central to European security planning for decades.
Europe is entering a new strategic era.
The continent’s unprecedented rearmament effort reflects a recognition that the assumptions underpinning European security since the end of the Cold War are no longer sufficient. Russia’s aggression, technological transformation, geopolitical uncertainty, and shifting American priorities have combined to create a fundamentally different security environment.
The question facing Europe is no longer whether it should strengthen its defence capabilities. That debate has largely been settled.
The real challenge is whether Europe can successfully transform higher spending, industrial expansion, and political ambition into a coherent and effective military power capable of defending its interests in an increasingly unstable world.
The answer will shape not only the future of European security but also the future balance of power in the international system.