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1. How to Spend It: European defence for the age of mass precision

Author:
Chris Kremidas-Courtney
Publication Date:
03-2025
Content Type:
Working Paper
Institution:
European Policy Centre (EPC)
Abstract:
Europe urgently needs to redefine its defence strategy in response to the United States’ growing disengagement from its transatlantic allies. The suspension of US military assistance to Ukraine and calls for increased European self-reliance have forced policymakers to rapidly reassess how to sustain collective security. The European Union’s ReArm EU plan seeks to mobilise €800 billion in national defence spending to meet these challenges, but investments must be made wisely to prepare for future warfare. Modern warfare has entered into an era of mass precision, where forces can achieve the effects of massed firepower through distributed, AI-enabled, and highly accurate weapons systems. Ukraine’s innovative use of drone swarms and precision strikes against Russian forces has demonstrated this shift. China and the US are also leveraging mass precision to reshape the battlefield, making traditional mass-based warfare increasingly obsolete. However, while armoured vehicles, fighter jets, and ships require new protections, they remain essential when integrated into networked, distributed operations. To prepare for this new strategic reality, Europe must: Invest in mass precision and distributed operations – Prioritise drone warfare, deep-strike capabilities, and networked operations. Accelerate investment in the European Long-Range Strike Approach (ELSA) programme to develop long-range cruise missiles. Build a European command-and-control (C2) system – Reduce reliance on NATO’s US-centric C2 infrastructure. Strengthen Europe’s intelligence capabilities and decision support – Expand European satellite and cyber capabilities and expand analytical capacities. Strengthen air and missile defence – Accelerate the European Sky Shield Initiative (ESSI) and deploy cost effective countermeasures such as more cost effective laser-based systems. Build a European military logistics system – Ensure the ability to sustain forces and ensure rapid troop and equipment mobility within Europe. Train and exercise European forces at scale – Conduct large-scale joint exercises to build readiness. Buy Ukrainian – Integrate Ukrainian defence firms into EU supply chains. Buy European – Reduce dependence on US arms while leveraging UK, Norwegian, Canadian and Turkish defence industries. Build a European nuclear umbrella – France and the UK should explore extended deterrence options to protect all European allies in case of further US withdrawal. Build a European blue-water navy – Strengthen and expand European naval capabilities to protect vital sea lanes in addition to supporting territorial defence. Winning the next war, not the last one Europe can no longer afford slow, bureaucratic and fragmented defence spending—it must accelerate, integrate and innovate in order to defend itself in the event that the United States is unable or unwilling to do so. We don’t just need bigger budgets—we need a better strategy. The future of warfare is mass precision and distributed operations, enabled by AI, and supported by capabilities that enable decision, cyber and information dominance. If Europe invests wisely, it can be a technologically advanced, resilient and autonomous military power while remaining a robust pillar of NATO’s collective security. The hour of Europe is now.
Topic:
Defense Policy, European Union, Weapons, Disengagement, and Defense Spending
Political Geography:
Europe and United States of America

2. Dilemmas for the EU in deficit-financing of defence expenditure and maintenance of fiscal discipline

Author:
Lucio Pench
Publication Date:
03-2025
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
The European Union is grappling with the challenge of increasing defence expenditure while maintaining fiscal discipline under the Stability and Growth Pact (SGP). The European Commission has proposed activating the national escape clause available under the SGP to accommodate defence spending without triggering the excessive deficit procedure (EDP). However, the scope and enforcement of this measure remain uncertain. A proposed 1.5 percent of GDP cap on extra fiscal flexibility is legally questionable and unlikely to be enforced. While low-debt countries do not require the clause due to existing flexibility, highly indebted nations may find it insufficient in the face of rising debt costs. The escape clause may also serve as a backdoor for European Central Bank interventions under the Transmission Protection Instrument, which requires compliance with EU fiscal rules. The Commission has also proposed the Security Action for Europe (SAFE) funding mechanism, a €150 billion loan programme to finance national defence investments. SAFE relies on national borrowing and follows the model of the SURE (Support to mitigate Unemployment Risks in an Emergency) facility, put in place during the COVID-19 pandemic. However, SAFE’s limited scale and dependence on national fiscal capacities mean it falls short of the collective security funding approach advocated by economists. Meanwhile, Germany’s decision to reform its constitutional debt brake marks a major departure from its traditional fiscal policies. The reform establishes a permanent ‘defence golden rule’, exempting military spending from borrowing limits, alongside a €10 trillion infrastructure fund. Although this move does not endanger Germany’s fiscal sustainability, it undermines EU-wide fiscal coordination and conflicts with the SGP. This could weaken the European Central Bank’s position in future market interventions. Given these challenges, discussions on a new EU fiscal framework are necessary to ensure fiscal flexibility while maintaining debt sustainability.
Topic:
Security, Budget, European Union, Fiscal Policy, and Defense Spending
Political Geography:
Europe

3. Moving Targets. Trends in Japan’s Foreign and Security Policies

Author:
Axel Berkofsky and Giulia Sciorati
Publication Date:
03-2024
Content Type:
Special Report
Institution:
Italian Institute for International Political Studies (ISPI)
Abstract:
In December 2022, Japan announced it would drastically increase its defence budget by 2027. The decision came as a wake-up call for the whole region: Japan was gearing up for a world of heightened tensions and rivalry in the Indo-Pacific Region. This Report analyses the present and future of Japan’s security and defence policies. Within the context of a rising China, Tokyo has broadened its defence ties with the US, India, Australia, and Taiwan. However, China remains its biggest trading partner, meaning Tokyo's policymakers are charged with the task and challenge of striking a balance between defence policies and business and trade relations with China.
Topic:
Foreign Policy, Diplomacy, ASEAN, Influence, Defense Spending, and Regional Politics
Political Geography:
Japan, India, Taiwan, Australia, United States of America, and Indo-Pacific

4. Contemporary Trends in Militarisation

Author:
Institute for Economics and Peace (IEP)
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Institute for Economics & Peace (IEP)
Abstract:
This report provides two new approaches to understand the capabilities of the world’s militaries by country. The first analyses and tracks changes in a range of militarisation indicators. The main finding of this approach is that while military expenditure is rising in absolute terms, as a percentage of GDP it has fallen and is around half of the peaks seen at the height of the Cold War. Concurrently, as military sophistication increases, troop numbers are declining, highlighting a growing reliance on technology. The second approach is the development of a new and original methodology that calculates the military capacity of countries by weighting the generations of their military assets. These capability scores substantially change the ranking of countries when compared to traditional approaches that count just the number of military assets, or compare military expenditure. The US has the highest capability score, well ahead of China, which ranks second. Russia follows China closely in third. Countries such as Iran and North Korea, despite having large fleets of fixed wing planes, drop considerably in the rankings, because their assets represent older technology. These trends occur as the world is at a crossroad with the number of conflicts, 59, at an all-time high since WWII. These conflicts are becoming more internationalised, with 92 countries involved in a conflict beyond their borders, rising competition between the major powers, and more middle level powers also becoming more assertive. Unresolved conflicts are at the highest levels since WWII, opening more opportunity for major conflicts to erupt.
Topic:
Armed Forces, Military Affairs, Conflict, Militarization, and Defense Spending
Political Geography:
Global Focus

5. The Washington Summit: Burden-sharing

Author:
Tony Lawrence
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
International Centre for Defence and Security - ICDS
Abstract:
NATO heads of state and government will gather in Washington on 9-11 July to mark the Alliance’s 75th anniversary. While a third year of full-scale war rages in Europe, they will need to guard the tone of their celebrations. But it would be remiss of the Allies not to recognise the importance and success of their organisation. NATO remains the essential transatlantic forum. It has had huge positive impact on security in Europe and elsewhere, built shared understanding and purpose among a growing number of members, and successfully adapted to decades of changing circumstances. There is much to applaud. But there is also work to be done. The summit’s main business will concern Ukraine, defence and deterrence, and burden-sharing. While there are unlikely to be big announcements, the summit should play a significant role in ensuring that the decisions taken in Madrid in 2022, and Vilnius in 2023 are properly implemented. This series of briefs examines some of the key issues for the Washington Summit. In the third brief of the series, Tony Lawrence looks at the perennial question of burden-sharing. The Allies will probably not agree to raise the 2% of GDP spending guideline. But in any case, their focus on this metric hides the real picture of how responsibility for security is shared across the Alliance. The European Allies certainly need to step up in all areas, but they should also consider reframing the burden-sharing discussion.
Topic:
NATO, Defense Spending, Russia-Ukraine War, and Burden Sharing
Political Geography:
Europe and United States of America

6. Keeping the Americans In

Author:
Rachel Hoff
Publication Date:
07-2024
Content Type:
Policy Brief
Institution:
International Centre for Defence and Security - ICDS
Abstract:
NATO heads of state and government will gather in Washington on 9-11 July to mark the Alliance’s 75th anniversary. While a third year of full-scale war rages in Europe, they will need to guard the tone of their celebrations. But it would be remiss of the Allies not to recognise the importance and success of their organisation. NATO remains the essential transatlantic forum. It has had huge positive impact on security in Europe and elsewhere, built shared understanding and purpose among a growing number of members, and successfully adapted to decades of changing circumstances. There is much to applaud. But there is also work to be done. The summit’s main business will concern Ukraine, defence and deterrence, and burden-sharing. While there are unlikely to be big announcements, the summit should play a significant role in ensuring that the decisions taken in Madrid in 2022, and Vilnius in 2023 are properly implemented. This series of briefs examines some of the key issues for the Washington Summit. The European Allies will closely watch this year’s US elections, concerned that a second Trump Presidency may have devastating consequences for transatlantic relations. In the sixth brief of the series, Rachel Hoff looks at US rhetoric and attitudes towards NATO. The good news is that polling shows that the majority of Americans are favourable towards NATO and support Article 5. But this support drops if the European Allies fail to meet NATO’s defence spending guidelines. Whoever wins the election in November, Europe will need to pull its weight to keep the US engaged.
Topic:
Defense Policy, NATO, Deterrence, Transatlantic Relations, Defense Spending, Russia-Ukraine War, and Burden Sharing
Political Geography:
Europe and United States of America

7. Uncle Sucker: Why U.S. Efforts at Defense Burdensharing Fail

Author:
Justin Logan
Publication Date:
03-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
In 2022, the United States counted 50 of the world’s 195 countries as formal treaty allies, not including dozens more informal security relationships. U.S. allies do not carry a proportionate share of the burden of their defense; Washington’s allies account for roughly 36 percent of world economic output but only 24 percent of world military spending. In every alliance, the United States is the most important member and gives more than it gets in return. American politicians and the American public regularly express frustration with allies’ behavior. In 1959, for example, President Dwight D. Eisenhower lamented that the insufficient defense efforts of U.S. allies in Europe meant that the Europeans were close to “making a sucker out of Uncle Sam.” Things have gotten worse since 1959. Today, America’s alliances act as transfer payments from U.S. taxpayers to taxpayers in allied countries. History and theory both suggest that hectoring allies is unlikely to produce much change. Allies know that they can pocket the gains from U.S. commitments, then spend their own money in the ways they believe benefit them most. Policymakers should evaluate alliance commitments in the context of the net contributions of U.S. allies to U.S. defense, weighed against the costs and benefits of a non‐​alliance. The only way to produce more equitable burdensharing is to make allies doubt the strength of the U.S. commitment: the stronger the belief in the U.S. commitment, the harder it is to get allies to defend themselves. Unless policymakers fundamentally change their approach to alliances, there is little hope that defense burdens can be spread more equitably.
Topic:
History, Alliance, Defense Spending, Military, and Burden-sharing
Political Geography:
North America and United States of America

8. The big squeeze: SPI Defence budget brief 2023–2024

Author:
Jennifer Parker, David Uren, Bec Shrimpton, and Rob Bourke
Publication Date:
05-2023
Content Type:
Special Report
Institution:
Australian Strategic Policy Institute (ASPI)
Abstract:
Defence has long been seen as a necessary burden on the federal budget. However, it is assuming the status of an urgent priority in the wake of the AUKUS agreement and the far-reaching reform urged by this year’s Defence Strategic Review (DSR). Both are responding to a much more challenging geopolitical environment and the realisation that Australia doesn’t have the luxury of time to achieve readiness. This year’s Defence budget reflects the urgency of the demands upon Defence to the extent that it includes the initial spending on the nuclear-powered submarines and the first response to the DSR, despite there being only very approximate estimates for how that spending is to be scheduled and for the savings that will pay for them.
Topic:
Security, Budget, and Defense Spending
Political Geography:
Australia and Australia/Pacific

9. German Defense Spending: A Repeat of the Past Instead of a New Era

Author:
Christian Mölling, Torben Schütz, and Sören Hellmonds
Publication Date:
06-2023
Content Type:
Policy Brief
Institution:
German Council on Foreign Relations (DGAP)
Abstract:
The historic aspiration of Germany’s Zeitenwende – the new era in its foreign and security policy – will fail without the proposed funding. The growing tension between its demands for the Bundeswehr and missing resources is already driving Germany back to the old and shortsighted approach of cutting and stretching budgets and fragile procurement plans. The country needs a security decade: a ten-year systematic spending effort that closes its substantial security gap. Without sustainable funding for military security and other existential government tasks, Germany will continue to pose a risk to itself and others.
Topic:
Security, Defense Policy, Budget, and Defense Spending
Political Geography:
Europe and Germany

10. NATO and the Indo-Pacific Region

Author:
Iro Särkkä
Publication Date:
07-2023
Content Type:
Policy Brief
Institution:
International Centre for Defence and Security - ICDS
Abstract:
Amid Russia’s war in Ukraine, NATO has paid much less attention to global security issues, such as China’s potentially menacing activities in the Indo-Pacific region. But there too, the deteriorating geopolitical environment calls for NATO to take a stronger cooperative and consultative role. This brief explores why NATO is deepening cooperation with the Indo-Pacific partners. It discusses both NATO’s and individual Allies’security concerns in the region and compares them with those of Australia, Japan, the Republic of Korea, and New Zealand (the AP4).1 It also outlines the development of NATO’s Indo-Pacific partnerships with the AP4 as part of its cooperative security agenda, from the early 2000s to the present day. Finally, it considers how NATO’s cooperative security dialogue is likely to develop in the future and what might be expected at the forthcoming Vilnius Summit.
Topic:
Defense Policy, NATO, Deterrence, Strategic Planning, and Defense Spending
Political Geography:
Europe, United States of America, and Indo-Pacific