Europe is spending more on defence than ever before: Time to spend smart
Europe is entering an unprecedented phase of defence and security investment, with NATO countries targeting 5 percent of GDP annually by 2035. By then, European NATO members could spend an additional EUR 831 billion per year on security. This historic expansion can transform Europe’s military capabilities and reshape its defence industrial base. But if procurement is poorly designed, Europe risks outdated systems, excessive costs, and limited capability gains.
The latest Kiel Report “The Biggest Bang for the Buck: Leveraging Best Practices in Defence Procurement for Europe’s Rearmament” by Rodrigo Carril (Kiel Institute Fellow and Universitat Pompeu Fabra), showcases best practices and strategies for optimising the effectiveness of defence procurement. Today, Carril will present the report jointly with Kiel Institute President Moritz Schularick at a press briefing at the Munich Security Conference.
“Europe’s defence build-up is historic, but more money alone does not guarantee stronger capabilities,” says Carril. “The central challenge is to spend effectively. Smart procurement design will determine whether this expansion truly strengthens Europe’s security.”
Key recommendations from the report include:
- Scaling up in times of crisis
Europe must be able to rapidly expand production in the event of conflict. This requires contracting on production capacity in advance, reducing unit prices and time-to-build through scalable manufacturing, and securing critical supply chains across all tiers. - Procuring innovation
Innovation should be placed at the centre of Europe’s defence strategy. Bottom-up innovation must be encouraged through organisational flexibility, autonomous structures, and multi-stage R&D contests that attract private capital and reward technological breakthroughs. - Centralising procurement at the European level
A more integrated European defence procurement market would generate economies of scale, strengthen bargaining power, foster market entry and competition, and improve interoperability of defence systems.
“The scale of Europe’s rearmament makes efficiency a strategic imperative,” adds Schularick. “What ultimately matters is capability gains — not just higher spending.”
Press Briefing at the Munich Security Conference 2026: Europe is spending more on defence than ever before. Time to spend it smart
- February 13, 12-12.30 CET
- House of Communications (HoC), Press Briefing Room 1, Hotel Bayerischer Hof, Munich
Read Kiel Report now:
Expert
Rodrigo Carril
Kiel Institute Fellow and Universitat Pompeu Fabra
rodrigo.carril@upf.edu
