Geopolitics · Issue 02
Twenty-two European allies now clear 2%
SIPRI: 22 of 29 European NATO members spent at least 2% of GDP on the military in 2025. In 2014, after Wales, it was a handful. Germany crossed. Spain crossed. The 2% line is no longer a speech.
- European NATO members at ≥2% of GDP, 2025
- 22
- European NATO members
- 29
- Germany 2025, first time since 1990
- 2.3%
- The Hague 2025 target by 2035, mixed basket
- 5%
A guideline that became a floor
SIPRI’s April 2026 press release is the count: 22 of 29 European NATO members spent at least 2% of GDP on the military in 2025. Germany hit 2.3%, the first time since 1990. Spain crossed 2% for the first time since 1994, on a 50% spending jump. European NATO together spent $559 billion. Europe as a whole $864 billion, +14%. The Wales 2014 2% guideline was a speech. This is a procurement cycle.
Five percent is a different sentence
The Hague 2025 target — 5% of GDP by 2035, of which 3.5% ‘core’ and the rest a broader security basket — is how alliances blur a number. SIPRI already warns that the boundary between military and ‘defence-related’ will get messier. Pair this with The rearmament decade and Interest now costs more than the Pentagon. Europe can rearm, or it can service ageing and coupons. It will try to do all three. Something will be late.
The long view is factories, not communiqués
A count of countries above 2% is a political chart. The investable chart is shells, air defence, ships, and the industrial base that can take a ten-year order. Own backlog. Do not own a 5% slide.
Investing lens
Horizon 5–12 years · Educational, not advice
2% is now a European floor. Own munitions, air defence and shipyards with contracted backlog. Size for procurement, not for a 5% headline.
Where the map points
- European munitions and air defence with multi-year orders
- Naval yards and submarines
- Sensors, EW, dual-use space
- Avoid a ‘5% of GDP’ equity story with no factory
What can break it
- A ceasefire that pauses orders
- Budget fights that relabel spending as ‘security’
- Delivery slip versus appropriation
CHART does not recommend securities, funds or trades. Figures can be revised by their publishers. Do your own research and consider regulated advice before allocating capital.
Sources
Every headline number traces to a named publisher. Contextual sources inform the essay, not the key stat.
- 01PrimarySIPRI2026-04Trends in World Military Expenditure, 2025
World military spending $2,887 billion in 2025, +2.9% real, 11th consecutive rise.
- 02CorroboratedSIPRI2026-04-27Global military spending rise continues as European and Asian expenditures surge
US $954bn; China $336bn; Russia $190bn; Europe $864bn (+14%).
- 03PrimaryCongressional Budget Office2026-03-30The Federal Budget in Fiscal Year 2025: An Infographic
FY2025: net interest $970 billion; defense $893 billion; nondefence discretionary $980 billion; mandatory $4.2 trillion; deficit $1.8 trillion (5.8% of GDP); debt held by the public 99% of GDP.
Keep reading
The rearmament decade
World military spending hit $2.89 trillion in 2025. America spent less. Europe and Asia spent enough more to keep the global total rising.
$2.89 tn
World military expenditure, 2025
Interest now costs more than the Pentagon
In fiscal 2025 the United States paid $970 billion in net interest on the public debt. Defence cost $893 billion. The bond market is now a larger federal programme than the armed forces.
$970bn
US net interest, FY2025 (CBO)
From 70,300 warheads to 12,187
The world’s nuclear inventory peaked at about 70,300 in 1986. SIPRI counts 12,187 in January 2026. The line came down because America and Russia dismantled. The stockpile of usable weapons has stopped shrinking.
12,187
Nuclear warheads, Jan 2026