Defence budgets surge across EU in 2020, but collaborative spending falters

Total collective defence spending across the 26 European Defence Agency (EDA) member states reached a record EUR198 billion (nearly USD223 billion) in 2020, a 5% rise compared with 2019 and the highest level since 2006, according to the agency's latest annual defence data survey released on 6 December. However, spending on joint defence procurement and research among the countries continues to decline.

The overall surge in EDA members' collective defence spending marks the sixth year of consecutive growth – and a rebound from the countries' low point in 2014 of only EUR159 billion. All EU countries, save Denmark, belong to the agency.

Collective defence investment, a crucial spending indicator, also hit a new high of EUR44 billion in 2020, or 5% more than the previous year. Moreover, it equalled 22% of the countries' total defence expenditure, placing them for the second year in a row above their agreed 20% collective benchmark for investment in defence capability and research.

Of that EUR44 billion, 83% (more than EUR36 billion) went towards equipment purchases, with the balance devoted to research and development. Of the latter, the EDA reported a record EUR2.5 billion was allocated to defence research and technology (R&T) in 2020, driven by France and Germany, which together accounted for more than 90% of the increase. Indeed, the Franco-German locomotive pulled the 26 EDA countries' total defence R&T spending beyond 1% for the first time since 2014.

However, the picture is less rosy for joint defence investment and research efforts between EU countries. As the agency noted in its report, spending on collaborative projects “does not seem to be a priority” for a majority of EDA members.