A German soldier trains with an M4 carbine rifle in Grafenwoehr, Germany, March 18, 2026. Germany spent more than 2% of GDP on defense in 2025, the first time since 1990, according to data published Monday by the Stockholm International Peace Research Institute. (Collin Mackall/U.S. Army)
STUTTGART, Germany — Military spending in Europe last year increased at its fastest pace in nearly three-quarters of a century, according to a new analysis that also showed American expenditures declining in 2025.
While the United States remains by far the biggest individual military spender, its total of $954 billion marked a 7.5% drop from 2024, the Stockholm International Peace Research Institute said in its annual report published Monday.
The decline was primarily related to a halt in new military assistance to Ukraine last year, the report said. But it may be short-lived, with a new U.S. budget proposal calling for defense spending of $1.5 trillion.
Globally, military outlays climbed to $2.8 trillion, accounting for 2.5% of gross domestic product overall. The top three spenders — the United States, China and Russia — accounted for 51% of that total, with a combined figure of $1.4 trillion, the report said.
Meanwhile, European defense expenditures drove much of the global increase, the report said.
“In 2025 military spending by European NATO members rose faster than at any time since 1953, reflecting the ongoing pursuit of European self-reliance alongside increasing pressure from the United States to strengthen burden sharing within the alliance,” researcher Jade Guiberteau Ricard said.
Germany spent $114 billion on defense in 2025, according to recent data from the Stockholm International Peace Research Institute. (Hunter Carpenter/U.S. Army)
NATO’s European members spent a combined $559 billion in 2025. Germany led the way with a 24% year-on-year increase to $114 billion. It also spent more than 2% of GDP on defense for the first time since 1990.
The rise of Germany as a military power is a marked turnaround from just a few years ago when the country was widely regarded as a defense spending laggard and security free rider by its critics.
President Donald Trump, particularly during his first term, frequently singled Germany out for criticism over the issue.
Now, top Defense Department officials have heaped praise on Germany, which last week issued a new defense strategy calling for development of Europe’s strongest land force in the next decade.
The push comes amid fears that Russia could turn its attention to NATO’s eastern flank once its war in Ukraine ends.
Worries about a drawdown of U.S. forces on the continent or reduction in the level of American commitment to NATO also have added to the sense of urgency.
As spending has ramped up, so has Germany’s defense industrial base, with manufacturers opening new factories and converting old ones to churn out ammunition.
Armin Papperger, CEO of German weapons producer Rheinmetall, said last week that the company has increased its production capacity for military trucks from 600 to 4,500 per year, for medium-caliber ammunition from 800,000 to more than 4 million rounds and for artillery from 70,000 to 1.1 million rounds.
Germany now has more production capacity for conventional ammunition than the United States, Papperger told the crowd at an event in Hamburg, as quoted by the German Press Agency.
