22 Sep 2020 - By
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European Defence Agency global defence trends

The European Defence Agency recently released its latest Defence Data report for 2018, which detailed spending by the 27 member states.

The report states total defence expenditure stands at €223 billion, which represents a 3% increase on 2017 and marks the fifth straight year of increased defence spending.

Overall defence spending by the 27 EDA Member States has almost returned to pre-financial crisis levels, €225 billion in 2007 compared to €223.4 billion in 2018.

 

EDA expenditure

The EDA believe that the increase in defence expenditure, comes from instability from the Ukraine and the destabilization of the MENA (Middle East and North Africa) region.

Despite the rise in total defence expenditure, spending on fulfilling collective benchmarks has failed to keep pace. Spending on areas where collective benchmarks have been agreed – Defence Investment; Defence Research and Technology; European Collaborative Defence Equipment Procurement; and European Collaborative Defence R&T – all still remain below 2008 levels.

There has, however, been recognition from member states that significant investment had to be made due to ageing military equipment and a lack of funding in defence research and development (R&D). Following the financial crisis of 2007/2008, investments in defence equipment procurement and R&D were dramatically hit – Between 2007 and 2014, defence investments decreased by 22%, reaching a record-low of €35.8 billion in 2014.

 

Defence spending is on the rise

Since 2014, defence investment – new equipment and R&D – has been slowly on the rise again, reaching €44.5 billion in 2018, representing 19.9% of Total Defence Expenditure against a collective benchmark of 20%.

The report also revealed that 14 Member States spent 20% or more of their defence budget on investment in 2018, up seven states from 2014’s number

Jorge Domecq, EDA’s Chief Executive, said: “It is extremely positive that defence budgets have almost fully returned to pre-financial crisis levels, with 2018 marking the fifth consecutive year of increased spending.

Our report is evidence that Member States have put a renewed impetus into defence spending after suffering heavily in the years following the financial crisis. Nevertheless, EDA’s findings do paint a mixed picture in terms of European collaborative defence, with a worrying fall in both equipment procurement and R&T spending in a European context.

“While European collaborative defence R&T still remains significantly below 2008 levels, it is encouraging that the value and number of ad-hoc R&T projects under EDA is increasing.”

 

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