Germany Sets €110 Billion Defence Course

The idea that a ceasefire in Ukraine might ease the pressure on European militaries has faded. Putin has rejected serious negotiations, according to NV, citing Reuters. Allied governments are now budgeting on the assumption that the war will continue, and that changes the question in front of Europe. It is no longer simply whether countries can find the money. It is whether defence ministries and industry can turn that money into usable military strength before the war enters its next phase.

The Money Is Real

Germany is the centre of the fiscal shift. Chancellor Friedrich Merz has proposed a 2027 defence budget of €109.7 billion, about a fifth of federal spending, with another €11.6 billion for Ukraine (Bundesfinanzministerium). Berlin wants to reach NATO's 3.5% of GDP target by 2029, six years before the alliance's 2035 deadline (Deutschlandfunk).

Poland has already moved further. Warsaw spent almost 123.6 billion zloty on defence in 2025, including 42.4 billion for modernisation, and plans US weapons purchases worth more than 45 billion zloty in 2026 and 2027 (Defence24). These are not gestures for a summit communiqué. They lock governments into years of factory orders, weapons deliveries and political commitments that will run beyond any possible ceasefire.

The pace is uneven. Spain's Pedro Sanchez has rejected the 5% of GDP framework proposed by NATO secretary-general Mark Rutte, which would split the target between at least 3.5% for core military needs and 1.5% for resilience (NATO, El Mundo). Spain was the only ally to refuse it. Sanchez's argument is that allies should be judged by what they can field, not just by what they spend.

Slovakia's Robert Fico, who says he has direct channels to both Putin and Zelensky but has produced no visible result, plays a different role (Aktuality, Denník N). He matters less as a mediator than as political cover for governments that want to slow their military commitments while still talking about peace.

Where the Money Gets Stuck

The spending surge has exposed a production problem that finance ministries cannot solve on their own. Germany has stopped its F126 frigate programme after delays and cost overruns. The Eurodrone and FCAS fighter programmes remain behind schedule (ZEIT). Poland's prime minister, Donald Tusk, warned that the coming months could be "really critical", not because of an imminent full invasion, but because limited Russian provocations against infrastructure or borders could test whether NATO still responds as one (TVN24, BBC).

European and Canadian allies have pledged roughly €70 billion a year in military support for Ukraine across 2026 and 2027 (DW). EDIP, the EU defence-industry programme designed to place long-term orders for missiles, air-defence systems and drones, is meant to move Europe away from emergency buying and towards multi-year contracts (DG DEFIS). SAFE, the EU's €150 billion joint fund for defence procurement, is supposed to direct that demand towards European factories.

For countries such as Ireland, with a long tradition of military neutrality, this debate lands awkwardly. The EU is not just talking about spending more. It is building mechanisms that tie procurement, industrial policy and security policy more tightly together. That does not force Ireland into NATO-style defence planning, but it does make the European defence economy harder to stand outside.

The public still cannot tell whether any of this is making Europe readier. NATO capability targets, interceptor delivery timelines and ammunition stockpile levels remain classified. The Commission tracks inputs such as budget pledges and planned production lines, not outputs such as fielded units or readiness rates. According to Open Gate Italia, Italy cut its SAFE request from €14.9 billion to €5 billion, a sign that even governments formally signed up to the shift are hedging on how quickly they can absorb it.

The bottleneck sits between the ministers announcing budgets and the procurement agencies, shipyards and missile factories that have to deliver. Defence ministries sign contracts. Procurement offices handle specifications, testing and suppliers. Manufacturers set production timelines. When any part of that chain stalls, as Germany's frigate cancellation shows, the money sits there while units remain short of equipment.

European ministers can now count the money. They still have to show that it buys ammunition, interceptors and military units that Russia would have to take seriously.