McKinsey Insights on Europe
Fresh insights and analysis on the region’s most pressing issues
Five catalysts to transform Europe’s defense
Europe stands at a pivotal moment in its defense transformation. Faced with an evolving security landscape, NATO members are making their most significant commitment since the Cold War to strengthen collective deterrence and resilience. By 2035, Europe aims to allocate 5 percent of GDP to defense and security—3.5 percent for core defense and 1.5 percent for broader security needs, such as protecting critical national infrastructure. Exhibit 1 shows the sharp acceleration from today’s 2.4 percent, with spending projected to reach 2.9 percent by 2030, or roughly €800 billion.
Defense budgets have already doubled since 2019, growing by nearly €250 billion. Over the next five years, they are expected to rise by an additional €300 billion—underscoring the scale and urgency of Europe’s defense transformation.
