Germany tops the rankings in Europe World in Crisis Mode: Military Spending Hits Record High

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The world continues to pour record sums into the military — driven by wars, insecurity and geopolitical tensions. Germany tops the European ranking, and there is no sign of an end.

Never before has so much money been spent on the military as in 2025. Driven by numerous wars and conflicts, global military expenditure reached a new high for the eleventh consecutive year, the Stockholm International Peace Research Institute (SIPRI) reports. Inflation‑adjusted spending rose by 2.9 per cent compared with the previous year and has grown by 41 percent over the past decade.

Together, states spent some $2.89 trillion (about €2.47 trillion) on the military in 2025. However, the increase was substantially smaller than in 2024, a change the researchers attribute mainly to a fall in US military spending — chiefly due to reduced aid for Ukraine. At the same time, the US invested more in its own nuclear and conventional capabilities.

Despite the decline, the US remained by far the largest spender on defence, at roughly €814 billion (converted). SIPRI expert Diego Lopes da Silva warned the figure is likely to rise again: “The US has already announced plans to increase its defence spending.”

Insecurity fuels arms spending

SIPRI attributes the overall rise in 2025 primarily to rearmament in Europe: European states’ defence budgets rose by 14 per cent last year.

The uncertainty about whether the US will remain a reliable NATO partner in future appears to have played a role for many countries, da Silva said. “When international security deteriorates, it creates an atmosphere of uncertainty — and to feel more secure, states put more money into their militaries.”

Greenpeace criticised the high European spending: “This course is taking us in the wrong direction,” said disarmament expert Barbara Happe. “True security grows from civil crisis prevention, climate protection and social justice, not ever‑new spirals of armaments.” In Germany, she said, climate protection and social justice were being neglected while billions flowed into rearmament.

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Germany tops the rankings in Europe

Germany ranked fourth among the countries with the highest military spending — behind the US, China and Russia, but ahead of all other European states. German defence spending rose by 24 percent year‑on‑year to $114 billion (around €97 billion). For the first time since 1990, Germany’s defence outlays thus exceeded NATO’s two‑percent‑of‑GDP guideline. Overall, SIPRI found that 22 European NATO partners surpassed that threshold.

Russia and Ukraine increased military spending again in the fourth year of the war. In Ukraine, military expenditure accounted for a staggering 40 per cent of GDP — an even higher share than in 2024. SIPRI reports that more than 60 per cent of government spending went to the military. “That is an enormous share of public expenditure, and it is hard to imagine it rising further without basic public services suffering,” da Silva said.

Spending rises in Asia, modest changes in Middle East

Military expenditure also rose in several Asian states such as China, Japan, Taiwan, India and Pakistan amid multiple tensions. In the Middle East, spending increased only slightly in 2025; in Israel it fell, which SIPRI attributes to a reduced intensity of the Gaza conflict after the January 2025 ceasefire with Hamas.

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Inflation‑adjusted military spending in Iran fell due to the country’s difficult economic situation, SIPRI says; without adjusting for inflation the figures rose. “Official numbers almost certainly underestimate true spending,” SIPRI expert Zubaida Karim warned. “Iran also uses oil revenues not shown in the budget to fund its military, including production of missiles and drones.”

Trend likely to continue into 2026

SIPRI researcher da Silva expects the upward trend in military spending to continue in 2026. “There are currently very many conflicts worldwide, and it is hard to imagine conditions improving so much within a year that the trend would reverse,” he said. Besides the war in Ukraine, attention is focused on the Iran conflict that the US and Israel began to strike in late February; Iran responded with attacks on Israel and US allies in the Gulf. The repercussions for global trade are visible worldwide — and the current ceasefire changes little about that.

SIPRI’s annual report on global military expenditure is regarded as the most comprehensive of its kind. Its figures include personnel costs, military aid and spending on defence research and development.