European governments are preparing for a sustained increase in defence spending, raising a key economic question. Can rearmament also support growth at a time when the eurozone economy is struggling to gain momentum?
Germany is at the centre of this shift. Berlin plans to lift defence spending to almost 3.5% of GDP by 2029, up from 2.1% in 2024, marking one of the most significant military investment programmes in post-war Europe. By 2029, the government aims to spend more than €100bn annually on defence equipment and maintenance.
