Russian military spending increased by more than 40 per cent last year, outpacing all of Europe as the US calls for Nato countries to do more to protect their own borders.
When adjusted for purchasing power parity, which takes into account what currencies can buy in their own countries, Russia spent more than all of Europe combined, according to figures from The Military Balance, an annual comparison of the strengths of armed forces around the world.
The figures were published as Pete Hegseth, the new US defence secretary, said European allies must spend more than America on protecting their own borders and that Nato needed to be a “more lethal force” and “not a diplomatic club”.
The Pentagon chief held his first bilateral with John Healey, the defence secretary, on Wednesday morning.
They were expected to discuss how Europe could do “more of the heavy lifting” and how to tackle waste so spending was focused on getting ready for war, a British defence source said.
Hegseth, a former officer in the Minnesota National Guard, started his European trip at a US military base in Germany on Tuesday, where he told reporters: “We’re going to have straight talk with our friends.”
“The European continent deserves to be free from any aggression, but it ought to be those in the neighbourhood investing the most in that individual and collective defence,” he said.
Hegseth wrote on X after arriving at Nato headquarters: “Our commitment is clear: Nato must be a stronger, more lethal force — not a diplomatic club. Time for allies to meet the moment.”
Germany’s 23.2 per cent increase in spending means only the US has a bigger national defence budget within Nato, according to the figures compiled by the International Institute for Strategic Studies (IISS).
Behind the US on the global stage is China, followed by Russia. Germany spent $86 billion, overtaking the UK, which spent $81.1 billion and had the fifth highest defence budget for 2024.
Russia’s military expenditure has increased by 41.9 per cent over the past year. Adjusted for purchasing power parity, this amounts to an increase to $461.6 billion, which is more than the whole of Europe spent.
In 2023 the US had the biggest defence budget, followed by China, Russia, India and then the UK, which was the largest defence spender in Europe, spending $73.5 billion. Germany seventh, spending $63.7 billion on defence.
In real terms, European defence spending is nominally 50 per cent higher compared with 2014, although experts said the “overall picture is more complicated”.
“With budget pressures in most European countries continuing, sustaining increased spending is likely to be challenging,” the book’s authors said.
The burden is not broadly shared, with some Nato countries spending above 3 per cent of national income, while others remain below the 2 per cent target.
Current Nato defence spending stands at $1.44 trillion, with Europe’s $442 billion representing less than one third of the total.
Washington’s allies are waiting nervously for clarity from President Trump’s administration after he demanded Nato more than double its spending target and vowed to end the war in Ukraine.
A commitment of 3 per cent across European members of the alliance would mean that that defence spending figure would increase by more than $250 billion, and almost $800 billion if 5 per cent were achieved, IISS noted. However, it said “such figures are unachievable at this time, with some countries using off-budget instruments to bolster budgets”.
The figures will make for uncomfortable reading in the British government, which has been trying to take a leading role in Europe when it comes to defence spending and support for Ukraine.
Although Labour has pledged to increase defence spending from 2.3 per cent of national income to 2.5 per cent, Sir Keir Starmer is yet to set out a timeline for doing so.
Yet Britain will chair a meeting of the Ukraine Defence Contact Group for the first time on Wednesday, after being asked to step in by the US.
The Trump administration requested that Healey convene the 26th meeting of the group, aimed at bolstering support for Ukraine, and is said to have told him that the UK should be leading Nato in Europe.
