Europe faces large ‘shortfalls’ in its defence: report

Europe has wide “shortfalls” in its military capabilities which leave it “ill-prepared” as the war in Ukraine grinds on, a new report said Tuesday.

With the new security strategy of US President Donald Trump’s administration forcing European countries to rethink defence policies, four years of war in Ukraine has spurred efforts to boost military capabilities, the International Institute for Strategic Studies (IISS) said in its annual report.

The 2026 edition of the Military Balance report by the London-based institute notes that the United States is seeking to refocus its efforts on protecting its own territory.

As a result, the US leader continues to push allies for “greater burden-sharing” in military spending, both in Europe and in the Asia-Pacific region in response to China’s growing influence.

In 2025, global military spending rose by 2.5 percent to $2.63 trillion, a slower pace than over the past five years.

This was partly due to a drop in the US defence budget — a decline unlikely to last, with the Trump administration’s defence spending expected to exceed $1 trillion in 2026 for the first time.

Part of that will notably fund America’s “Golden Dome” missile defence shield project, the IISS said.

In contrast, military spending continued to grow at “record levels” in Europe, reaching $562.9 billion — up 12.6 percent in a year — driven by Germany.

NATO countries, under pressure from America and facing an increased threat from Russia, have pledged to raise national defence budgets to 5.0 percent of GDP by 2035.

But they could be constrained by their “limited fiscal headroom”, the IISS warned.

Source: Insider Paper