European NATO members are undergoing the most significant defence procurement realignment since the Cold War. The catalyst is not external threat alone, but the structural uncertainty introduced by US policy signalling under the second Trump administration. European defence spending is projected to exceed $380 billion collectively by 2028, with procurement pipelines increasingly favouring European and allied suppliers over traditional US defence primes.
The Strategic Context
For seven decades, European defence policy operated on an implicit assumption: the United States would underwrite continental security through NATO's Article 5 guarantee. That assumption has not been formally revoked, but it has been sufficiently destabilised to trigger a structural reassessment across every European capital that matters.
The second Trump administration's public scepticism toward NATO's collective defence obligations — including the suggestion that the US would evaluate Article 5 responses on a case-by-case basis rather than treating them as automatic — has produced a policy environment where European strategic autonomy has shifted from aspiration to operational necessity. This is not a rhetorical exercise. It is now reflected in budget allocations, procurement contracts, and force structure decisions across the alliance.
The numbers tell the story. In 2024, only 23 of NATO's 31 European members met the 2% GDP defence spending target. By the end of 2025, that number had risen to 28. The remaining holdouts — Belgium, Luxembourg, and Spain — have published timelines for compliance by 2027. But the more significant development is not the 2% threshold itself, which was always a blunt instrument. It is the composition of the spending increase: the share allocated to equipment procurement versus personnel and maintenance.
The Procurement Pivot
Europe's defence procurement landscape is being reshaped by three concurrent dynamics.
First, the urgency of capability gaps. The war in Ukraine exposed critical shortfalls in artillery ammunition production, air defence systems, and precision-guided munitions. European stockpiles, designed for deterrence rather than sustained high-intensity conflict, were depleted within months of the initial Western support packages. The lesson was absorbed: Europe cannot rely on US production capacity to backfill its own deficiencies, particularly when US political will to do so is uncertain.
Second, the political economy of "Buy European." Defence procurement has always been as much about industrial policy as military capability. The current environment has given European governments political cover to redirect contracts toward domestic and EU-based manufacturers. KNDS (the Franco-German land systems consortium), Rheinmetall, BAE Systems, Saab, and Leonardo are the primary beneficiaries. Rheinmetall alone has seen its order backlog exceed €50 billion, with new contracts for the Panther KF51 main battle tank and expansion of its ammunition production capacity in Germany, Hungary, and Lithuania.
Third, the emergence of EU-level procurement mechanisms. The European Defence Industrial Strategy (EDIS), adopted in March 2024, established a framework for joint procurement that would have been politically unthinkable five years earlier. The European Defence Fund is now co-financing collaborative R&D projects in areas including next-generation air combat systems (FCAS/GCAP), hypersonic missile defence, and autonomous naval platforms. The EU's stated target: 50% of defence equipment procurement from European suppliers by 2030, up from approximately 20% in 2023.
US Defence Primes Under Pressure
The implications for US defence contractors are not catastrophic but are strategically significant. Lockheed Martin, Raytheon (now RTX), Northrop Grumman, and General Dynamics have built substantial European revenue streams over decades — particularly through the F-35 programme, Patriot missile systems, and the HIMARS family of rocket artillery.
These legacy programmes are not at immediate risk. Nations that have committed to F-35 procurement (the UK, Italy, the Netherlands, Norway, Denmark, Belgium, Finland, Poland) are locked into multi-decade sustainment contracts. But the next generation of European procurement decisions is where the shift becomes visible.
- Air defence: IRIS-T SLM (Diehl Defence, Germany) and NASAMS (Kongsberg/Raytheon hybrid) are gaining ground against Patriot for European layered air defence. The Franco-Italian SAMP/T system is being positioned as the European alternative for theatre ballistic missile defence.
- Armoured vehicles: Rheinmetall's Lynx and KNDS's EMBT (European Main Battle Tank) are increasingly preferred over US platforms for new European armoured brigade equipment programmes.
- Munitions: European ammunition production capacity is being expanded through dedicated EU funding mechanisms, explicitly to reduce dependency on US supply chains that proved politically unreliable.
- Autonomous systems: European drone programmes (Baykar's TB2 licence production, Airbus's Eurodrone, and a growing constellation of smaller tactical UAS manufacturers) are filling capability gaps that US systems were expected to address.
The Nordic-Baltic Acceleration
The most dramatic procurement shifts are occurring in Northern Europe. Finland and Sweden's NATO accession has created a Nordic-Baltic defence bloc with significant industrial capacity and a threat perception calibrated by geographic proximity to Russia.
Finland's defence procurement budget has increased by 40% since 2022. Sweden's total defence spending reached 2.2% of GDP in 2025, with the bulk directed toward naval capability (the A26 submarine programme) and the Gripen E fighter aircraft. Norway's defence plan through 2036 allocates $60 billion to modernisation, with priority given to maritime surveillance, long-range precision strike, and integrated air and missile defence.
The Nordic countries are also leading on defence technology cooperation with non-EU allies, particularly the UK post-Brexit. The UK-Norway-Sweden trilateral on naval autonomy and the Nordic Defence Cooperation (NORDEFCO) framework for joint procurement are producing tangible capability outcomes faster than EU-level mechanisms.
The era of Europe free-riding on American defence guarantees is over. The question is not whether Europe will spend more — it will. The question is whether it will spend wisely enough to build credible deterrence before the next crisis tests it. Senior NATO official, Munich Security Conference 2026
Poland as the Eastern Anchor
Poland has emerged as NATO's most ambitious procurement actor in relative terms. With defence spending projected to reach 4.7% of GDP by 2026 — the highest in the alliance — Poland is simultaneously pursuing:
- K2 Black Panther main battle tanks from Hyundai Rotem (South Korea), with technology transfer for domestic production
- K9 Thunder self-propelled howitzers, again with Korean production partnerships
- HIMARS systems from Lockheed Martin (one of the few US programmes still expanding in Europe)
- FA-50 light combat aircraft from Korea Aerospace Industries, as a bridge to eventual F-35 delivery
- Patriot and Narew air defence systems for integrated air and missile defence
Poland's procurement strategy is notable for its deliberate diversification. By sourcing from the US, South Korea, and European suppliers simultaneously, Warsaw is hedging against supply chain disruption from any single source while building domestic production capacity through technology transfer agreements.
The German Transformation
Germany's €100 billion special defence fund (Sondervermögen), announced in 2022, was supposed to be the catalyst for Bundeswehr modernisation. In practice, bureaucratic procurement processes and political hesitancy consumed the first two years with limited visible output. The fund is now projected to be fully committed by late 2026.
The more significant development is what comes after. The German government's February 2026 commitment to sustained defence spending above 2.5% of GDP — backed by constitutional amendment proposals to exempt defence spending from the debt brake — signals a permanent shift in German fiscal policy. If enacted, this would add approximately €30 billion per year to the European defence procurement market, with Rheinmetall, KNDS, Hensoldt, and Diehl Defence as primary beneficiaries.
Implications and Outlook
The European defence procurement realignment is not a temporary response to a difficult US administration. It is a structural adjustment driven by a bipartisan recognition — across European capitals — that the transatlantic security model of the past seventy years has been permanently modified.
The key variables to watch:
- EU Defence Bond proposal: If adopted, a common European borrowing instrument for defence would dramatically accelerate procurement timelines and scale. Currently under negotiation, with France and Italy pushing for adoption and Germany cautiously supportive.
- GCAP/FCAS convergence: The Global Combat Air Programme (UK-Italy-Japan) and the Future Combat Air System (France-Germany-Spain) remain separate sixth-generation fighter programmes. Any merger or cooperation agreement would be the strongest signal yet of European defence industrial consolidation.
- US response: If Washington perceives European procurement diversification as threatening to US defence industrial interests, retaliatory measures — ranging from technology transfer restrictions to ITAR complications — could complicate transatlantic defence cooperation further.
- Eastern flank readiness: The ultimate test of European procurement effectiveness will be whether the capability build-up produces credible deterrence on NATO's eastern border within a 5–7 year timeline. Force structure targets suggest this is achievable, but only if procurement execution matches political ambition.
The direction of European defence procurement is clear and unlikely to reverse regardless of the outcome of US domestic politics. The pace and scale of the build-up will depend on fiscal sustainability and industrial capacity constraints, but the structural drivers — threat perception, political will, and industrial policy alignment — are firmly established.
This analysis draws on open-source data from NATO, the European Defence Agency, national defence ministry publications, defence industry financial disclosures, and the Munich Security Conference 2026 proceedings. All assessments reflect the analytical judgement of PureTensor // Intel and do not represent the position of any government or organisation cited.