Europe's Defense Policy Turning Point 2026: Germany's Historical Rearmament and the E6 Initiative in the Shadow of the Transatlantic Crisis

On March 26, 2026, NATO presented its annual defense spending report. The figure that caught the attention of European security policymakers: European allies and Canada increased their defense spending by twenty percent in 2025. This is the strongest increase since the end of the Cold War. However, this increase is not only a reaction to the ongoing war in Ukraine – it marks a fundamental reorganization of the European security architecture, the contours of which are becoming increasingly clear in the spring of 2026.

The dynamics of this development are nowhere more visible than in Berlin. The German Bundestag passed a defense budget in November 2025 that is unprecedented in the post-war history of the Federal Republic. The total volume amounts to over 108 billion euros – composed of 82.69 billion euros in the regular individual plan 14, as well as an additional 25.5 billion euros from the special fund for the Bundeswehr established in 2022. Compared to the previous year, this represents an increase of nearly 32 percent. Chancellor Friedrich Merz reaffirmed at the World Economic Forum in Davos on January 22, 2026, the goal of raising German defense spending to five percent of GDP – a figure he described as "necessary for the enforcement of European sovereignty." The budget is accompanied by a procurement plan from the Ministry of Defense, which envisions a contract volume of over 350 billion euros for armaments by 2041. The strategic objective is unequivocal: the Bundeswehr is to be developed into the "strongest conventional army in Europe," according to the Chancellor.

In parallel to this national effort, Berlin is advancing an initiative that could fundamentally change the institutional framework of the European Union. On January 28, 2026, Federal Finance Minister Lars Klingbeil and his French counterpart Roland Lescure invited the finance ministers of Poland, Spain, Italy, and the Netherlands to a video conference to establish the so-called E6 format – a core group of the six largest European economies. Klingbeil articulated the concern in an invitation letter, which Defense News has obtained, with unusual directness: "Europe must become stronger and more resilient. Work on this must be accelerated in all dimensions. A continuation as before is not an option." The agenda includes four focal points: enhanced coordination of defense spending, anchoring defense as a priority in the next multiannual EU budget framework, creating a savings and investment union, and securing critical raw materials. The concept of a "Europe of two speeds" is not new in the EU, but its application to defense policy – traditionally a domain of national sovereignty and the EU consensus principle – represents a paradigm shift.

The E6 initiative is embedded in a network of bilateral agreements that Berlin is forging with strategic partners. On January 27, 2026, Merz and Italian Prime Minister Giorgia Meloni signed a German-Italian "Protocol on an Action Plan for Strategic Cooperation." The document commits both nations to "urgently and jointly achieve European defense readiness by closing capability gaps and strengthening the European pillar in NATO." Specifically, cooperation was agreed upon in the areas of integrated air and missile defense, unmanned systems, naval platforms, electronic warfare, and possibly a joint land combat system. At the same time, Berlin is deepening cooperation with Warsaw: In November 2025, Merz announced that Germany and Poland would conclude a new defense policy agreement in 2026. The Bundeswehr is already intensifying joint exercises with the Polish armed forces and expanding cooperation in drone detection and neutralization.

This development is taking place against the backdrop of an increasingly fragile transatlantic security relationship. Former U.S. President Donald Trump, who threatened to withdraw from NATO during the 2025 election campaign and declared the transatlantic partnership "dead," triggered a shock in Europe, the effects of which continue to shape the strategic debate today. Although the acute risk of withdrawal seems to have been alleviated with the inauguration of the new U.S. administration in January 2026, the experience of the alliance's vulnerability has fundamentally changed European risk perception. The question of whether Europe can rely on American security guarantees in a crisis is no longer considered theoretical.

At the pan-European level, numbers underscore this strategic shift. According to consolidated EU data, defense spending by the 27 member states reached a volume of 343 billion euros in 2024, corresponding to 1.9 percent of GDP. For 2025, an increase to an estimated 381 billion euros (2.1 percent of GDP) is expected. Particularly noteworthy is the shift towards investments: Spending on equipment and infrastructure amounted to 106 billion euros in 2024 – an increase of 42 percent compared to the previous year – and is expected to exceed 130 billion euros in 2025. Procurement spending alone was 88 billion euros in 2024, with an expected increase to over 100 billion euros for 2025. At the NATO summit in The Hague in June 2025, allies also agreed on a new target: five percent of GDP for defense and security by 2035, divided into 3.5 percent for core defense and up to 1.5 percent for other security-related expenditures.

At the same time, the EU is making significant efforts to make the increase in resources more efficient through joint procurement and industrial coordination. In May 2025, the Council adopted the SAFE (Security Action for Europe) instrument with a volume of 150 billion euros for joint procurement programs and strengthening the defense industrial base. In January 2026, the Commission approved the first SAFE plans for eight member states. Additionally, the European Defense Industry Program (EDIP) came into force in December 2025, equipped with 1.5 billion euros in grants for the period 2025 to 2027, including 300 million euros for a special Ukraine support instrument.

Nevertheless, the gap between political will and industrial reality remains considerable. Europe's defense industry is reaching production limits: Higher budget allocations do not automatically translate into faster deliveries, especially when multiple states compete for the same types of munitions, air defense systems, and platforms. Moreover, the ambitious German-French armaments project FCAS – the Future Combat Air System, which aims to produce Europe's next-generation combat aircraft – is currently burdened by a blockade between Berlin and Paris. These tensions illustrate the central dilemma of European defense policy: The recognition of the necessity for joint action has rarely been greater, yet national industrial interests remain strong.

In the spring of 2026, Europe stands at a crossroads in defense policy. The financial and institutional dynamics are historically unprecedented, but they are overshadowed by three central risks: the unresolved question of transatlantic burden-sharing, the danger of fragmentation of the European project through multi-speed formats, and the uncertain ability of the industry to translate political intentions into deployable capabilities. The coming months will show whether European capitals can develop sustainable strategic autonomy from the current urgency – or whether the current increase remains a cyclical episode in the long cycle of European security policy.