Europe's Defense Shift: The Rocky Path to Strategic Autonomy

The transatlantic security relationships are facing the most profound upheaval since the founding of NATO in 1949. With the U.S. National Defense Strategy 2026 and the simultaneous demand from the Pentagon that Europe should take the lead in the conventional defense of the continent by 2027, a development has occurred that European defense experts have feared for years. The message from Washington is unequivocal: The era of the American security guarantee as a taken-for-granted constant in European defense planning is over.

This strategic realignment is taking place at a time when the global security architecture is under significant pressure. According to the International Institute for Strategic Studies (IISS), global defense spending reached a record $2.63 trillion in 2025—a real increase of 2.5 percent compared to the previous year. Europe is contributing significantly to this increase: Defense spending by EU member states rose by an impressive 12.6 percent in 2025 to €381 billion, which corresponds to about 2.1 percent of the combined gross domestic product. Thus, the European Union has more than doubled its defense spending since 2015.

Germany plays a central, albeit controversial, role in this transformation. The Bundestag approved a defense budget of over €108 billion for 2026—a sum that includes both the regular defense budget of €82.69 billion and funds from the €100 billion special fund for the Bundeswehr. This doubling of defense spending within a few years marks a dramatic shift for a country that has been known for its restraint in military matters for decades. Chancellor Friedrich Merz's term "war capability"—the ability to wage war in case of emergency—captures this new doctrine succinctly.

However, the sheer magnitude of the spending should not obscure structural deficits. General Michael Grynkewich, commander of U.S. European Command (EUCOM), presented a sobering assessment to the U.S. Senate in March 2026: Even if European NATO members consistently meet the agreed spending targets, Europe will not be able to take the lead in the conventional defense of the continent until around 2035. The deadline demanded by the Pentagon for 2027 is therefore completely unrealistic—a view that NATO Secretary General Mark Rutte indirectly confirmed when he warned in January 2026 that Europe should "keep dreaming" if it believes it can defend itself without the U.S. Rutte estimated the required defense spending for complete European autonomy at ten percent of GDP—a level that seems politically and economically hardly feasible.

The discrepancy between political demands and military reality is particularly evident in the area of critical capabilities. Europe remains highly dependent on American military resources: strategic airlift capabilities, satellite reconnaissance, precision munitions, air refueling, and—most importantly—nuclear deterrence. Building these capabilities would not only take decades but also require investments in the hundreds of billions. Additionally, there are significant gaps in the interoperability of European armed forces and in the defense industry, which has been characterized by fragmentation and national protectionism for decades.

The European Union has responded to these challenges with a series of initiatives. In May 2025, the EU decided for the first time to finance defense spending of its member states through joint debt issuance—a historic precedent that significantly deepened the federal integration of the Union. The SAFE loan program (Secure and Affordable Financing for Europe) with a volume of €150 billion was fully utilized in a very short time by 19 member states. Notably, there is an explicit preference for European defense manufacturers: American defense companies are excluded from most funding opportunities—a decision that pursues both economic and strategic motives and underscores the goal of a "Made in Europe" defense industry.

At the same time, the U.S. Congress has established the Baltic Security Initiative (BSI), a program that demonstrates how selective the American presence in Europe could be in the future. The BSI, which was funded with $200 million in 2026, focuses on defense cooperation with Estonia, Latvia, and Lithuania—those NATO allies that are geographically the most exposed and militarily the most vulnerable. The program requires the Baltic states to contribute financially in equal measure, thereby establishing the principle of burden-sharing at the bilateral level as well. Notably, Congress had to push this initiative through against the resistance of the Pentagon, which had originally planned cuts in support for the Baltic states.

This development reflects a fundamental shift in American defense strategy. The National Defense Strategy 2026 defines China as the primary strategic challenge and relegates Europe to a secondary priority. The document explicitly states that the combined GDP of European NATO members, at over $20 trillion, exceeds Russia's GDP of only $2 trillion by a factor of ten. From this, Washington concludes that Europe must take "primary responsibility" for its own conventional defense. The American security guarantee is thus not being revoked, but it is being reinterpreted from an automatic to a conditional commitment—dependent on the extent to which European allies enhance their own efforts.

The political reactions in Europe to this American shift in position vary widely. French President Emmanuel Macron, who has advocated for European "strategic autonomy" since 2017, sees his analysis confirmed. Germany, traditionally Atlantic-oriented, is visibly struggling with its new role as a potentially dominant military power in Europe—a position that is historically burdened and causes discomfort among neighbors like Poland and France. The New York Times reported in early March 2026 on growing concerns in European capitals about Germany's rapid rearmament, with the concern being less military than political in nature: A Germany that spends €108 billion on defense inevitably shifts the balance of power within the EU.

In parallel to the NATO-centered debate, the operationalization of Article 42.7 of the EU Treaty—the European mutual assistance clause—gains importance. The Chairman of the European Union Military Committee stated in February 2026 that the EU should define its obligation to assist for scenarios that fall "below the threshold" of Article 5 of the NATO Treaty. This targets the growing significance of hybrid threats: cyberattacks, disinformation, sabotage of critical infrastructure, using migration as a weapon, and other forms of influence that do not reach the threshold of armed attack but can still significantly jeopardize the security of European states.

The economic implications of this defense shift are being controversially discussed by economists. While increased military spending stimulates demand and employment in the defense industry in the short term, the long-term growth effects remain disputed. Long production cycles in the defense industry delay the economic multiplier effect, and structural weaknesses in European economies—low productivity gains, demographic change, high public debt—are not resolved by military spending but may be exacerbated. The European Central Bank estimates that a permanent increase in defense spending by 0.37 percent of GDP—a conservative assumption given current developments—would largely be growth-neutral, as displaced civilian investments and consumption would offset the military demand impulse.

However, the greatest challenge for Europe lies not in the financial realm but in the political dimension: the establishment of a genuine European defense union that can make strategic decisions, manage resources collectively, and act quickly and cohesively in times of crisis. EU member states remain sovereign in defense matters—a principle that collides with the operational necessity of integrated military command structures. The fragmentation of European procurement into 27 different national programs leads to enormous inefficiencies: different weapon systems that are not compatible, redundant development programs, lack of economies of scale, and ultimately higher costs with lower performance.

The Commission White Paper on the Future of European Defence, which forms the basis for recent initiatives, explicitly acknowledges these problems and calls for a "disruptive innovation" in the European defense industry as well as significant improvements in military mobility—the ability to quickly deploy troops across borders. Both areas are central to the credibility of European defense, but their implementation requires profound reforms of national bureaucracies and the removal of legal obstacles that have grown over decades.

The coming years will show whether Europe is capable of making the leap from an economic to a security power. The financial resources are being provided—the €381 billion that Europe spent on defense in 2025 is a clear signal. But money alone does not create capabilities or strategic clarity. Europe must decide what kind of power it wants to be: a junior partner of the U.S. hoping for American leadership, or an independent strategic actor that largely guarantees its own security. The American National Defense Strategy 2026 has not brought about this decision, but it has dramatically increased its urgency. The window for an orderly transition is narrow—General Grynkewich's forecast of 2035 as the earliest possible date for European defense capability leaves little room for further delays.