Geopolitics Review Extra - 17th July 2025
Europe and Defence - A Shift In Focus
Contents
Introduction
European Defence Today
European Defence Tomorrow
Concluding Remarks
Bitesize Edition
Remaining on the topic of the European Union, today we’ll move our focus to the realm of defence. Europe has recently learned a vital lesson at the hands of Donald Trump: You cannot rely on other nations for your own security.
Now that the United States’ security umbrella is no more, Europe has to determine its own military and security future. The war in Ukraine has made Europe especially aware of the consequences of not having the capabilities to defend itself. This pursuit will involve dramatic changes, especially with conflict in the modern day being so hybrid in nature.
Outside of Ukraine, other flashpoints remain, such as infrastructure warfare flashpoints in the Baltic Sea and political flashpoints between EU members. Europe will have goals that it wants to achieve in this new era of European rearmament, but this pursuit won’t occur without hiccups. The biggest questions I’ll ask in today’s post are what issues will Europe have to contend with as it heads down the road to rearmament, and does Europe have the capabilities to achieve any of its goals in the first place? Find out more below.
Introduction
Recent changes in attitude towards defence have unfolded since Trump reentered the White House. He wants NATO allies to hit 5% of GDP spent on defence. Trump has also flip-flopped frequently on his policy towards Ukraine. Sometimes, he opts to send them weapons in a message to Putin, and at other times, he attempts to signal to Russia and Putin that the door is open for negotiation by not sending Ukraine support and weapons.
Ultimately, Russia and Putin won’t negotiate in good faith because they’re not incentivised to. They are slowly advancing further into Ukraine, and so if they are to be incentivised to pursue peace, the reward must be far greater than the potential prospect of Russia controlling Ukrainian territory, at least to the count of the four oblasts Donetsk, Luhansk, Zaporizhzhia, and Kherson.
Today, I’m going to dive into the current reality of the defence industry in Europe. I’ll then explore the future issues and consequences of the geopolitical moves we’re seeing being made today. Will Europe remain tied to the United States militarily because they have no other choice, or will it forge its own supply chains and its own security? Let’s dive in.
European Defence Today
23 members of the European Union are also members of NATO. So, to begin, let’s explore what percentage of gross domestic product these nations spend on defence.
As I mentioned in the introduction, Trump wants NATO members to hit 5% of GDP. Let’s look at some specific examples from this Visual Capitalist dataset above. Who is well on the way to 5%, and who is lagging behind? More importantly, what reasons are leading some nations to spend more on defence than others?
In 2024, the highest percentage of GDP spent on defence by NATO countries is in Poland, at 4.1%. Poland is rapidly emerging as a geopolitical power and a leader in Europe. They border Ukraine and Belarus, and so the consequences of the war in Ukraine are a direct issue that they have to consider. In this power-based world order that Trump has accelerated the progress towards, power recognises power. Hence, military strength recognises military strength, and possessing such strength will be a deterrent. This is one such aspect of European defence that Poland recognised before anybody else.
This trend is also seen in the Baltic states of Estonia, Latvia, and Lithuania. The percentage of GDP spent on defence is 3.4% for Estonia, 3.2% for Latvia, and 2.9% for Lithuania. Estonia and Latvia border Russia itself, and Lithuania borders Belarus and the Russian exclave of Kaliningrad on the Baltic Sea. But the Baltics aren’t only motivated by sharing a land border with Russia. The larger percentages of defence spending seen here are also driven by moves in the Baltic Sea. For years, we’ve seen the battlefields of modern war expand and grow more hybrid. In the Baltic Sea, infrastructure war is rife. The most significant event was the destruction of the Nord Stream pipeline in September 2022. However, since then, data cables, fibre optic cables, and communication cables have frequently been cut and sabotaged. I discussed this in detail back in March.
The United States pulling back from Europe has triggered a rearmament movement. Trump called for 5% of GDP spending from European nations, and Trump’s threats to pull back support, especially for Ukraine, taught the Europeans a valuable lesson: You have to be responsible for your own necessities. In this world where power is growing in importance, one such necessity is your own security. When the United States confiscated Russian FX reserves held in dollars at the start of the Ukraine invasion, the United States unknowingly started the slow, decade-long de-dollarisation process. With these latest moves in the defence industry, they have started the slow end of the US’s role as a global policeman. Even if in the future, the United States enacts a different strategy under a different President, and seeks to once again provide Europe with security, the lesson learnt will remain in Europe. They won’t rely on external support for security. Ironically, in expanding their military power and rearming, the Europeans will likely turn to the United States to purchase advanced weaponry. In the short term, Trump has enacted a strategy where his only option is to win because he has raised the demand for US weaponry. However, if one day in the future, Europe manages to establish its own extensive military supply chains, the United States will suffer in the long term from reduced weapons sales. For the United States, this is short-term gain, for long-term pain; a clear sign of a declining empire focused on short-term fixes rather than long-term growth.
So, the European defence industry is experiencing its biggest shake-up since the end of the Cold War. Flashpoints are emerging, internal tension is rising, and centuries of history imply that Russia and Europe could once again be set to clash. As we look forward, what could Europe’s goals be? In pursuit of these goals, what will be the biggest issues that Europe will have to navigate, and will it have the tools to navigate them successfully?
European Defence Tomorrow
Firstly, we need to determine what are Europe’s goals here?
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