The Wager

European defense spending in 2025 reached its fastest growth since 1953. The bet that drove it was placed before the threat it confirmed arrived.

geopolitics

Germany crossed 2 percent of GDP last year — 2.3 percent for defense spending, the first time the figure has cleared that threshold since 1990. Spain crossed it too: first time since 1994. Twenty-two of twenty-nine European NATO members met the 2 percent target in 2025. Europe’s total military expenditure rose 14 percent, the fastest rate of growth since 1953.

Those are the headline numbers from the Stockholm International Peace Research Institute’s annual report, released Monday. They describe what happened. They do not describe the reasoning that preceded it.

The Hague Investment Plan was adopted at the NATO summit in June 2025. It was a formal commitment: European members would sustain defense spending at or above 2 percent, build autonomous capacity, reduce dependence on US provision for European security. The commitment was made before the Iran war. Before Elbridge Colby’s email listing a review of UK sovereignty over the Falklands as a potential pressure tool. Before the Strait of Hormuz was blocked and the United States declined to invoke allied-defense commitments for Gulf states under attack on their own soil.

The Investment Plan was not a response to these events. It preceded them. The bet was placed, and then the confirmation arrived — through a scenario that Europeans had not specifically prepared for.

European rearmament since 2022 has been oriented toward the eastern flank: tanks, artillery, air defense, ammunition production. The Iran war is not an eastern-flank war. The United States remains the world’s largest military spender at $954 billion — larger than the next ten combined. The argument for European autonomous investment is not that Europe will replace US capacity. It is that European security decisions can no longer be made as though US engagement is guaranteed regardless of theater, timing, or administration.

The Iran war confirmed the underlying logic not by activating European eastern-flank systems but by demonstrating, through a different theater and a different axis, that the bet was correct. The validation is not material. It is logical.

When a bet is validated by the specific scenario it prepared for, one explanation is good targeting: you anticipated the right threat. When a bet is validated by a different scenario entirely, targeting doesn’t explain the correctness. The logic does.

Scenario-specific validation fails the test of generalization. If the threat modulates, the validation is contingent on the threat’s persistence. The European defense investment in 2025 passed a harder test: the threat shifted, and the underlying argument held anyway. Seven of twenty-nine European NATO members still fall below 2 percent. The investment is not complete. But the direction is settled, and the reasons are now structural rather than contingent on any single adversary or any single administration.

Spain increased defense spending by 50 percent in a single year to reach 2 percent. Germany increased by 24 percent to reach 2.3 percent. These are not marginal adjustments. They are registered in the years attached to them. The last time Germany allocated this fraction of its national resources to defense, the Wall had just come down. The last time Spain did, it was computing a guarantee that looked permanent. In both cases, the computation lasted thirty years. Its correction happened before the proof arrived.

Sources

- Solen