Germany has overtaken the United Kingdom to become Europe's biggest defence spender, according to a revealing report published on Monday. The Stockholm International Peace Research Institute (SIPRI) said Germany’s military expenditure reached £67.8 billion (€77.8 billion, 2.19% of GDP) in 2024, compared to the UK's £63.5 billion (€71.9 billion, or 2.35%). The figure puts Germany ahead of all other European nations and fourth globally, behind only the United States, China and Russia.

The surge was driven by a £87.2 billion (€100 billion) off-budget fund created to modernise the German military following Russia’s full-scale invasion of Ukraine in 2022, said Lorenzo Scarazzato, a researcher at SIPRI. Elsewhere in Europe, Ukraine and France were the next biggest spenders, both recording military budgets of £50.3 billion (€56.9 billion).

SIPRI’s report showed that every European country except Malta increased its defence budget in 2024, with spending across the continent rising to levels not seen since the Cold War.

The biggest annual increases came from Romania, where spending rose by 43%, the Netherlands (35%), Sweden (34%), and the Czech Republic (32%).

Mr Scarazzato said: "The latest policies adopted in Germany and many other European countries suggest that Europe has entered a period of high and increasing military spending that is likely to continue for the foreseeable future."

Despite the sharp rise, Germany and several other NATO members are still struggling to meet key alliance spending targets.

NATO currently expects its members to allocate at least 2% of GDP to defence – a figure whicih US President Donald Trump is pushing to raise to 5%.

A highly anticipated NATO summit in The Hague this June is expected to finalise a new target, with diplomats indicating a compromise somewhere between 3% and 3.5% could be agreed.

By comparison, American military spending hit £758 billion (€876.5 billion) in 2024, making up 66% of NATO’s combined defence spending and 37% of global military expenditure.

Poland has been the standout performer in Europe, raising its defence spending by 31% year-on-year to reach £28.9 billion (€33.4 billion) in 2024.

NATO estimates that Warsaw allocated 4.07% of GDP to defence last year, based on 2021 prices and exchange rates — far exceeding the current 2% benchmark.

In an effort to sustain higher spending levels, Germany's Bundestag has passed a constitutional amendment exempting military spending exceeding 1% of GDP from borrowing limits imposed by the country's ‘debt brake’ fiscal rules.

However, Berlin has yet to produce a clear plan on how it will use this new financial flexibility to further boost its military capabilities.

The SIPRI report suggests that while Germany’s renewed focus on defence is significant, the gap between policy announcements and practical rearmament still remains wide.

Non-NATO member Ukraine currently spends 34% of its GDP on defence, and Russia 43%.