Europe increases defense spending, boosting military procurement and supporting national defense industries.
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Military spending is increasing across Europe, with France aiming for 69 billion euros and Germany allocating around 58 billion euros in 2023, while the UK exceeded 60 billion euros and Italy spent 28 billion euros. Total European defense spending is projected to reach 400 billion euros by 2025, supporting NATO’s 2% GDP defense target, which several countries, including Lithuania, are already surpassing. Lithuania spent nearly 6.1 billion euros on defense between 2022 and 2024, with the 2024 budget representing 3.2% of GDP. Increased funding allows for greater investment in modern weaponry, with the largest portion of acquisitions between 2022-2024 going to weaponry and military equipment (about 46%), followed by ammunition (about 35%). Major defense producers in Europe include France, Germany, Italy, and the UK, which are also key players in NATO and the EU. Lithuania primarily procures from the US (about 20% of contracts), followed by Germany (over 10%), and then Norway, with purchases also made from France, the UK, and the Netherlands. A significant portion of defense spending remains within the Lithuanian economy, with at least 62% spent on domestic goods and services, and the national defense industry is growing. Heightened tensions are prompting Baltic and neighboring countries to strengthen their defenses, with Poland being a leading example, having signed contracts worth billions for air defense systems, heavy artillery, and unmanned aerial vehicles.
