A Comparative Analysis of UK and German Defence Spending Commitments
In an era defined by geopolitical turbulence, from Russia's invasion of Ukraine to rising tensions in the Indo-Pacific, NATO allies face mounting pressure to strengthen their defences. The alliance's June 2025 summit in Washington marked a pivotal moment, with members pledging to elevate collective security spending to 5 per cent of GDP by 2035 - comprising 3.5 per cent on core defence and 1.5 per cent on broader resilience. Both the United Kingdom and Germany have responded with ambitious commitments, yet their approaches diverge in pace, funding mechanisms, and priorities. This article examines these responses, detailing allocations and the capabilities they procure, before exploring lessons Germany might impart to the UK.
In February 2025, Prime Minister Keir Starmer announced a rise to 2.5 per cent of GDP by 2027, framed as a pragmatic step above NATO's longstanding 2 per cent benchmark. This built on 2024's 2.3 per cent outlay of £66 billion, already surpassing many allies. By June's NATO summit, however, external diplomacy prompted a bolder commitment: 5 per cent total by 2035, with 3.5 per cent ring-fenced for defence proper. For 2025, spending is projected at 2.4 per cent of GDP, equating to roughly £70 billion, with annual uplifts thereafter to meet the trajectory.
These funds are channelled through the Ministry of Defence (MoD), emphasising capital investment over personnel costs. By 2028-29, equipment procurement will claim 43 per cent of the budget, up from 35 per cent in 2023-24, while personnel dips to 29 per cent amid efficiency drives. Nuclear deterrence absorbs about 0.3 per cent of GDP annually, underscoring the UK's strategic focus on Trident renewal. The September 2025 Defence Industrial Strategy (DIS) further refines this, pledging £2.5 billion yearly for small and medium-sized enterprises (SMEs) to foster innovation and cut procurement delays, which average 20 months per project. Reforms include a "back British" offset policy, mandating suppliers to reinvest in UK jobs and skills, and streamlined acquisition for urgent needs like artillery upgrades.
In terms of capabilities, the UK's investments yield tangible enhancements. The Strategic Defence Review (SDR) 2025 prioritises interoperability with allies, funding joint procurement of next-generation fighters and submarines. Key buys include additional Challenger 3 tanks and Boxer armoured vehicles to bolster land forces, alongside Ajax reconnaissance platforms delayed by technical glitches but now accelerating. At sea, £10 billion in exports to Norway for Type 26 frigates signals domestic shipbuilding revival, while air defence gains from a £4 billion Polish deal for Sky Sabre systems. Cyber and drone capabilities receive £1 billion boosts, aiming for AI-integrated swarms by 2030. Overall, these procurements enhance power projection, with the Royal Navy's carrier strike group and RAF's Tempest programme positioning the UK as a global power rather than a purely continental player.
Germany's response, rooted in Chancellor Olaf Scholz's 2022 "Zeitenwende" (turning point) speech, has evolved into a more seismic shift. The initial €100 billion special fund - off-budget and debt-financed - targeted Bundeswehr modernisation but depletes by 2027, having disbursed €77 billion from 2025-27 alone. A January 2025 constitutional amendment suspended the "debt brake" for defence, unlocking further borrowing and paving the way for a €500 billion multi-year plan through 2035. The 2026 budget swells to €108.2 billion, with 2025 at €94 billion - a 28 per cent jump from 2024's €88.5 billion, propelling Germany past the UK as NATO's second-largest spender. Chancellor Friedrich Merz's coalition eyes 3.5 per cent of GDP by 2029, doubling spending within five years and aspiring to Europe's premier army by 2031.
Allocations prioritise hardware and readiness, with procurement reforms via the Bundeswehr Planning and Procurement Acceleration Act easing thresholds for swift buys. A €377 billion "wish list" outlines long-term acquisitions, funded by the special infrastructure budget and EU escape clauses. Manpower receives urgent attention, addressing a 20,000-soldier shortfall through recruitment incentives, while logistics and munitions stockpiles - lagging at 50 per cent readiness - claim substantial slices.
Capabilities procured reflect a continental pivot. October 2025 approvals greenlit seven major contracts, including €3.75 billion for 20 Eurofighter Typhoons with advanced sensors, plus F-35 integrations by 2026 for stealth enabled strikes. Land forces gain from Leopard 2A8 tanks and Puma infantry vehicles, enabling a full brigade deployment to Lithuania by 2027 - 4,800 troops strong. Air and missile defence surges via the European Sky Shield Initiative, replacing Patriots with indigenous systems, while € billions fund counter-drone tech amid Baltic incursions. Innovation hubs target AI, cyber, and unmanned systems, with joint ventures in Ukraine for drone co-production. By 2030, ten NATO-ready brigades will materialise, transforming the Bundeswehr from under-equipped to Europe's backbone.
Comparing Germany and the UK reveals stark contrasts. In 2024, the UK edged Germany on GDP share (2.3 per cent versus 2.0 per cent), but Berlin's velocity - fuelled by special funds - closes the absolute gap swiftly, hitting 3.5 per cent by 2029 against London's 2035 horizon. The UK leans equipment-heavy (36 per cent on major platforms, half nuclear); Germany balances hardware with personnel, its lower 48 per cent debt-to-GDP ratio (versus UK's 94 per cent) affording additional borrowing. Challenges unite them: procurement overruns plague both, exacerbated by global inflation, while the UK grapples with ballooning welfare bills and Germany with scaling from a decayed base. Yet, London's global remit contrasts Berlin's Euro-centric focus, delivering a Carrier Strike Group capability over massed armoured formations.
| Feature | UK (2025-2035) | Germany (2025-2035) |
|---|---|---|
| GDP Target | 2.5% by 2027; 3.5% core by 2035 | 3.5% core by 2029 (accelerated target) |
| Annual Budget (2025/26) | ~£62.2bn (~2.4% GDP) | €95bn (~2.4% GDP, incl. Ukraine aid) |
| Key Spending Focus | Nuclear deterrent (Dreadnought); Digitization; R&D (AI/Quantum) | Land force expansion; Integrated Air Defense (Arrow 3); Munitions |
| Major Capabilities | Type 26 Frigates, Challenger 3 tanks, GCAP (Tempest) fighters | Leopard 2A8 tanks, F-35A/Eurofighter, Sky Shield IAMD |
| Funding Mechanism | Foreign Aid reductions; Strategic Defence Review (SDR) offsets | Debt brake suspension; €100bn Special Fund (depleting 2027) |
Germany offers the UK instructive lessons amid these parallels. First, procurement agility: Berlin's acceleration act, raising direct-buy thresholds, has slashed timelines; Whitehall could adapt this to tame its 20-month delays, perhaps via emergency clauses. Second, funding innovation: Special funds bypass annual budgets, enabling €377 billion in locked commitments - a model for ring-fencing UK's SDR ambitions against other spending pressures. Third, manpower revival: Germany's recruitment overhaul, blending incentives with societal buy-in, counters the UK's personnel squeeze; integrating defence into national identity could sustain enlistment. Finally, collaborative edge: Ties with Ukraine for drone ventures accelerate tech transfer; the UK might emulate this for Indo-Pacific allies, blending exports with joint R&D.
Both nations are reinvigorating NATO's European flank, but Germany's urgency - born of historical reticence - outpaces the UK's rather sluggish response. As threats evolve, emulating Germany’s boldness could significantly enhance the UK’s defence posture.