European countries could face a rearmament bill of up to $1 trillion as they respond to the growing Russian threat and the possibility of a significant U.S. military drawdown from the continent, according to a September 3 report from the International Institute for Strategic Studies (IISS) in London.
The 106-page report, “Progress and Shortfalls in Europe’s Defenses: An Assessment,” highlighted major gaps in Europe’s defense capabilities, including production, intelligence, and critical equipment such as long-range missiles and integrated air and missile defense systems.
“The primary driver of this increasing urgency is the Russian military threat and uncertainty over U.S. commitment to defending European allies,” the report said. Strategic assessments vary across European capitals over how soon Russia might pose a direct threat to NATO territory, but most estimates fall between two and five years.
At the same time, the Pentagon is expected to release its own global posture review this month, which could signal a shift of military resources from Europe to the Asia-Pacific. Some NATO officials believe U.S. force reductions in Europe could reach 30%.
Rising Defense Budgets
European leaders have already moved this year to address the challenge. In March, EU leaders pledged billions in new defense spending, with European Commission President Ursula von der Leyen calling it a “defining moment in Europe’s history.”
The bloc also made available up to €150 billion ($160 billion) in EU-backed loans to help member states bolster their militaries, while eurozone fiscal rules were eased to exclude military spending.
U.S. President Donald Trump, who had frequently criticized NATO allies for under-spending on defense and relying too heavily on U.S. power, has more recently praised their commitments following the NATO summit in June, when members agreed to raise defense budgets to 5% of GDP.
Still, the IISS report stressed that the issue is not only about money but also about building capacity. “Europe’s defense industries continue to struggle to scale up production quickly enough, while many European militaries remain unable to meet recruitment and retention targets,” the report noted.
Air and Missile Defense Gaps
The report identified integrated air and missile defense (IAMD) as a particular weakness. Former and current U.S. military commanders have said Europe’s air shield is ill-prepared to counter the scale of the Russian threat.
“What you are seeing in major Ukrainian cities could also be repeated in some of Europe’s major cities,” said Philip Breedlove, former NATO Supreme Allied Commander Europe, in an April interview with Radio Free Europe.
Shortage of Long-Range Missiles
The study also highlighted Europe’s shortcomings in long-range strike. While some countries operate advanced cruise missiles such as the Anglo-French Storm Shadow/SCALP or Germany’s Taurus system, “only a handful of European allies have land-based long-range precision fire systems, and at sea only France and the United Kingdom possess land-attack cruise missiles with a 1,000-kilometer range.”
The European Long-Range Strike Approach (ELSA) project was cited as the most important initiative to strengthen land-attack capabilities up to 2,000 kilometers or more. Initially launched by France, Germany, Poland, and Italy, the project has since been joined by the UK, Sweden, and the Netherlands.
Additional Weaknesses
The report pointed to other deficiencies, including limited reconnaissance and intelligence aircraft, a lack of sovereign large-scale cloud computing capabilities, and slow, poorly coordinated procurement processes.
These defense spending demands come as European governments already face heavy fiscal pressures in areas such as healthcare, education, and social welfare.
The report concluded that meeting these challenges will require many NATO countries in Europe to take financial risks and make politically difficult decisions.
