EU defense budgets surge as Germany expands artillery gunpowder production

The European Defence Agency reports that defence spending by the EU’s 27 member states rose 20% to €418 billion in 2025, representing 2.2% of EU GDP. The total is forecast to reach €454 billion in 2026 and could climb to as much as €547 billion by 2029. Equipment procurement accounted for €115 billion in 2025, with collaborative purchases making up 24% of that spend, while research and development funding is set to increase from €17 billion to €20 billion.

In Germany, the rearmament programme foresees defence outlays of €108 billion in 2026, €140 billion in 2027 and €180 billion by 2030 – roughly one‑third of the national budget and larger than the combined defence budgets of France and the United Kingdom. The financing relies on borrowing, with interest payments projected at €80 billion in 2030, and savings are being taken from social programmes such as parental leave, welfare and health care. Part of the expanded budget is being spent at Rheinmetall’s newly enlarged gunpowder plant in Aschau am Inn, where the subsidiary Nitrochemie produces about 1,500 tonnes of nitrocellulose‑based artillery propellant each year using a largely manual, compartmentalised process to ensure precision and safety.