Russian saber rattling and prodding from Washington are spurring more of NATO’s European allies to step up their defense spending — and the makers of military hardware stand to benefit.
Since the U.S. presidential election, European members of the North Atlantic Treaty Organization have announced plans to buy everything from surveillance aircraft and drones, to new air defense systems and warships. The announcements come amid U.S. criticism that European countries are not doing enough to uphold their part of the alliance.
As a result, NATO military spending this year is expected to bounce back for the first time since 2010, according to an IHS Jane’s Defence Budgets report. Meanwhile, Russia’s defense spending is seen falling this year for the first time since the late 1990s, as the low price of oil and Western sanctions batter its economy.
“There’s already recognition among leaders in the European Union that countries need to do more [on defense],” said Phil Finnegan, a defense analyst at the Teal Group in Fairfax, Virginia.
NATO has been around since the late 1940s, when the trans-Atlantic military alliance had a dozen founding members. It kept the peace through the Cold War and now has 28 participants, including several countries that were once part of the former Soviet Union’s orbit and the communist-led Warsaw Pact.