Russian aggression fuels European rearmament

Global Watch | 2026-03-31

Russia's full-scale invasion of Ukraine has triggered the fastest surge in military spending in Europe since the Cold War, exposing long-standing vulnerabilities and forcing allies to rebuild industrial capacity at breakneck speed.

This often-overlooked industrial transformation is not just about buying more weapons.

It is reshaping supply chains, economies and the balance of power, while raising fresh concerns about long-term global stability.

Across the continent, defense plants are expanding and new facilities are opening at a pace analysts say is unprecedented since the Cold War.

Germany's Rheinmetall has become a symbol of this shift.

Rapid arms expansion

The company opened a major new munitions facility in Unterlüß and is racing to increase artillery-shell production, with ambitions to exceed 1.5 million shells a year.

CEO Armin Papperger captured the urgency when he said: "We are needed when it comes to increasing the defense capabilities of Germany and Europe and creating an effective deterrence."

Similar defense-industrial projects are expanding across Europe.

Rheinmetall is building tank factories in Hungary, gunpowder plants in Romania, ammunition lines in Lithuania and repair facilities in Ukraine.

Poland and the Baltic states are pouring billions into their own production lines, with several major European defense firms reporting revenue increases of up to 13 percent in recent financial disclosures.

SIPRI reports that European military expenditure rose by 17 per cent in 2024 to $693 billion, driven by efforts to replenish stocks depleted by support for Ukraine and to deter Russia.

This is not a temporary spike.

According to the International Institute for Strategic Studies, Europe’s share of global defense spending has risen sharply.

New EU initiatives, including the €150 billion SAFE joint-procurement instrument and the proposed Rearm Europe package, aim to reduce dependence on imports.

Russia's war has exposed Europe's hollowed-out defense-industrial base after decades of the "peace dividend," underscoring the need to treat defense production as strategic infrastructure.

NATO has likewise committed to enhancing the alliance's industrial base and stockpiling critical munitions.

Security dilemmas arise

While the buildup strengthens deterrence, it also stirs deeper concerns about global security.

Bruegel analysts warn of economic trade-offs: high defense spending could divert funds from other priorities and fuel broader arms-race dynamics, including with China.

Estonian intelligence reports Moscow is alarmed by Europe's self-reliance and uses hybrid tactics to slow it, including cyberattacks and sabotage.

NATO Secretary General Mark Rutte has been blunt: Russia could test the alliance with military force within years.

The surge in spending, which is pushing some nations toward 4 per cent of GDP, is creating new capabilities in drones, air defense and precision munitions, raising escalation risks in the Baltic or Arctic.

Yet the transformation carries a clear message: Russia's aggression shattered Europe's complacency and forced historic rearmament.

Factories once relics of the past are now humming as the continent forges the industrial base for credible deterrence.

This shift comes with real costs and risks, but weakness in the face of determined aggression is no longer acceptable.

The stakes for European and global security have never been higher. The coming years will test whether this buildup delivers lasting peace through strength or fuels a more dangerous world.