Europe & NATO

European governments just backed the most aggressive defense-spending target in NATO history. NATO leaders left The Hague with a pledge to lift defense spending to 5 percent of gross domestic product. The commitment came only days after several EU capitals pushed double-digit increases through their 2025 draft budgets. Germany alone confirmed a rise from €95 billion to €162 billion within four years.

The Multinational MRTT Fleet (MMF) just secured two more Airbus A330 Multi-Role Tanker Transports. The contract, signed on 24 June 2025 at the NATO Defence Industry Forum in The Hague, brings the pooled inventory from ten planned aircraft to twelve. Defense officials confirm that Denmark and Sweden joined the program the same day, making eight member states in total. The newcomers will fund and fly the extra jets under the established cost-sharing formula.

Sweden has taken its first big equipment step as a NATO ally. On 24 June 2025 the Swedish Defence Materiel Administration (FMV) confirmed a €830 million (≈ SEK 9 billion, $900 million) order for seven IRIS-T SLM fire units. Diehl Defence will produce the systems, but German procurement authorities signed on Stockholm’s behalf under the European Sky Shield Initiative (ESSI). Defense officials confirm that the contract will give Sweden a medium-range layer able to defend army brigades and the Gotland battlegroup against cruise missiles, helicopters, drones, and fixed-wing aircraft.

The Ministry of Defence has signed a £700 million agreement with Thales UK to develop, manufacture, and support the Watchkeeper unmanned system. The single signature secures every major phase of work, from completing design through initial sustainment, under one integrated schedule.

France will pour €717 million into Eutelsat Group. The cash comes through the State Shareholdings Agency and lifts the state’s holding to 29.99 percent, just under the takeover threshold. Finance officials frame the move as a hard push for European digital and industrial autonomy.

Sweden will now aim to spend 3.5 percent of its gross domestic product on defense by 2032 instead of 2030. Officials confirmed the shift late Wednesday, only five days before NATO leaders gather in The Hague.

Lockheed Martin has entered a surge phase. More missiles leave its U.S. plants than ever, yet demand still outruns capacity. The company now courts European manufacturers to spread the load. According to industry sources, senior executives used the Paris Air Show this week to line up fresh joint ventures. Their pitch is blunt: new regional lines will cut delivery time, ease U.S. bottlenecks, and harden allied supply chains against disruption.

Prime Minister Mark Carney has broken from decades of caution. He pledged an extra US $6.6 billion (CA $9 billion) for the Department of National Defense in the current fiscal year, moving Canada to the NATO 2 percent-of-GDP benchmark by April 2026 and signalling the start of a long-term shift toward European partnerships.