Aug 27, 2026
European Union defense expenditures climbed to €418 billion in 2025, marking a 20% jump from the prior year, with forecasts pointing to €454 billion in 2026—equivalent to 2.4% of GDP. Naval defense stands out as one of the fastest-expanding areas. Since 2016, the bloc has produced naval vehicles and equipment worth €117.8 billion, with output in 2025 alone reaching €13.7 billion.
On paper, four nations lead this production. France, Germany, Italy, and Spain together represent 87% of the EU’s maritime defense industrial base and took in 82% of the sector’s total output value last year. France alone manufactured 37% of the bloc’s naval defense vehicles in 2025, with Germany and Italy each contributing 19%, and Spain 8%. These four also account for 60% of the EU’s overall defense spending.
Christophe Tytgat, Secretary General of SEA Europe, the shipyards and maritime equipment association, sees this as a deliberate outcome: the concentration is genuine and structural, not a coincidence, stemming from decades of naval-industrial heritage and geography centered in a few countries. Submarines are another expanding segment, now making up 27% of EU maritime defense output, with the same quartet producing 93% of the bloc’s naval exports.
Yet industrial output does not equate to military dedication, argues Chris Kremidas-Courtney, senior advisor at the European Policy Centre. They contend that the four-country focus overlooks some of Europe’s most vulnerable navies, singling out Greece and Sweden as notable absences. Greece operates one of Europe’s most capable conventional submarine fleets and sustains a rigorous operational presence across the Aegean, Eastern Mediterranean, and Red Sea. Sweden’s more compact navy is tailored for the Baltic and supported by a robust domestic defense sector.
Kremidas-Courtney emphasizes that integration, not scale, is the true challenge. Europe does not require every nation to construct a fleet comparable to Italy’s or France’s, but it does need credible, distributed forces linked by interoperable systems and a unified maritime awareness. This approach, they argue, should reach beyond the EU to include the UK and Norway.
When measured against GDP rather than raw output, the focus shifts eastward. Poland allocates the highest share of any EU member to defense at 4.48% of GDP, followed by Lithuania (4.00%), Latvia (3.73%), and Estonia (3.38%)—all frontline states bordering Russia or its ally Belarus. Germany has more than doubled its GDP share since 2021, rising from 1.27% to 2.14%, and targets €162 billion in annual defense spending by 2029.
Tytgat contends that neither the industrial heavyweights nor the frontline states can shoulder EU maritime security alone. Only four EU countries cannot replace broad-based maritime security, as a collective security strategy demands interoperable capabilities, resilient supply chains, and genuine burden-sharing across the entire Union.
Driving this spending is Russia’s war on Ukraine and the maritime threats it spawned. A shadow fleet of sanctioned tankers, allegedly used for surveillance and sabotage, has heightened EU vigilance. A spate of undersea cable disruptions in the Baltic—including the BCS East-West Interlink, C-Lion1, and Estlink 2 incidents in late 2024—prompted Brussels to adopt a Cable Security Action Plan in 2025, alongside NATO’s Baltic Sentry naval patrol mission.
The EU updated its Maritime Security Strategy in 2023. The earlier version centered on piracy, illegal fishing, and migration flows; the revised one targets state-based threats, Tytgat notes. He also cautions that the current strategy lacks enforcement power: tools have proliferated, but the financing and governance structures needed to turn the strategy into concrete action remain insufficient.
A Commission subsea infrastructure package unveiled in February 2026 includes €347 million, plus a separate €92 million ocean-observation initiative launched in mid-2026. Tytgat describes both as initial steps but insists the amounts are inadequate if the EU is to properly address the daily threats it encounters.
Brussels is seeking to bridge this gap through other mechanisms: the €150 billion SAFE loan facility under its Readiness 2030 roadmap, the European Defence Fund—68.4% of which has flowed to France, Germany, Italy, and Spain—and PESCO’s joint shipbuilding efforts, including the Italian-led European Patrol Corvette.
In March 2026, the EU introduced an Industrial Maritime Strategy, integrating shipbuilding into a bloc-wide industrial framework for the first time, rather than relying on national champions, and allocated €325 million for naval and undersea defense projects.
The true measure of burden-sharing will come when the European Commission issues its progress report on the maritime strategy in October 2026. For now, Tytgat advises the EU to concentrate on securing the necessary tools and investment to address current challenges in its immediate surroundings and at all global chokepoints that pose risks to the EU’s supply security, trade, and economy.