The Global Surge in Defense Spending: A Deep Dive into Post-2020 Trends in Europe and Asia

The world that emerged after 2020 is dramatically different from what many strategists and political leaders had envisioned just a few years earlier. At the start of the new decade, it seemed plausible that the world was finally inching toward a period of relative peace, with globalization knitting countries closer and the memory of great wars fading. Instead, a cascade of conflicts, rivalries, and insecurities has sent governments across Europe and Asia into a defense spending frenzy — a reawakening of hard power politics that many thought had gone out of fashion.

The first shock came with the COVID-19 pandemic. Although it wasn't a traditional security threat, it exposed a profound fragility in global systems — supply chains buckled, economies teetered, and even the richest countries found themselves scrambling for basic medical supplies. The idea that interdependence alone could ensure security took a hit. Then, even before the pandemic had fully receded, the world was rocked by something much more visceral and immediate: Russia's full-scale invasion of Ukraine in February 2022.

For Europe, this was not just a conflict between two nations — it was a shattering of illusions. The belief that war on the European continent was a thing of the past, or that economic integration with Russia would keep it “civilized,” was obliterated. Suddenly, tanks were rolling through Europe’s breadbasket, and the specter of nuclear escalation, long dormant, reentered public consciousness. The implications were both emotional and strategic. From Berlin to Stockholm, from Warsaw to Paris, governments began to treat defense not as a bureaucratic footnote, but as a central pillar of national policy.

Germany’s reaction was perhaps the most symbolic. For decades after World War II, it had maintained a cautious, almost reluctant, military posture. But with Russian artillery shelling Ukrainian cities and energy blackmail hanging over Europe, the German government announced a Zeitenwende — a turning point — pledging over €100 billion to modernize the Bundeswehr. This wasn’t just a budget change; it was a psychological shift. For the first time in a generation, German policymakers began talking seriously about tanks, fighter jets, and troop deployments.

But it wasn’t just Germany. Poland, long a vocal critic of Western complacency toward Moscow, seized the moment to stake its claim as a new military heavyweight in Europe. Already spending over 3% of its GDP on defense — well above NATO’s 2% target — Poland began ordering weapons at a dizzying pace: Abrams tanks from the U.S., K2 tanks and K9 howitzers from South Korea, FA-50 fighter jets, Patriot missile systems, and more. In just a few years, Poland is set to have one of the largest and most modern land forces in Europe.

The Baltic states — Latvia, Lithuania, and Estonia — also responded quickly, sharply increasing their defense budgets and hosting more NATO troops. These countries have always seen themselves as on the front line of potential Russian aggression, and the war in Ukraine only confirmed their worst fears. Their defense investments have focused on rapid mobilization, anti-air and anti-drone systems, and cyber resilience — reflecting the multifaceted nature of modern threats.

Further north, the Nordic region also witnessed a tectonic shift. Finland and Sweden, traditionally non-aligned, made historic moves to join NATO, ending decades of military neutrality. Finland, with its long border with Russia, wasted no time expanding its already capable military, particularly its artillery and conscript-based reserve system. Sweden, though slower, began ramping up procurement and preparing for greater NATO interoperability. These changes, especially in countries that long prioritized diplomacy over deterrence, reflect just how fundamentally the European security environment has changed.

Meanwhile, NATO itself — often derided as obsolete just a few years ago — has found renewed purpose. The alliance has increased its forward presence in Eastern Europe, activated rapid response plans, and fostered unprecedented cooperation on everything from logistics to intelligence sharing. Countries like France, Italy, and even the U.K., post-Brexit, have reaffirmed their commitment to collective defense. The European Union, too, has begun dipping its toes into coordinated defense efforts, pushing for joint arms procurement and a more integrated industrial base.

Yet even as Europe scrambles to rebuild its defenses, the most seismic shifts in military posturing may be taking place in Asia. The Indo-Pacific has emerged as the most strategically dynamic — and dangerous — region in the world. At the heart of this is China. The People's Republic has spent the past two decades methodically building a military that not only defends its borders but projects power well beyond them. Its navy is now the world’s largest by number of vessels. Its missile forces can threaten U.S. bases across the Pacific. And its cyber and space capabilities are growing at a pace that has alarmed Pentagon planners.

What’s perhaps most concerning to China’s neighbors is not just its capabilities, but its intentions. The increasing incursions into Taiwan’s air defense zone, the aggressive posturing in the South China Sea, and the growing nationalist rhetoric in Beijing have convinced many that the risk of conflict — whether deliberate or accidental — is no longer theoretical.

Taiwan, facing the possibility of invasion, has accelerated its shift toward asymmetric defense. Rather than trying to match China tank for tank or ship for ship, it is investing in mobile missile systems, anti-ship weapons, drones, and civil defense training for its population. The island is also deepening its informal security ties with the United States and Japan, receiving more advanced arms and engaging in joint planning exercises.

Japan, too, is undergoing a defense transformation that would have been unthinkable just a decade ago. Long constrained by its pacifist constitution, Japan is now committed to doubling its defense budget by 2027 — targeting the symbolic 2% of GDP threshold. This includes funding for long-range missile capabilities, counter-hypersonic systems, and major upgrades to naval and air power. Japan has also announced plans to purchase hundreds of Tomahawk cruise missiles, a move that clearly signals a shift toward deterrence by denial, including the ability to strike enemy bases preemptively if necessary.

South Korea finds itself balancing threats on two fronts — North Korea’s escalating nuclear and missile developments, and the broader strategic competition between the U.S. and China. It has responded with a blend of high-tech upgrades and diplomatic maneuvering. Its Kill Chain pre-emptive strike system, ballistic missile defenses, and home-grown fighter jet program (KF-21) demonstrate its intent to deter aggression through technological edge. At the same time, South Korea has emerged as a global defense exporter, sealing massive arms deals with Poland and Southeast Asian countries, providing both economic and strategic dividends.

India, often overshadowed in Western defense analyses, is also deeply engaged in a strategic recalibration. The 2020 Galwan Valley clash with China, which left soldiers dead for the first time in decades, was a wake-up call. Since then, India has poured resources into high-altitude infrastructure, deployed more troops along the contested border, and expanded its missile and surveillance capabilities. Beyond the Himalayas, India is beefing up its naval presence in the Indian Ocean, wary of Chinese submarines and increasing PLA Navy activities. Meanwhile, its defense ties with the United States, France, and Israel have deepened, with joint exercises and co-development projects increasingly common.

The rise in defense spending in both Europe and Asia is not just about buying more weapons — it’s about adapting to new kinds of warfare. The modern battlefield includes not only tanks and jets but satellites, drones, cyberattacks, and information manipulation. Nations are investing in cyber commands, electronic warfare units, and AI-enabled surveillance systems. Space is no longer just for science; it's a contested domain, with anti-satellite weapons now part of military arsenals. Cybersecurity, once the purview of tech departments, is now a strategic national priority, with governments recognizing that an attack on a power grid or hospital network can be as devastating as a missile strike.

This rapid militarization raises difficult questions. What are the long-term consequences of this arms race? Can economies strained by inflation, debt, and climate challenges sustain these defense surges? Is there a risk that deterrence could slip into provocation — that preparing for war could accidentally trigger one? These are not hypothetical concerns. Defense spending comes at a cost. For every billion spent on new jets or missile shields, there’s a billion less for education, healthcare, or climate adaptation. Yet for many nations, this is a cost they are increasingly willing to bear, because the alternative — vulnerability — feels too dangerous in today’s world.

Another consequence of this spending boom is a reshuffling of the global arms market. While the U.S. remains the dominant exporter, countries like South Korea and Turkey are emerging as major players. European defense companies are benefiting from new demand, and traditional arms importers are now looking to build domestic capacity. This shift is also strategic — countries want more control over their supply chains and less dependence on foreign powers, especially in a world where alliances are tested and loyalties shift.

What’s clear is that the post-2020 era has marked a profound return to hard security thinking. Gone are the days when soft power alone was seen as sufficient. Countries are preparing not just for “hybrid warfare” or counterterrorism but for full-spectrum conflict — including the possibility of war between major powers. The rules-based international order, often invoked as a shield against chaos, seems fragile when tanks cross borders and drones bomb cities.

We are now entering what might be called an age of militarized multipolarity. The United States, China, the EU, Russia, India, and others are all jostling for influence, and defense spending is both a cause and a consequence of this competition. For Europe and Asia — two regions that bore the brunt of the 20th century’s worst wars — this rearmament is as much about survival as it is about power.

In this climate, defense budgets are no longer just financial plans; they are political statements, declarations of intent, and, in many ways, reflections of national identity. Whether this new arms race will stabilize into a balance of power or spiral into confrontation remains to be seen. What is certain is that the era of peace dividends is over — and the new era demands not only weapons, but wisdom.

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Disclaimer: The views presented in this, and every previous article of this blog, are personal and not a reflection of the views of the organization the author is engaged with.