Defense spending in Central and Western Europe rose 13 per cent in 2022 to $345 billion, driven by Russia’s invasion of Ukraine and increased tensions over Taiwan and North Korea, according to the Stockholm International Peace Research Institute.
Management consultancy McKinsey and Company reports that Russia’s defense exports suffered a steep 21 per cent decline in 2022 to $2.82 billion, with U.S., French, German and Italian arms sellers claiming Russia’s lost business.
David Chinn, McKinsey’s senior partner, outlined the reasons behind Russia’s steep decline. “Russia made their neighbors feel threatened by that situation, and they’re now rethinking some of their export relationships,” Chinn told reporters.
The United States took the most significant share of Russia’s defense exports at 11 per cent in 2022, with France following at 5 per cent and Germany and Italy at 3 per cent.
Britain doubled its arms exports in 2022 to a record £8.5 billion, dominated by sales to Qatar – £2.4 billion worth of Eurofighter Typhoons – and Saudi Arabia, the United States and Turkey.
The European Commission predicts that EU member states will grow their defense budgets following Russia’s invasion of Ukraine to €290 billion by 2025. In 2021, these budgets stood at €214 billion
However, Europe remains a highly fragmented market – for example, the European Defense Agency countries operate 21 different main battle tank models and versions, 20 different fighter jets and 27 different destroyers and frigates.