The American federal government isn’t the only procurement landscape shifting its attention to denfence spending. The European Union (EU) is undergoing a significant transformation, with a stronger focus on military readiness. This includes organizations like the North American Treaty Organization (NATO), which is also leaning more into defence. As a result, we can expect to see emerging opportunities for both U.S. and EU contractors. In this blog, we’ll cover recent European/NATO defence initiatives so you can stay ahead of these future opportunities.
Before we get too far—I know Defence is spelled “wrong” to U.S. readers, but since this blog is focusing on the European and NATO markets, we will be spelling it the EU way. Along the same line, if you’re a U.S. contractor, you may be wondering how this applies to you.
International organizations such as NATO, the United Nations (UN), World Bank, and the World Health Organization (WHO) can purchase from GSA Multiple Award Schedules (MAS). You can also become a contractor with NATO, through their several procurement agencies (more on that later in the article).
If you’re an EU contractor, you may already be tuned into the marketplace, but you can become a contractor with NATO as well, and sell through GSA Schedules. So, as the EU and NATO increase their spending for defence, both American and EU contractors have the opportunity to play a very important role.
In March 2025, Germany made a historical shift in fiscal policy—German lawmakers approved a legislative package enabling up to €1 trillion in defence and infrastructure investments over the next 12 years. This package will ease off Germany’s “debt brake” which caps the percentage of new borrowing. This relaxation of debt limits will allow defence and security spending for intelligence agencies and assistance to Ukraine to rise above 1% of GDP, including a €500 billion fund for Germany’s infrastructure, and €100 billion for climate related spending.
Germany has also asked the EU to activate an emergency clause that would allow it to increase defence investment funds without breaking any rules. We expect to see an increase of projects related to cyber defence, military infrastructure, and advanced weaponry.
Launched in 2022, the European Sky Shield Initiative (ESSI) is a German-led project aiming to develop a ground-based integrated European air defence system, including anti-ballistic missile capabilities. The initiative was created to address NATO and EU’s gaps in the air and missile defence systems, following the Russian invasion of Ukraine.
As of 2025, over 20 countries participate in ESSI. ESSI includes non-NATO neutral countries Austria and Switzerland, but the initiative works closely with NATO to leverage already existing cooperation frameworks. Since both Germany and NATO have expressed the need for increasing the defence budget, we’ll be keeping a close eye on the ESSI and future projects related to the mission.
In addition to Germany’s defence investment and the European Sky Shield Initiative, the EU has made recent strides to strengthen European defence capabilities. Two notable actions are the ReArm Europe Plan/Readiness 2030, and the European Defence Industry Programme (EDIP).
The European Commission’s ReArm Europe Plan/Readiness 2030 is a strategic defence initiative designed to enhance the EU's military capabilities, with plans to mobilize up to €800 billion. This plan will be funded through national fiscal flexibility, a new €150 billion loan instrument for joint procurement, potential redirection of cohesion funds, and expanded European Investment Bank support.
The ReArm Europe Plan/Readiness 2030 highlights three lines of action that will guide the EU and its member states toward defence readiness by 2030:
The critical capability gaps mentioned above include:
The European Defence Industry Programme, or EDIP, is a regulation proposed by the European Commission to start implementing concrete actions identified in the European Defence Industrial Strategy (EDIS). The regulation aims to close the gap between the ending of short-term emergency measures and ensure the EU’s defence is ready for the future. EDIP will:
The EDIP ultimately provides access to funding for defence technology innovation and encourages participation in EU-funded defence projects. Just like the other initiatives mentioned above, we expect EDIP to increase contracting opportunities across the EU.
NATO has already expressed their intentions to ramp up defence spending as seen in the ESSI and beyond. At the upcoming NATO summit, member nations are expected to agree to a new defence spending target of 3.5% of GDP by 2035, up from the current 2.3%. This is in response to NATO Secretary General Mark Rutte urging NATO members to help keep the Trump Administration on board.
We anticipate NATO’s top two procurement agencies, NATO Support and Procurement Agency (NSPA) and the NATO Communications and Information Agency (NCIA) will be releasing opportunities related to defence in the near future.
The NSPA is the main logistics and support agency under NATO, acquiring supplies, repair and maintenance services, demilitarization equipment, security items, road repair materials, and engineering/technical support. The NCIA is the main agency for research and development, procurement, and implementation of Consultant, Command, and Control (C3) within NATO. NSPA is expected to release more opportunities related to the support of weapon systems, fuel delivery, airfield logistics, and medical/base support services.
To do business with either of these agencies, you can self-register as a supplier in the respective supplier bases for NSPA and NCIA.
As the EU and NATO continue to strengthen their defence efforts and adjust the budget accordingly, contractors can expect to see significant opportunities. It’s important you know where to look and keep a pulse on the spending priorities. To stay up to date on recent government contracting news and insights, check out our blog and monthly newsletter. If you have questions about selling to international markets, we would be happy to help you.