How to profit from the upcoming NATO spending boondoggle! The EU will lose a quarter of a trillion euros to fraud and corruption in the defence arena in the next ten years.
EU bureaucrats have a less than zero chance of policing an extra trillion euros in defence spending!
“NATO members have committed to spending 5% of their Gross Domestic Product (GDP) on defence and security-related spending by 2035, as agreed at the 2025 NATO Summit in The Hague.
This target is divided into two components:
3.5% of GDP on core defence requirements, including troops, weapons, and major equipment.
1.5% of GDP on defence- and security-related investments, such as critical infrastructure, cybersecurity, civil resilience, innovation, and defence industrial base development.”
HOW BIG IS NATO GDP?
From Brave AI:
“NATO’s combined GDP is approximately $18.35 trillion in US dollars, representing about 21% of the global GDP. This total includes all 32 member countries, with the United States contributing the largest share, followed by Germany, the United Kingdom, France, and Italy.
The alliance’s economic power significantly surpasses that of individual nations, including Russia, whose GDP is roughly one-eighth of NATO’s combined GDP. This economic strength underpins NATO’s defense capabilities and global influence.”
There is an obvious question – how come NATO is worried about Russia? It’s ecoomy is 7 times larger.
AS for population: “The North Atlantic Treaty Organization (NATO) has a total population of approximately 981 million as of 2024, according to the U.S. Census Bureau.
As of Monday, February 16, 2026, the estimated population of Russia is 146,270,379,
NATO has 7 times the number of people!
All about raw materials, weaponry and, of course, energy!
In a war between the EU and Russia, each could take out the others energy infrastructure in a heartbeat. The EU would use expensive missiles,, Russia would use cheap drones. one is cheap and takes a lot of time and effort, the other lots of time and money.
The per cent of GDP pledge means that US NATO countries would need to increase spending – a lot!
Per Brave AI:
“NATO countries collectively spent an estimated $1.59 trillion on defense in 2025, according to the latest NATO report. In terms of GDP share, all 32 NATO members met or exceeded the 2% guideline in 2025, with an average of 2.61% of GDP spent on defense.”
A increase from the 2.61% of GDP to 5% represents an increase of 1.5 trillion bucks from1.6 Trillion bucks to 3.1 trillion bucks by 2035 and maintained annually thereafter over the next 8 years!
Even h US needs t increase spending!
“As of 2026, the United States is projected to spend 3.5% of its GDP on defense, according to estimates from the Global Military Expenditure Tracker.
https://www.globalfirepower.com/defense-spending-budget.php
This means that NATO suppliers are abut o get mega ordrs for all sorts of things from jets to bullets to software. Countries ar already engaging in a massive trough squabble.
“France is actively seeking to block UK firms from participating in the EU’s €150 billion defence procurement fund, known as the Security Action for Europe (SAFE) initiative, citing concerns over supply chain sovereignty and EU industrial autonomy.”
“Restrictions on UK Involvement: The EU’s European Defence Industry Programme (EDIP), part of the broader €800 billion defence investment plan, would restrict UK access to joint procurement projects unless the UK pays a substantial fee and agrees to additional conditions.”
“Buy European Clauses: The EU’s SAFE (Security Action for Europe) defense program, a €150 billion initiative, mandates that at least 65% of components in equipment funded by the program must originate from the EU, Ukraine, Norway, or other designated European partners.
Exclusion of U.S. Design Authority: Weapons systems where a non-EU country (like the U.S.) holds design authority—such as the Patriot missile system—are excluded from EU-funded procurements. This prevents U.S. firms from benefiting from EU funding even if they manufacture components in Europe.
Exclusion from Funding Access: The EU has explicitly excluded the U.S. and the UK from participating in joint procurements under the SAFE program, despite allowing some third countries (like Japan and Canada) that have signed EU security partnerships.
These measures reflect a broader shift in EU defense policy, accelerated by concerns over U.S. political unpredictability under President Trump and the need to build a self-sufficient European defense industrial base. While U.S. weapons will still be purchased by individual EU members, the EU’s collective funding mechanisms now actively steer investment away from American defense contractors.”
A real well co-ordinated NATO!
Let’s assume the US will ‘accommodate’ an increase of $500 billion in Defense spending ( 5 per cent of $31.8 trillion equals 1. 6Trillion bucks pr annum from the current 3.5 per cent or 1.1 trillion bucks). and will spend that on the usual suppliers – and check out the EU defence contractors.
“BAE Systems, Airbus, Leonardo, and Rheinmetall are the largest European defense contractors, forming the backbone of Europe’s defense industry in 2025 and beyond.
“BAE Systems (UK): Europe’s largest defense contractor, with 2024 revenue of £28.3 billion and an order backlog exceeding £77 billion. It leads in aerospace, maritime systems, cybersecurity, and electronic warfare, and is central to flagship programs like the Eurofighter Typhoon and the Global Combat Air Programme (GCAP).
· Airbus Defence & Space (Trans-European): A leading aerospace and space technology provider, with 2024 defense revenue of approximately €12 billion. It produces the A400M Atlas military transport aircraft and plays a key role in the Eurofighter Typhoon and Future Combat Air System (FCAS) programs.9shares up 17 per cent in he las yea but hav doubled over the last 5 years).
· Leonardo (Italy): One of Europe’s most diversified defense firms, with 2024 revenue of €17.8 billion and an order backlog of €44 billion. It specializes in military helicopters, avionics, radar systems, and unmanned systems, and is a key partner in GCAP. (shares up 72 per cent in the last year).
· Rheinmetall (Germany): A cornerstone of Europe’s land defense capabilities, with 2024 defense segment revenue of €10.2 billion. It leads in armored vehicles (e.g., Lynx, Boxer), advanced munitions, and digital battlefield technologies, and has seen its market value surge in 2025 amid increased defense spending. (share price doubled in the last year).
BAE Systems and Rolls Royce might lose out on some contracts!
That’s half the story. Do non-US NATO countries have the ability to prevent and control FRAUD???
I n the US , which arguably has been addressing the issue for decades:
“Despite spending over $1 trillion annually, the DOD lacks basic fraud prevention tools like data analytics and fails to verify contractor pricing or ownership, enabling widespread abuse.
“… the Government Accountability Office (GAO) estimates that direct financial losses from fraud across the entire U.S. government range between $233 billion and $521 billion annually, with defense contracting being especially vulnerable. The DOD has repeatedly failed audits—seven consecutive failures—and cannot account for over 60% of its $4.1 trillion in assets. “
The bureaucratic EU already spends a fortune on compliance which will need to be ratcheted up considerably to handle he extra defence spending.
“Financial Sector Compliance: The cost of financial crime compliance in the EU is substantial. In 2023, Germany’s financial institutions spent $32.5 billion, France over $25.3 billion, and the Netherlands $12 billion on financial crime compliance. The UK’s banks and fintechs spent £38.3 billion annually (as of 2024) on fighting financial crime and fraud.
Tax Compliance: A European Commission study estimated that businesses in the EU-28 incurred an average annual tax compliance cost equivalent to 1.9% of their turnover in 2019, more than double the cost since 2014.
Digital and Environmental Regulations: U.S. tech firms face $2.2 billion annually in compliance costs for EU digital regulations (e.g., DMA, DSA), with potential financial exposure reaching $20 billion+ across five major firms. The European Union Deforestation Regulation (EUDR) is projected to cost businesses an average of 0.1% of revenues for compliance, with higher relative burdens for SMEs.
EU Budget and Oversight: The European Commission recovers €2.8 billion annually from incorrect spending of EU funds, representing 2.1% of payments, indicating ongoing compliance monitoring and enforcement costs.
Good luck co-ordinating the massive increase in defence procurement through that labyrinth!
How much extra defence spending are we talking about?
Just for the EU countries – an increase from
“Defence spending is projected to reach €381 billion in 2025, with estimates suggesting it could rise to €392 billion at current prices, or 2.1% of GDP.
To: 5 per cent of GDP or 933 billion from 392 billion – an extra half a trillion euros.
I guesstimate that around 5% will be lost to fraud and corruption -I bet money laundering gangs are licking their chops in antici..pation.
200 billion euros in fraud next year. as the spending increases from around 400 billion a year to 5 per cent of “.. The European Union’s nominal GDP is projected to reach $22.515 trillion in 2026, according to the most recent economic data and forecasts. “ over a trillion euros times 5 per cent equals 50 billion euros in fraud a year every year for the next decade!
Those defence companies share prices bear watching too!
Finally – consider that each EU country is BROKE and an increase I defence spending feeds DIRECTLY INTO an increase in their fiscal deficits making them even MORE BROKE – especially France and the UK!! There will be hell to pay in run-ups to country elections!
Squeaky bum time in bureaucracies!
Onwards!!!
PLEASE take a (paid or unpaid) subscription or forward this article to those you think might be interested
You can also donate via Ko-fi – any amount from three dollars upwards. Ko-fi donations here:
A senior admiral in the NATO command structure apparently woke up last week and realised that when it comes to missile technology Russia is a generation ahead of NATO. I would imagine it was the second use of the Oreshkin which woke him up.