Europe’s costly military pensions complicate defence build-up

European nations want to spend big on artillery, missiles and drones, but costly military pension commitments risk constraining those ambitious plans, according to previously unreported NATO-member defence budget data compiled by Reuters.

- Leigh Thomas, Reuters

NATO's European members are rushing to ramp up spending on military hardware as a bellicose Russia threatens their eastern flank and US President Donald Trump's long-term commitment to European security appears suddenly in doubt. But for over a dozen NATO members, whose military spending Reuters analysed, pensions make up a large — and largely overlooked — chunk of their defence budgets.

While those are funds that could potentially be redirected toward firepower, experts warn that any cuts to generous retirement benefits could make it harder to recruit personnel.

"A non-insignificant portion of what is accepted as defence spending doesn't deliver any capabilities, nor more troops, nor anything, but is earmarked for pensions," said Camille Grand, a former NATO assistant secretary general for defence investment.

European nations’ historical failure to meet a target to spend the equivalent of 2% of economic output on their militaries to shore up NATO's col-