Pension costs undermine Europe’s push to rebuild military power

As European NATO countries rush to strengthen their armed forces, large pension bills threaten to divert funds from urgently needed military hardware.

European NATO members are racing to boost defence capabilities amid growing security concerns over Russia and doubts about long-term U.S. support. But generous military pensions are quietly eating into defence budgets, complicating efforts to strengthen firepower.

Reuters analysis of budget data from 13 NATO members shows that pensions consume an average of 12% of defence spending - reaching nearly 20% in Belgium, Bulgaria and Italy, and 16% in France. These costs, while included in NATO’s spending figures, do not translate into new equipment or operational strength.

Germany, with a lower pension share at 11.5%, appears better positioned to expand its military capabilities, while countries like France and Italy risk falling short of NATO targets if pension costs are excluded.

Although 23 of NATO’s 32 members claim to meet the alliance's 2% of GDP spending goal, that number drops significantly when pension spending is excluded. For instance, France barely meets the threshold, and Italy has reclassified pensions to meet NATO expectations.

Some countries, such as Belgium, are considering reforms like raising the military retirement age from 56 to 67. However, adjusting pension systems is politically sensitive and may affect recruitment and morale.

"If you don’t invest in the people behind the weapons, you’ll end up with empty tanks and no one to drive them,” warned Emmanuel Jacob, head of European soldiers’ rights group Euromil.

As NATO eyes even higher spending benchmarks - up to 5% of GDP, as demanded by U.S. President Trump - Europe faces a hard choice: fund more missiles and drones, or continue supporting costly military pensions that deliver no combat edge.

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