Military expenditure in Central Europe rose for a second consecutive year (by 13 per cent), with a clear majority of countries increasing spending. Total expenditure in 2015 was slightly higher than its previous peak in 2007. Growth in military spending was most apparent in the countries bordering Russia or Ukraine, reflecting the escalating fear of a threat from Russia. Poland boosted spending by 22 per cent to $10.5 billion in line with its 10-year $40 billion military modernization plan, and military spending reached 2.2 per cent of its GDP in 2015. Romania increased spending by 11 per cent to $2.5 billion and declared its intention to raise its military burden from the current 1.4 per cent of GDP to the North Atlantic Treaty Organization (NATO) target of 2 per cent by 2017. Romania’s initial defence budget for 2016 shows a further rise of 53 per cent. Meanwhile, Slovakia’s spending grew by 17 per cent, and the Baltic states—Estonia, Latvia and Lithuania—increased military expenditure by 6.6, 14 and 33 per cent, respectively. Overall spending by NATO’s European members (including Turkey) was $250 billion, down 0.3 per cent compared with 2014.
In Eastern Europe, Russia’s military spending in 2015 was $66.4 billion, up 7.5% from 2014, and up 91 per cent compared with 2006. The economic crisis related to falling oil and gas prices, coupled with economic sanctions, dramatically reduced Russian Government revenues. The govern ment was forced to cut budgeted spending in all departments in early 2015. Actual military expenditure was 3 per cent lower in 2015 than originally planned. However, budget cuts for other departments were closer to 10 per cent. In reaction to further falls in the price of oil, the
planned defence budget for 2016 is about 9 per cent lower in real terms than spending in 2015. Ukraine’s military expenditure in 2015 was $3.6 billion, an increase of 10 per cent compared with 2014. With fi ghting in eastern Ukraine continuing in 2015, the military budget was revised upwards several times during the year. Ukraine’s military spending has risen by 61 per cent since 2006, including a 34 per cent increase since 2013 alone.