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DEFENCE DATA 2006-2016

More information on the European Defence Agency is available at: www.eda.europa.eu ISBN: 978-92-95075-37-5 ISSN: 1831-9513 doi: 10.2836/317916 European Defence Agency, 2017 For reproduction or use of this material, permission must be sought directly from the copyright holder. Responsible editor: Pauline Massart Printed in Belgium

DEFENCE DATA 2006-2016 INTRODUCTION The European Defence Agency (EDA) collects defence data on an annual basis, and has done so since 2006, in line with the Agency s Ministerial Steering Board Decision of November 2005. The Ministries of Defence of the Agency s 27 Member States (MS) 1 provide the data. EDA acts as a custodian of the data and publishes the aggregated figures in its booklets. The 2005 data has been collected during the pilot exercise, which included only a limited number of indicators. A complete dataset is available since 2006, based on the revised list of indicators, including the four collective benchmarks for investment, approved by the Agency s Ministerial Steering Board in November 2007. The focus of this booklet is to provide an overview of defence spending developments over the decade, from 2006 to 2015, therefore most indicators cover these years. For defence expenditure breakdown, 2016 estimations are also provided. These are marked with e throughout the booklet. The data is presented in graphs, followed by short analysis. Comma is used as a decimal marker and dot as a thousand separator, as this is the practice followed by the majority of the EDA Member States. 1. All the EU Member States except Denmark participate in the Agency (under Article 5 of the Protocol on the position of Denmark annexed to the Treaty on European Union and to the Treaty on the Functioning of the European Union, Denmark does not participate in the formulation and implementation of EU decisions and actions which have defence implications). 1

TABLE OF CONTENTS 1. TOTAL DEFENCE EXPENDITURE 1.1 Defence Expenditure (Current Prices): Absolute Values and Percentage Change on Previous Year page 4 1.2 GDP and Defence Expenditure (Current Prices) page 5 1.3 Defence Expenditure (Current Prices) as a Share of GDP and Government Expenditure page 6 1.4 Defence Expenditure in Current and Constant 2010 Prices page 7 1.5 Defence Expenditure: Absolute Values (Constant 2010 Prices) and Percentage Change on Previous Year page 8 (Current and Constant 2010 Prices) 1.6 GDP and Defence Expenditure (Constant 2010 Prices) page 9 2. DEFENCE EXPENDITURE BREAKDOWN 2.1. Defence Expenditure Breakdown (Current Prices) page 11 2.2 Defence Expenditure Breakdown (Current Prices): Percentage Change on Previous Year by Category of Expenditure page 12 2.3 Defence Expenditure Breakdown (Current Prices): Percentage Shares of Total Defence Expenditure page 13 3. DEFENCE PERSONNEL 3.1 Civilian and Military Personnel: Absolute Numbers and Percentage Shares of Total Defence Personnel page 15 3.2 Military Personnel Breakdown: Absolute Numbers page 16 3.3 Military Personnel Breakdown: Percentage Change on Previous Year page 17 2 4. DEPLOYABILITY-SUSTAINABILITY 4.1 Deployable (Land) and Sustainable (Land) Forces: Absolute Numbers page 19 4.2 Deployable (Land) Forces, Sustainable (Land) Forces and Average Number of Troops Deployed page 20 as a Share of Total Military Personnel/Deployable (Land) Forces 4.3 Costs of Deployed Operations (Current Prices): Absolute Values and Percentage Change on Previous Year page 21 4.4 Average Number of Troops Deployed: Absolute Numbers and Percentage Change on Previous Year page 22

DEFENCE DATA 2006-2016 5. DEFENCE INVESTMENT 5.1 Defence Investment Breakdown: Absolute Values and Percentage Shares of Total Defence Investment page 24 5.2 Defence R&D Breakdown: Absolute Values and Percentage Shares of Total Defence R&D page 25 5.3 Defence R&D Expenditure: Absolute Values and Percentage Change on Previous Year page 26 5.4 Defence R&D as a Share of Total Defence Expenditure and Total Investment page 27 5.5 Defence R&T Expenditure: Absolute Values and Percentage Change on Previous Year page 28 5.6 Defence R&T as a Share of Total Defence Expenditure, Total Investment and R&D page 29 5.7 Total Defence Expenditure and Investment per Capita (Current and Constant 2010 Prices) page 30 5.8 Total Defence Expenditure and Investment per Military (Current Prices) page 31 5.9 Total Defence Expenditure and Investment per Military (Constant 2010 Prices) page 32 6. COLLABORATIVE INVESTMENT 6.1 National and Collaborative Defence Equipment Procurement: page 34 Absolute Values and Percentage Shares of Total Equipment Procurement 6.2 European Collaborative Defence Equipment Procurement: page 35 Absolute Values and Percentage Shares of Total Collaborative Defence Equipment Procurement 6.3 National and Collaborative Defence R&T: Absolute Values and Percentage Shares of Total Defence R&T page 36 6.4 European Collaborative Defence R&T: Absolute Values and Percentage Shares of Total Collaborative Defence R&T page 37 7. COLLECTIVE BENCHMARKS 7.1 Benchmark 1: Equipment Procurement (including R&D/R&T): 20% of the Total Defence Spending page 39 7.2 Benchmark 2: European Collaborative Equipment Procurement: 35% of the Total Defence Equipment Spending page 40 7.3Benchmark 3: Defence R&T: 2% of the Total Defence Spending page 41 7.4 Benchmark 4: European Collaborative Defence R&T: 20% of the Total Defence R&T Spending page 42 8. NOTES page 44 9. DEFINITIONS page 45 3

1. TOTAL DEFENCE EXPENDITURE 1.1 Defence Expenditure (Current Prices): Absolute Values and Percentage Change on Previous Year 210 Bln 5,3 6,0% 5,0% 205 Bln 4,3 4,0% 200 Bln 3,0% 195 Bln 1,5 2,3 1,4 2,0% 1,0% 190 Bln 185 Bln 180 Bln -0,2-0,6-1,2-1,0-1,4-2,6 193,0 201,3 204,3 201,4 196,1 195,8 193,5 192,3 190,4 194,8 205,1 207,9 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e Total Defence Expenditure % Change on Previous Year 0,0% -1,0% -2,0% -3,0% 4

DEFENCE DATA 2006-2016 1.2 GDP and Defence Expenditure (Current Prices) 16.000 Bln 207,9 210 Bln 15.000 Bln 201,3 204,3 201,4 205,1 205 Bln 14.000 Bln 13.672 14.444 14.544 200 Bln 13.000 Bln 12.000 Bln 11.000 Bln 193,0 10.636 11.316 12.072 12.272 196,1 11.584 195,8 12.046 193,5 12.411 12.653 192,3 12.875 190,4 194,8 195 Bln 190 Bln 185 Bln 10.000 Bln 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e 180 Bln GDP Total Defence Expenditures 5

1.3 Defence Expenditure (Current Prices) as a Share of GDP and Government Expenditure 210 Bln 4,5% 205 Bln 193,0 201,3 204,3 201,4 196,1 195.8 193,5 192,3 190,4 194,8 205,1 207,9 4,0% 3,5% 200 Bln 3,0% 195 Bln 190 Bln 185 Bln 180 Bln 3,86% 1,81% 3,80% 1,78% 3,70% 1,69% 3,52% 1,64% 3,35% 1,69% 3,24% 1,63% 3,19% 1,56% 3,09% 1,52% 3,03% 1,49% 2,97% 1,42% 3,04% 1,42% 3,08% 1,43% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e Defence Expenditure Defence expenditure as % of Government Expenditure Defence Expenditure as % of GDP 2,5% 2,0% 1,5% 1,0% 0,5% 0,0% 6

DEFENCE DATA 2006-2016 1.4 Defence Expenditure in Current and Constant 2010 Prices 220 Bln 210 Bln 204,4 208,2 205,6 202,4 200,1 205,1 207,9 200 Bln 190 Bln 180 Bln 193,0 201,3 204,3 201,4 196,1 195,8 193,5 191,2 192,3 185,4 190,4 182,6 194,8 183,8 188,3 193,1 170 Bln 160 Bln 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e Defence Expenditure (Constant 2010 Prices) Defence Expenditure (Current Prices) 7

1.5 Defence Expenditure: Absolute Values (Constant 2010 Prices) and Percentage Change on Previous Year (Current and Constant 2010 Prices) 220 Bln 5,3 6,0% 5,0% 210 Bln 4,3 4,0% 200 Bln 190 Bln 180 Bln 170 Bln 204,4 1,9 208,2 1,5 205,6-1,2 202,4-1,4-1,6 200,1-1,1-2,6 195,8-0,2-2,2 191,2-1,2-2,4-0,6-1,0 185,4-3,0-1,5 182,6 2,3 0,7 183,8 2,4 188,3 2,5 1,4 193,1 3,0% 2,0% 1,0% 0,0% -1,0% -2,0% -3,0% 160 Bln -4,0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e Defence Expenditure (Constant 2010 Prices) % Change on Previous Year (Constant 2010 Prices) % Change on Previous Year (Current Prices) 8

DEFENCE DATA 2006-2016 1.6 GDP and Defence Expenditure (Constant 2010 Prices) 16.000 Bln 220 Bln 15.000 Bln 204,4 208,2 205,6 202,4 210 Bln 14.000 Bln 13.000 Bln 12.000 Bln 11.000 Bln 11.264 11.708 12.149 12.334 200,1 11.820 195,8 12.046 191,2 12.259 12.202 185,4 12.346 182,6 12.901 183,8 13.261 188,3 13.507 193,1 200 Bln 190 Bln 180 Bln 10.000 Bln 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e 170 Bln GDP Defence Expenditure 9

1. TOTAL DEFENCE EXPENDITURE The evolution of the EDA Member States defence spending over the past twelve years can be clearly divided into three major periods. After two years of a continuous nominal increase from 2005 to 2007, the total defence expenditure has been declining for the six consecutive years, largely due to the effects of the 2008 financial crisis. During the 2008-2013 period characterized by significant spending cuts in all defence expenditure categories, except operation and maintenance which remained relatively stable, the EDA MS have lost collectively over 23 billion, or 11,2% of their total 2007 defence spending in real terms 2. The six-year-long decline was reversed in 2014, when the total defence expenditure of the EDA MS increased by 4,3 billion or 2,3%, compared to the record-low level of 190 billion in 2013. In 2015, the total defence spending increased further (+5,3%) to reach 205,1 billion, the highest nominal value to date. In real terms, however, the increase was half that: 4,5 billion or 2,4%. The provisional 2016 data indicates a subsequent nominal increase of almost 3 billion or 1,4%, suggesting that the European defence spending has not only reached and surpassed its pre-crisis level, but it seems to be on a longer-term upwards trend. The comparison of the evolution of the EDA MS GDP with that of the total defence expenditure suggests that changes in defence spending are more linked to the financial expectations for the GDP than the actual GDP. Since 2005, the total EDA MS GDP decreased for the first time in 2009, whereas defence spending cuts occurred already a year earlier and continued up until 2013, despite the economic recovery which began in 2010, as GDP growth shows. The result of that was that the total defence expenditure as a share of GDP has been constantly declining during these years, and continued to do so even when the actual defence spending increased, owing to a faster growing GDP. In 2014-2015, the total defence expenditure relative to GDP has plateaued at 1,42%, and in 2016, it is estimated to have slightly increased to 1,43% 3. Similarly, the proportion of the total defence expenditure in the total general government expenditure has been annually decreasing during 2005-2014, but it increased in 2015 to reach 3,04% and is estimated to have grown further in 2016 to 3,08%. 2. To ensure a real comparison over years, the data from 2005 to 2016 e has been adjusted to 2010 economic conditions (Source of deflator: European Commission, DG ECFIN, based on the weight of the EU-28). 3. As of 2014, reduced defence expenditure shares in relation to GDP in most Member States can partially be explained by the new GDP accounting methodology implemented by Eurostat, following the introduction of the new European System of National and Regional Accounts (ESA 2010). 10

DEFENCE DATA 2006-2016 2. DEFENCE EXPENDITURE BREAKDOWN 2.1 Defence Expenditure Breakdown (Current Prices) Categories of Defence Expenditure TotaL Defence Expenditure 120 Bln 110 Bln 100 Bln 109,0 106,0 204,3 107,2 100,5 100,9 102,4 99,9 95,9 99,8 102,2 205,1 100,8 207,9 210 Bln 205 Bln 90 Bln 201,3 201,4 80 Bln 200 Bln 70 Bln 60 Bln 50 Bln 196,1 195,8 193,5 192,3 190,4 194,8 195 Bln 40 Bln 30 Bln 42,9 46,1 43,3 44,1 43,7 44,7 44,9 46,8 52,2 55,5 54,9 190 Bln 20 Bln 39,0 41,9 42,0 40,9 42,9 38,3 39,0 37,6 34,7 39,3 42,5 185 Bln 10 Bln 5,8 4,6 6,2 4,1 5,8 3,2 5,4 5,3 5,4 3,0 4,9 3,1 4,5 4,1 4,4 5,9 4,6 3,5 4,9 3,2 5,2 4,5 0 Bln 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e Personnel Investment: Equipment Procurement + R&D Other Defence Expenditure Infrastructure / Construction Operation & Maintenance Total Defence Expenditure 180 Bln 11

2.2 Defence Expenditure Breakdown (Current Prices): Percentage Change on Previous Year by Category of Expenditure 15,0% 12,5% 11,7 13,2 10,0% 8,4 7,5% 5,0% 2,5% 0,0% -2,5% -5,0% -2,7 6,1 7,5 7,5 1,5 1,1 0,2 2,7 2,0-1,4-2,6 0,4 0,7 4,8-0,2-1,0 1,6-1,2 2,4-2,5 1,7 0,4-0,6-1,0-4,0-2,2-3,6 4,2 4,1 4,1 2,3 2,5 6,5 6,4 5,3 5,9 1,4-1,4-1,1-7,5% -10,0% -12,5% -6,3-6,2-6,3-6,8-9,5-10,5-8,6-7,6-15,0% 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016e Personnel Investment: Equipment Procurement + R&D Total Defence Expenditure Infrastructure / Construction Operation & Maintenance 12

DEFENCE DATA 2006-2016 2.3 Defence Expenditure Breakdown (Current Prices): Percentage Shares of Total Defence Expenditure 100% 90% 54,1% 51,9% 53,2% 51,2% 51,5% 52,9% 51,9% 50,4% 51,2% 49,8% 48,5% 80% 70% 60% 50% 40% 3,0% 2,8% 2,8% 2,9% 2,9% 2,5% 2,3% 2,3% 2,3% 2,4% 2,5% 19,4% 20,5% 20,9% 20,8% 21,9% 19,8% 20,3% 19,7% 17,8% 19,1% 20,5% 30% 20% 21,3% 22,6% 21,5% 22,5% 22,3% 23,1% 23,3% 24,6% 26,8% 27,1% 26,4% 10% 0% 2,3% 2,0% 1,6% 2,7% 1,5% 1,6% 2,1% 3,1% 1,8% 1,6% 2,2% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e Personnel Investment: Equipment Procurement + R&D Other Defence Expenditure Infrastructure / Construction Operation & Maintenance 13

2. DEFENCE EXPENDITURE BREAKDOWN Personnel expenditure constitutes the largest part of the total defence expenditure of the EDA MS. Being a less flexible cost than other defence expenditure categories, it, nevertheless, decreased substantially (-12%) from its highest level of 109 billion achieved in 2006 to its lowest of 96 billion in 2013. In 2014, personnel expenditure increased by over 4% and in 2015 by another 2,4% to reach 102 billion, while in 2016, it is estimated to have slightly decreased again (-1,4%). The share of personnel expenditure in total defence spending has been gradually decreasing. If in 2006 it accounted for more than 54% of the total defence expenditure - the highest proportion recorded to date - in 2015, it was less than 50%, and in 2016, it is estimated to have decreased further to 48,5%, a result driven by a more substantial increase in other defence spending categories. The second highest defence expenditure category - operation and maintenance took the opposite direction. Although it decreased by almost 3 billion or 6,2% from 2007 to 2008, in the following years operation and maintenance expenditure remained relatively stable at around 44 billion, and since 2011, it has been increasing at an average annual growth rate of 5% to reach 55,5 billion in 2015. Its relative proportion in the total defence spending has also been increasing, and in 2015, it stood at 27,1% (as opposed to 21,3% in 2006). According to 2016 estimates, operation and maintenance expenditure has decreased slightly both in absolute (by 1,1%) and relative (by 0,7 percentage points) terms. The peak of defence investment (comprising defence equipment procurement and R&D) was reached in 2010, when it amounted to 42,9 billion accounting for 21,9% of the total defence expenditure. Since then, defence investment has been declining both in absolute and relative terms to its lowest 2014 level of 34,7 billion making up 17,8% of the total defence spending. With an unprecedented increase of 4,6 billion (+13,2%) in 2015 and a subsequent estimated increase of 3,3 billion (+8,4%) in 2016, defence investment currently amounting to 42,5 billion (2016 e) appears to be on a promising upwards trend. 14 Annual expenditure on infrastructure has been relatively stable during the 2006-2015 period, amounting to 5 billion on average. Its share in the total defence spending ranged between 2,3% (from 2012 to 2014) and 3,0% (in 2007) during the same period. In 2015 and 2016 e, infrastructure expenditure increased by 6,5% and 5,9%, respectively, and accounted for 2,4% of the total defence expenditure, on average.

DEFENCE DATA 2006-2016 3. DEFENCE PERSONNEL 3.1 Civilian and Military Personnel: Absolute Numbers and Percentage Shares of Total Defence Personnel Thousands 2.000 1.800 1.600 1.400 1.200 1.000 800 600 400 200 0 (20,9%) (79,1%) (19,9%) (80,1%) (19,4%) (80,6%) (20,4%) (79,6%) (19,4%) (80,6%) (19,5%) (80,5%) (22,6%) (77,4%) (22,1%) (77,9%) (21,9%) (78,1%) (21,2%) (78,8%) 484 1.834 457 1.842 434 1.801 427 1.669 390 1.620 374 1.545 422 1.448 407 1.436 400 1.423 380 1.411 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Civilian Personnel Military Personnel 15

3.2 Military Personnel Breakdown: Absolute Numbers Thousands 1000 929 928 898 889 881 824 800 767 746 720 701 600 400 200 340 337 227 357 331 226 353 322 223 312 248 216 295 229 211 286 228 202 260 219 197 251 249 188 268 241 191 252 242 188 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Army Maritime Air Force Other 16 The figures may not add up to the totals provided due to rounding and due to the fact that not all Member States provide a precise breakdown of military personnel.

DEFENCE DATA 2006-2016 3.3 Military Personnel Breakdown: Percentage Change on Previous Year 3% 2% 1% 0% -1% -2% -3% 0,5-0,1-1,7-0,6-3,2-2,7-1,3-2,3-1,0-3,1-3,1-0,9-5,6-2,4-2,9-6,4-3,1-4,2-6,9-8,9-2,6-2,8-3,5-4,7-3,4-4,0 1,8-2,6 4,3-1,7-0,8-0,9-0,9-4% -5% -4,6-6% -7% -8% -7,3-6,3-9% -10% 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 Army Air Force Maritime Total Military Personnel (including Other Forces) 17

3. DEFENCE PERSONNEL During 2006-2015, the total number of the EDA MS defence personnel decreased by more than 500 thousand or 23%, with the biggest annual decrease recorded in 2009 (-6,2%). The ratio of military to civilian personnel remained roughly at 4 to 1 during the period, as both military and civilian personnel were affected by reductions. Within the military personnel (Army, Maritime, Air Force and Other), the trend varied. Army Forces have been decreasing during the whole period, with the biggest annual reductions in 2011 and 2012 of 6,4% and 6,9%, respectively. Between 2006 and 2015, Army personnel was reduced by almost a quarter, from 929 thousand to 701 thousand. Naval Forces were affected the least by the reductions in manpower. Maritime personnel decreased by over 17% from 227 thousand in 2006 to 188 thousand in 2015. The biggest annual decrease took place in 2011 and 2013, resulting in a loss of 4,2% and 4,7%, respectively. Air Force personnel has been annually decreasing from 2006 to 2014, with the largest drop in 2012 (-8,9%), which resulted in a total reduction of over 28%. However, in 2015, Air Forces increased by 4,3% and stood at 252 thousand. Other defence personnel that does not belong to any of the aforementioned categories was reduced by almost 29%, from 340 thousand in 2006 to 242 thousand in 2015. 18

DEFENCE DATA 2006-2016 4. DEPLOYABILITY-SUSTAINABILITY 4.1 Deployable (Land) and Sustainable (Land) Forces: Absolute Numbers Thousands 500 450 400 350 434 445 465 443 450 427 450 481 417 428 300 250 200 150 100 102 111 125 107 106 111 109 110 79 82 50 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Deployable (Land) Forces Sustainable (Land) Forces 19

4.2 Deployable (Land) Forces, Sustainable (Land) Forces and Average Number of Troops Deployed as a Share of Total Military Personnel/Deployable (Land) Forces 35,0% 32,5% 30,0% 27,5% 25,0% 22,5% 20,0% 17,5% 15,0% 12,5% 10,0% 7,5% 5,0% 2,5% 0% 27,0 24,8 26,0 24,1 23,6 24,2 23,5 23,0 19,0 19,2 23,6 24,1 25,8 26,6 27,8 27,6 31,0 33,5 29,3 30,4 4,6 4,2 4,5 4,1 4,1 3,5 3,4 4,0 2,2 2,2 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Average Number of Troops Deployed as % of Total Military Personnel Deployable (Land) Forces as % of Total Military Personnel Sustainable (Land) Forces as % of Deployable (Land) Forces 20

DEFENCE DATA 2006-2016 4.3 Costs of Deployed Operations (Current Prices): Absolute Values and Percentage Change on Previous Year 12 Bln 10 Bln 29,3 35% 30% 25% 20% 8 Bln 6 Bln 4 Bln 11,4 1,8 5,9 6,8-4,2 15% 10% 5% 0% -5% -10% -19,3-17,1-15% 2 Bln -25,1-20% 0 Bln 6,7 8,7 9,7 9,8 10,4 11,1 9,0 7,4 5,6 5,3 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Operations Costs (Deployed) % Change on Previous Year -25% -30% 21

4.4 Average Number of Troops Deployed: Absolute Numbers and Percentage Change on Previous Year Thousands 90 17,2% % Change 20% 80 70 60 50 84 77-7,9% 80 3,6% 68 66-2,2% 54-7,8% 50 58-0,1% 10% 0% -10% 40-15,5% -19,0% -20% 30 32 32-30% 20 10-40% 0-45,5% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Average Number of Troops Deployed % Change on Previous Year -50% 22

DEFENCE DATA 2006-2016 4. DEPLOYABILITY-SUSTAINABILITY In 2006, Deployable (Land) Forces accounted for 23,6% of the total military personnel. Ten years later, in 2015, this share increased to 30,4%. On the other hand, Sustainable (Land) Forces as a share of Deployable (Land) Forces reduced from 23,5% in 2006 to 19,2% in 2015. In 2015, the total EDA MS Deployable (Land) Forces amounted to approximately 428 thousand (2,7% more than in 2014) of which, Sustainable (Land) Forces constituted approximately 82 thousand. The ratio of Deployable to Sustainable (Land) Forces was roughly 4 to 1 from 2006 to 2013, but since 2014, it stood at 5 to 1. The costs of deployed operations reached its peak in 2011 with 11,1 billion, and since then, it has been reducing annually. In 2015, operations costs amounted to 5,3 billion. 23

5. DEFENCE INVESTMENT 5.1 Defence Investment Breakdown: Absolute Values and Percentage Shares of Total Defence Investment 45 Bln 40 Bln 35 Bln 30 Bln 9,8 (25,1%) 9,7 8,7 (23,1%) (20,8%) 8,4 (20,5%) 8,6 (20,0%) 7,8 7,5 (20,3%) (19,2%) 7,6 (20,2%) 8,8 (25,3%) 9,2 (23,4%) 8,8 (20,7%) 25 Bln 20 Bln 15 Bln 10 Bln 5 Bln 0 Bln 29,2 32,2 33,3 32,5 34,3 30,6 31,5 30,0 25,9 30,1 33,7 (74,9 %) (76,9%) (79,2%) (79,5%) (80,0%) (79,7%) (80,8%) (79,8%) (74,7%) (76,6%) (79,3%) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e Defence R&D (including R&T) Defence Equipment Procurement 24

DEFENCE DATA 2006-2016 5.2 Defence R&D Breakdown: Absolute Values and Percentage Shares of Total Defence R&D 11 Bln 10 Bln 9 Bln 8 Bln 7 Bln 6 Bln 7,1 7,1 6,3 6,1 6,5 5,6 5,3 5,3 6,7 7,0 6,7 (72,8%) (73,7%) (71,6%) (73,1%) (75,7%) (71,8%) (71,6%) (70,5%) (76,1%) (76,4%) (76,3%) 5 Bln 4 Bln 3 Bln 2 Bln 1 Bln 0 Bln 2,7 2,5 2,5 2,3 2,1 2,2 2,1 2,2 2,1 2,2 2,1 (27,2%) (26.31%) (28,4%) (26,9%) (24,3%) (28,2% ) (28,4%) (29,5%) (23,9%) (23,6%) (23,7%) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e 2016e Remaining Defence R&D Expenditure (R&T excluded) Defence R&T 2015-2016 defence R&T is estimated based on 2014 data, since not all Member States reported their R&T expenditure in 2015 and 2016. 25

5.3 Defence R&D Expenditure: Absolute Values and Percentage Change on Previous Year 12 Bln 10 Bln 8 Bln 6 Bln 4 Bln 2 Bln 0 Bln 16,0 1,9 4,5-1,3 1,5-4,0-3,9-4,1-9,4-9,2 9,8 9,7 8,7 8,4 8,6 7,8 7,5 7,6 8,8 9,2 8,8 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e Defence R&D % Change on Previous Year 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% -12% 26

DEFENCE DATA 2006-2016 5.4 Defence R&D as a Share of Total Defence Expenditure and Total Investment 30% 25% 25,1 25,3 23,4 20% 23,1 20,8 20,5 20,0 20,3 19,2 20,2 20,7 15% 10% 5% 4,9 4,7 4,3 4,3 4,4 4,0 3,9 4,0 4,5 4,5 4,2 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e R&D as % of Total Defence Expenditure R&D as % of Total Investment 27

5.5 Defence R&T Expenditure: Absolute Values and Percentage Change on Previous Year 3 Bln 5,2 5,3 6% 3,1 4% 2,5 Bln 2% 2 Bln 1,5 Bln 1 Bln -4,5-2,1-9,2-7,9-2,9-6,1-3,7 0% -2% -4% -6% -8% -10% -12% -14% 0,5 Bln -16% 0 Bln 2,7 2,5 2,5 2,3 2,1 2,2 2,1 2,2 2,1 2,2 2,1 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e 2016e Defence R&T % Change on Previous Year -18% -20% 28 2015-2016 defence R&T is estimated based on 2014 data, since not all Member States reported their R&T expenditure in 2015 and 2016.

DEFENCE DATA 2006-2016 5.6 Defence R&T as a Share of Total Defence Expenditure, Total Investment and R&D 30% 27,2 28,4 26,9 28,2 28,4 29,5 25% 26,3 20% 24,3 23,9 23,6 23,7 15% 10% 5% 6,8 6,1 5,9 5,5 4,9 5,7 5,4 6,0 6,1 5,5 4,9 0% 1,32 1,24 1,23 1,15 1,06 1,13 1,10 1,17 1,08 1,06 1,00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e 2016e R&T as % of Total Defence Expenditure R&T as % of Total Investment R&T as % of R&D 2015-2016 defence R&T is estimated based on 2014 data, since not all Member States reported their R&T expenditure in 2015 and 2016. 29

5.7 Total Defence Expenditure and Investment per Capita (Current and Constant 2010 Prices) Defence Investment per Capita 90 Total Defence Expenditure per Capita 450 440 85 80 75 427 413 420 417 411 409 404 395 407 411 430 420 410 400 70 396 389 384 386 379 387 374 382 390 380 65 372 364 365 370 360 60 80 83 86 86 85 86 83 84 86 86 77 76 78 75 75 72 69 65 78 72 84 78 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e Total Defence Investment per Capita (Current Prices) Total Defence Investment per Capita (Constant 2010 Prices) Total Defence Expenditure per Capita (Current Prices) Total Defence Expenditure per Capita (Constant 2010 Prices) 350 30

DEFENCE DATA 2006-2016 5.8 Total Defence Expenditure and Investment per Military (Current Prices) Defence Investment per Military 30.000 Total Defence Expenditure per Military 160.000 25.000 20.000 109.764 110.900 111.845 117.556 120.857 125.265 132.760 132.591 136.872 145.399 140.000 120.000 100.000 15.000 80.000 10.000 60.000 5.000 0 21.252 22.743 23.325 24.502 26.449 24.813 26.907 26.145 24.374 27.830 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Defence Investment per Military Total Defence Expenditure per Military 40.000 20.000 31

5.9 Total Defence Expenditure and Investment per Military (Constant 2010 Prices) Defence Investment per Military 30.000 Total Defence Expenditure per Military 160.000 25.000 128.032 133.490 140.000 20.000 113.565 119.953 120.857 123.729 127.145 129.159 120.000 111.611 112.410 100.000 15.000 80.000 10.000 60.000 5.000 0 21.988 22.889 23.443 25.002 26.449 24.508 25.948 25.072 23.001 25.550 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Defence Investment per Military Total Defence Expenditure per Military 40.000 20.000 32

DEFENCE DATA 2006-2016 5. DEFENCE INVESTMENT Defence investment comprises defence equipment procurement expenditure traditionally responsible for the largest share of investment expenses of all EDA MS and defence Research & Development (R&D) expenditure, which also includes defence Research and Technology (R&T) expenditure. Defence equipment procurement, accounting for 75% to 80% of the total defence investment, was the main driving force behind the developments of the latter. Despite small annual fluctuations, expenditure earmarked for equipment procurement has been increasing since 2006 and reached its peak in 2010 with 34,3 billion. The total defence investment peaked that same year at 42,9 billion, in contrast to the total defence expenditure, which was still on a decline. Both equipment procurement expenditure and total defence investment have been decreasing since then to their respective lowest levels of 25,9 billion and 34,7 billion in 2014. This was again to the contrary of the total defence spending, which increased for the first time that year, after a six-year-long decline. In 2015, defence equipment procurement increased by over 16%, compared to the previous year, to 30,1 billion, and it is estimated to have increased by another 12% in 2016 to 33,7 billion. R&D expenditure, accounting for the remaining 20% to 25% of the total defence investment, has been decreasing annually from 2006 to 2012, except for a small increase (+1,9%) in 2010. As a result, R&D expenditure in 2012 was at its lowest level, amounting to 7,5 billion, 24% lower than its 2006 value. During the next three years, 2013-2015, the EDA MS defence R&D expenditure was increasing, most notably in 2014, when it jumped by 16%. In 2015, it grew by another 4,5% to 9,2 billion, while in 2016, it is estimated to have decreased by 4%. During the period 2006-2015, R&D accounted for 4% to 5% of the total defence expenditure. The lowest share 3,9% was recorded in 2012, the year when R&D part in the total defence investment was also the lowest (19,2%). In 2006, defence R&T expenditure was 2,7 billion and it has been decreasing since then (except for the minor increases in 2011, 2013 and 2015) to 2,1 billion in 2016. During this period, the total defence R&T expenditure decreased by 22%. 2015 and 2016 defence R&T figures are estimated based on 2014 data, since not all EDA MS reported their defence R&T expenditure for these years. 33

6. COLLABORATIVE INVESTMENT 6.1 National and Collaborative Defence Equipment Procurement: Absolute Values and Percentage Shares of Total Equipment Procurement 40 Bln 35 Bln 30 Bln 29,2 32,2 33,3 32,5 34,3 30,6 31,5 30,0 25,9 30,1 25 Bln 20 Bln 15 Bln 22,5 (77,2%) 25,4 (78,8%) 25,2 (75,7%) 24,3 (74,7%) 26,6 (77,6%) 22,7 (74,1%) 25,5 (81,0%) 25,2 (84,1%) 20,2 (77,9%) 24,7 (82,0%) 10 Bln 5 Bln 6,7 (22,8%) 6,8 (21,2%) 8,1 (24,3%) 8,2 (25,3%) 7,7 (22,4%) 7,9 (25,9%) 6,0 (19,0%) 4,8 (15,9%) 5,7 (22,1%) 5,4 (18,0%) 0 Bln 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 34 Total Defence Equipment Procurement National Defence Equipment Procurement Collaborative Defence Equipment Procurement Since 2012, Collaborative Equipment Procurement data is partial, as not all Member States were able to provide the data.

DEFENCE DATA 2006-2016 6.2 European Collaborative Defence Equipment Procurement: Absolute Values and Percentage Shares of Total Collaborative Defence Equipment Procurement 9.000 Mln 8.000 Mln 7.000 Mln 6.000 Mln 5.000 Mln 4.000 Mln 6.666 91,2% 6.8 46 89,2% 8.072 87,6% 8.2 33 7.694 7.912 94,7% 92,7% 95,6% 5.999 94,6% 4.755 5.727 89,8% 5.416 88,8% 100% 98% 96% 94% 92% 90% 88% 3.000 Mln 86,8% 86% 2.000 Mln 84% 1.000 Mln 0 Mln 6.082 6.107 7.068 7.144 7.286 7.338 5.732 4.496 5.141 4.810 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 82% 80% Collaborative Defence Equipment Procurement European Collaborative Defence Equipment Procurement European Collaborative Equipment Procurement as % of Total Collaborative Defence Equipment Procurement Since 2012, Collaborative Equipment Procurement data is partial, as not all Member States were able to provide the data. 35

6.3 National and Collaborative Defence R&T: Absolute Values and Percentage Shares of Total Defence R&T 3.000 Mln 2.750 Mln 2.500 Mln 2.250 Mln 2.000 Mln 1.750 Mln 1.500 Mln 2.661 2.276 (85,5%) 2.542 2.164 (85,1%) 2.487 2.035 (81,8 %) 2.258 1.936 (85,7%) 2.079 1.817 (87,4%) 2.188 1.880 (85,9 %) 2.124 1.917 (90,3%) 2.236 2.033 (90,9 %) 2.100 1.915 (91,2 %) 2.165 1.996 (92,2%) 1.250 Mln 1.000 Mln 750 Mln 500 Mln 250 Mln 385 (14,5%) 378 (14,9 %) 452 (18,2%) 322 (14,3 %) 262 (12,6 %) 308 (14,1%) 207 (9,7%) 203 (9,1%) 185 (8,8%) 169 (7,8%) 0 Mln 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e Total Defence R&T National Defence R&T Collaborative Defence R&T 36 Since 2012, Collaborative R&T data is partial, as not all Member States were able to provide the data. 2015 total defence R&T is estimated based on 2014 data, since not all Member States reported their R&T expenditure for that year.

DEFENCE DATA 2006-2016 6.4 European Collaborative Defence R&T: Absolute Values and Percentage Shares of Total Collaborative Defence R&T 500 Mln 100% 450 Mln 400 Mln 350 Mln 300 Mln 250 Mln 200 Mln 385 378 88,1% 452 91,2% 90,0% 322 93,1% 262 84,2% 308 207 82,5% 203 93,3% 1 85 92,8% 169 95% 90% 85% 80% 75% 150 Mln 100 Mln 50 Mln 0 Mln 67,6% 66,1% 254 333 412 290 244 260 140 168 172 156 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 70% 65% 60% Collaborative Defence R&T European Collaborative Defence R&T as % of Total Collaborative Defence R&T European Collaborative Defence R&T Since 2012, Collaborative R&T data is partial, as not all Member States were able to provide the data. 37

6. COLLABORATIVE INVESTMENT The difficulty of some EDA MS to provide collaborative defence equipment procurement and R&T data has resulted in EDA s inability to compile and present the EDA MS collaborative spending at the aggregate level. It is, therefore, highlighted that since 2012, the aforementioned data is only presented as part of the EDA defence data gathering project, but they do not represent a comprehensive picture of the EDA MS respective expenditure. Collaborative defence equipment procurement share in the total defence equipment procurement expenditure of the reporting EDA MS ranged from the lowest of 18,0% in 2015 to the highest of 25,9% in 2011. The European collaboration constituted the major component of the total collaborative procurement expenditure, ranging between 86,8% (2009) and 95,6% (2012), and in 2015, it accounted for 88,8%. It is estimated that collaborative defence R&T as a proportion of the total defence R&T expenditure was the lowest in 2015, amounting to 7,8%, while its highest share of 18,2% was observed in 2008. Out of the total collaborative defence R&T expenditure, the majority was European collaboration, covering, on average, close to 90% throughout the decade. The exception was the years 2006 and 2012, when the respective shares amounted to 66% and 68%. In 2015, almost 93% of the total collaborative defence R&T was done at the European level. 38

DEFENCE DATA 2006-2016 7. COLLECTIVE BENCHMARKS 7.1 Benchmark 1: Equipment Procurement (including R&D/R&T): 20% of the Total Defence Spending 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 19,4 20,5 20,9 20,8 21,9 19,8 20,3 19,7 17,8 19,1 20,0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Benchmark 1 Remaining Defence Expenditure Investment: Equipment Procurement + R&D 39

7.2 Benchmark 2: European Collaborative Equipment Procurement: 35% of the Total Defence Equipment Spending 100% 90% 79,2 81,1 78,7 78,0 78,8 76,0 81,8 85,0 80,1 84,0 65,0 80% 70% 60% 50% 40% 30% 20% 10% 0% 20,8 18,9 21,3 22,0 21,2 24,0 18,2 15,0 19,9 16.0 35,0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Benchmark 2 Remaining Defence Equipment Procurement European Collaborative Defence Equipment Procurement 40 Since 2012, Collaborative Equipment Procurement data is partial, as not all Member States were able to provide the data.

DEFENCE DATA 2006-2016 7.3 Benchmark 3: Defence R&T: 2% of the Total Defence Spending 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 1,32 1,24 1,23 1,15 1,06 1,13 1,10 1,17 1,08 1,06 2,0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e Benchmark 3 Remaining Defence Expenditure Defence R&T 2015 defence R&T is estimated based on 2014 data, since not all Member States reported their R&T expenditure for that year. 41

7.4 Benchmark 4: European Collaborative Defence R&T: 20% of the Total Defence R&T Spending 100% 90% 90,4 86,9 83,4 87,2 88,2 88,1 93,4 92,5 91,8 92,8 80,0 80% 70% 60% 50% 40% 30% 20% 10% 0% 9,6 13,1 16,6 12,8 11,8 11,9 6,6 7,5 8,2 7,2 20,0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e Benchmark 4 Remaining Defence R&T European Collaborative Defence R&T 42 Since 2012, Collaborative R&T data is partial, as not all Member States were able to provide the data. 2015 total defence R&T is estimated based on 2014 data, since not all Member States reported their R&T expenditure for that year.

DEFENCE DATA 2006-2016 7. COLLECTIVE BENCHMARKS In 2007, EDA Member States agreed on a set of four collective benchmarks for investment. These benchmarks are collective and they apply to the total sum spent by all EDA MS together. There is no obligation in terms of timelines or translation of these benchmarks into national targets. Since 2012, EDA is no longer able to measure progress against two of the four collective benchmarks referring to European collaborative expenditure (Benchmark 2: European collaborative equipment procurement as a percentage of the total defence equipment procurement and Benchmark 4: European collaborative defence R&T as a percentage of the total defence R&T), as some Member States are unable to provide collaborative expenditure figures due to their inherent accounting limitations. For this reason, the collective results for these benchmarks, based on the available data, are only presented graphically with no further analysis. Benchmark 1: Equipment procurement (including R&D/R&T): 20% of the total defence spending. This is the only benchmark that has been met or nearly met (>19%) during the decade 2006-2015, with the exception of 2014, when it dropped to 17,8%, the lowest share to date. The highest proportion was achieved in 2010, when defence investment accounted for almost 22% of the total defence expenditure. Benchmark 2: European collaborative equipment procurement: 35% of the total defence equipment spending. Benchmark 3: Defence R&T: 2% of the total defence spending. The collective target set for R&T expenditure has been the most challenging one, as the desirable level relative to the total defence spending has never been met during the decade. More than that, the highest share 1,32% achieved collectively by the EDA MS in 2006 is estimated to have reduced to 1,06% in 2015. Benchmark 4: European collaborative defence R&T: 20% of the total defence R&T spending. 43

8. NOTES EDA receives data from the Ministries of Defence of its 27 Member States (MS). Occasionally, national data is revised, and this may have an impact on the overall aggregated figures. Please check Defence Data Portal on the EDA s website regularly for updates: http://eda.europa.eu/info-hub/defence-data-portal Data in this booklet is at aggregate level, and it may differ from other sources due to, inter alia, rounding. Due to rounding, some totals may not correspond with the sum of the separate figures. For some spending categories, a margin of error exists, as accounting systems of the MS differ. Nevertheless, the data provided in the booklet represents the best publicly available figures. Data on GDP, general government expenditure and population, as well as price deflator, is taken from the annual macro-economic database of the European Commission s Directorate-General for Economic and Financial Affairs (DG ECFIN). This data is revised twice a year, and thus may have an impact on some of the data calculated by EDA.. 44

DEFENCE DATA 2006-2016 9. DEFINITIONS Data collection is based on the list of indicators and their definitions approved by the Agency s Ministerial Steering Board. The definitions provided below have been shortened and edited for the purpose of this publication. Total defence expenditure: total Ministry of Defence (MoD) expenditure plus other defence-related expenditure allocated by other governmental institutions (other Ministries special budgetary lines). Civilian personnel: the authorised strength of all civilian personnel on 31 December of each year employed by all military establishments and the armed forces. Military personnel: the authorised strengths of all active military personnel on 31 December of each year. Personnel expenditure: all personnel-related expenditure for military and civilian personnel, including from non- MoD sources. Defence equipment procurement expenditure: expenditure for all major equipment categories. Research and development (R&D): expenditure for any R&D programmes up to the point where expenditure for production of equipment starts to be incurred. Research and technology (R&T): expenditure for basic research, applied research and technology demonstration for defence purposes. It is a subset of R&D. Investment: defence equipment procurement and R&D (including R&T) expenditure. 45

Operation and maintenance (O&M) expenditure: covers O&M (spare parts and supplies) of major equipment, other equipment and supplies, and costs related to maintaining utilities and infrastructure. Other expenditure: all other expenditure that cannot be attributed to any of the above expenditure categories. European collaboration (a subset of collaboration): agreement between at least two EU Member States Ministries of Defence for project or programme contracts. Possible non-eu partners share in such contracts is lower than 50%. Other collaborative expenditure: all collaborative expenditure that does not fall under the European collaboration definition. Average number of troops deployed: average number of troops (all Armed Forces) deployed throughout the year for crisis management operations. Deployable (land) forces: number of (land) forces troops structured, prepared, and equipped for deployed operations. Sustainable (land) forces: number of (land) forces troops undertaking or planned for sustained operations (mid- to long-term). It is a subset of Deployable (land) forces. Operations costs (deployed): all national expenditure to cover incremental (extra) costs linked to deployed operations outside the EU Member States territory. 46

DEFENCE DATA 2006-2016 NOTES 47

48 NOTES

DEFENCE DATA 2006-2016 49

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