NDC 2-25 - Etude 7.2 - Luxembourg’s new defence strategy

Luxembourg’s new budget law proposal outlines the country’s future military spending, committing to 2% of Gross National Income (GNI) by the end of the year and a further increase to 5% by 2035, in line with North Atlantic Treaty Organization (NATO) objectives. The EUR 1.2 billion spending planned for 2026, representing a 56% year-on-year increase, comes at a time when many nations are activating EU fiscal flexibility measures. In addition to Luxembourg’s traditional defence expenditures on large aircraft and substantial foreign military aid, the government aims to increase the share of the budget devoted to investments, prioritising domestic projects that are expected to generate stronger economic returns.