Estonian Defense Minister Hanno Pevkur stated that as NATO allies increase their military spending, the prices of defense materials across Europe continue to rise, with some categories seeing increases of over 50% in the past two years.
Speaking at the Lennart Meri Security Conference in Tallinn on Saturday, Pevkur noted, "Prices are rising, and I frequently discuss this situation with our country's arms procurement officials."
He added, "We have found that for the same types of military equipment we procured two years ago, the prices for increased procurement now have risen by 50% to 60% for some categories."
The sharp increase in prices for weapons and various military equipment is hindering Europe's plans for rapid rearmament and posing challenges for NATO's military budget planning. Following the shift in the U.S. strategic focus, Europe also bears most of the costs for delivering aid supplies to Ukraine in response to the Russia-Ukraine conflict.
Pevkur pointed out the current predicament of a vicious cycle: there is a shortage of military equipment supplies in national markets, but European defense companies are reluctant to increase investment and expand production before governments officially sign procurement contracts.
Pevkur emphasized that if the defense industry fails to recognize the trend of massive capital inflows into the market, it will be too late, and Europe will need to maintain high levels of military spending for the long term.
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