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27 Feb 27. Bosnia and Herzegovina: Verdict against RS president will drive ethno-religious, regional tensions. On 26 February, the president of the Serb-dominated entity Republika Srpska (RS), Milorad Dodik, was found guilty of defying High Representative Christian Schmidt, the international official who oversees the Dayton peace agreement. The first instance court issued Dodik a one-year prison sentence and a six-year ban on holding public office. We assess that Dodik’s rejection of the ruling will increase ethno-religious tensions and exacerbate already complex and inefficient governance, reinforcing the country’s impasse. Following an urgent session of the RS government on the evening of 26 February, the assembly will highly likely reject the ruling at an extraordinary session later on 27 February. It will also highly likely enact laws prohibiting the operations of central judicial and law enforcement institutions within RS’ jurisdiction, which will almost certainly trigger a constitutional crisis. We also assess that the risk of regional tensions will increase, especially after Serbian, Hungarian and Russian officials condemned the verdict. (Source: Sibylline)
26 Feb 25. John Healey suggests defence spending hike half of Starmer’s figure. The UK defence secretary has suggested the real-terms increase in defence spending year-on-year will be only around half the GBP13.4bn figure cited by the prime minister. John Healey said in real terms, the figure “would be something over GBP6 bn” and claimed the “definition of defence numbers can be done in different ways”. Ministers have been accused of playing “silly games with numbers” over their assertion on Tuesday that the increase in defence spending to 2.5% of GDP by 2027 would mean GBP13.4 bn more would be spent on defence every year. Keir Starmer announced the increase in defence spending from its current 2.3% to 2.5% in response to “tyrant” Russian leader Vladimir Putin and amid uncertainty over the US’s commitment to European security. However it comes at the expense of the aid budget, which is being slashed.
“Let me spell it out, that means spending GBP13.4bn more on defence every year from 2027,” Starmer told the Commons.
Speaking to BBC Breakfast on Wednesday, Healey was asked about criticism of the figures and said “the definition of defence numbers can be done in different ways”.
He explained: “You can take it as a percentage of GDP, you can take it as cash terms.
“What Keir Starmer was talking about yesterday was the increase in hard cash that will be spent on defence in two years’ time compared to what’s being spent today.”
Pushed on whether the GBP13.4bn figure would be correct if the assumption was that the government did not increase the defence budget year-on-year in line with inflation, Healey said: “That’s a cash number.”
He added: “In real terms, taking in inflation, it would be something over GBP6 bn. Either way, this is a big boost for defence.”
Paul Johnson, the director of the Institute for Fiscal Studies, said on Tuesday that ministers were playing “silly games with numbers” and had provided “totally inconsistent figures” measured against different benchmarks.
The think tank’s associate director, Ben Zaranko, had earlier suggested the increase in spending would amount to around GBP6bn, rather than the GBP13.4bn the PM had indicated.
Zaranko said: “As a minor note to what is a major announcement, the prime minister followed in the steps of the last government by announcing a misleadingly large figure for the ‘extra’ defence spending this announcement entails.
“An extra 0.2% of GDP is around GBP6bn, and this is the size of the cut to the aid budget. Yet he trumpeted a GBP13bn increase in defence spending.
“It’s hard to be certain without more detail from the Treasury, but this figure only seems to make sense if one thinks the defence budget would otherwise have been frozen in cash terms.”
The Conservatives have also said the figures “don’t seem to be completely right”.
Shadow defence secretary James Cartlidge told Times Radio he supports the principle of increasing spending but he has some questions in relation to the figures.
“Because they don’t seem to be completely right in the cold light of day, it’s fair to say,” he told the station.
“But we obviously need to look at that, understand what it means, because there was this GBP13.4bn extra – that is the entire aid budget and the aid budget is being cut by, we understand about 40%, so we’re looking at where the difference arises.”
The commitment to increase spending comes ahead of the prime minister flying to Washington to meet US President Donald Trump. Trump has repeatedly called for European nations to increase the amount they are putting into defence budgets.
Healey told Sky News he thinks the US president will welcome the move and said the PM will be saying to his counterpart: “We have a special depth to our relationship that goes back decades, not just on security and defence, but that’s at its heart.
“Keir Starmer will say we want to see that relationship go from strength to strength.”
Starmer will follow French President Emmanuel Macron in visiting Trump in Washington DC, and Ukrainian leader Volodymyr Zelensky is expected to visit on Friday. Kyiv has agreed to a minerals deal which had been pushed for by the new US administration, according to Ukrainian officials, which could be signed off when their president visits Washington. Zelensky had claimed the 50% share of rare minerals initially demanded by America would have been akin to selling his nation, but Ukraine now appears satisfied the deal will lead to a continued flow of US military support in its war against Russia. (Source: PA/London South East)
25 Feb 25. Definition changes and projections: the truth of the UK’s defence plan. The UK has announced a timeline to increase defence spending as a proportion of GDP to 2.5% by 2027. The UK has finally set a timetable to increasing its spending on defence from 2.3% of GDP to 2.5% by 2027, before moving to 3% post-2029. While these top-level numbers provide the political slogan, the devil is in the detail. The increase in defence spending will be funded by reducing Overseas Development Assistance (ODA) from 0.5% to 0.3% of GNI [gross national income] and reinvesting it into defence. This move, according to UK Prime Minister Keir Starmer, will fully fund the increase in defence spending.
“That means spending £13.4bn more on defence every year from 2027,” Starmer told the House of Commons on 25 February.
However, this appears to be a projection as it cannot be determined with certainty what the UK’s GDP will be in 2027, and, as a result, what the 2.5% will provide. The UK’s GDP in Q1 2025 is around £2.56tn ($3.24tn), depending on the source, providing an estimated defence spend at the current 2.3% of £58.88bn. Should the UK economy not grow at all by April 2025, then 2.5% would be reflected by a £64bn UK defence budget. According to data provided by the Office of National Statistics this month, the UK’s real GDP was estimated to have increased by 0.1% in Q4 2024, following unrevised no growth in the previous quarter. The real GDP per head was estimated to have fallen by 0.1% in Q4 2024. With a stagnating UK economy in 2025 and inflation rising once again – raising the spectre of a period of stagflation – it is by no means guaranteed the country’s financial state will be able to provide “£13.4bn on defence every year from 2027”, claimed Starmer. A December 2024 briefing paper compiled for the UK Parliament states that in the 2023/2024 financial year, the UK spent £53.9bn on defence. According to the report, spending plans set out in the 2024 Autumn Budget showed that defence spending was expected to total £56.9bn in 2024/2025, increasing to £59.8bn in 2025/2026. This was equivalent to an annual average real-terms growth rate of 2.3% between 2023/2024 and 2025/2026. However, real terms defence spending fell by 22% between 2009/2010 and 2016/2017 (from £57.1bn to £44.6bn in 2023/2024 prices), before starting to increase again to nearer its 2010 levels. Regarding the 2.5% move by 2027 and an ambition to spend 3% of GDP on defence “within the next parliament”, MPs gathered in the Commons on 25 February appeared to think this timeline was not moving fast enough.
“It is a start not a finish, I think we will have to be raising defence spending further,” said Conservative MP Iain Duncan Smith.
Labour MP Derek Twigg echoed the sentiment, stating that it was likely “we have to revisit the 3% target” before the next parliament, post-2029.
Despite the term ‘defence spending’, not all the funding goes on military acquisitions, maintenance, or operations. Nato’s own regulations allow for the inclusion of ancillary defence costs to be included, a route used by its members to enable them to claim a larger figure.
In example, German defence spending was estimated by Nato to be around 2.2% of its GDP in 2024, a figure that is widely understood to not be entirely reflective of reality as it includes a proportion of a wider pan-departmental ‘special fund’ for national programmes. Germany’s actual defence budget is thought to be around 1.4% of GDP. For its part, the UK moved to include war pensions (then £820m), contributions to UN peacekeeping missions (then £400m), pensions for retired civilian MoD personnel (then £200m), and a large portion of MoD income (then around £1.bn), into the official defence budget in 2014, the December 2024 UK parliamentary paper stated. These figures have since increased. According to a paper from the UK House of Lords in December 2024, the UK was the fifth-highest provider (behind the US, China, Japan and Germany) of assessed contributions to the UN peacekeeping budget (contributing 5.36% of the total) between 1 January 2022 and 31 December 2024. Following on from this move, it was determined in 2023 that all military nuclear-related programmes and expenditure, including in-service running costs of the Trident nuclear deterrent, to be ringfenced within the MoD’s budget. This creative use of accounting, permitted by Nato, enables the UK to claim a 2.3% spend on defence matters, with perhaps a distinction between ‘defence’ and ‘military’ required. The waters look set to muddy further as Starmer has determined to “update” the definition of defence spending to “recognise what our security and intelligence agencies do to boost our security, as well as our military”, according to a UK Government release on 25 February.
“This change means that the UK will now spend 2.6% of GDP on defence in 2027,” the government said.
This apparently will see the inclusion of the Single Intelligence Account (SIA) – the combined budget of the domestic Security Service/MI5, the overseas Secret Intelligence Service/MI6, and cybersecurity centre GCHQ – into the ‘defence budget’.
According to the UK Government, the 2022/23 spending on the SIA was reported to be £3.6bn. In addition, between 2023-2024 and 2025-2026, the government has committed to increasing SIA spending by around £340m.
Clearly, given the remit of agencies such as MI5, MI6, and GCHQ, their activities are not necessarily defence related.
Did US commentary influence UK move?
The timing of the UK announcement comes two days before Starmer will head to Washington to make his case for Europe to a US administration that appears to have washed its hands with the continent. However, when quizzed as to whether US statements at the recent Munich Security Conference and Ukraine Defense Contact Group on the paucity of European defence spending had had an impact on UK defence planning, UK Defence Secretary John Healey responded simply: “No,” during a media briefing at the Institute for Government briefing on 18 February.
This did not appear to tally with a response by Starmer in the Commons.
“We have known, I think, for three years, this was going to come and what has happened in the last three weeks has accelerated that and made it the more urgent,” Starmer said, responding to a question in the House. (Source: army-technology.com)
25 Feb 25. UK’s Reeves: ‘All of us must step up’ defence spending. British Finance Minister Rachel Reeves said on Tuesday that other European nations must follow in her country’s footsteps and increase their defence spending. Prime Minister Keir Starmer announced earlier he would increase annual defence spending to 2.5% of GDP by 2027 and target a 3% level last seen just after the Cold War, a signal to U.S. President Donald Trump that Britain can boost Europe’s security.
“This is a generational moment for our continent,” Reeves wrote in the Telegraph newspaper. “All of us must step up and do more on defence.”
Reeves said she would speak to her European counterparts over the coming days at a G20 meeting in South Africa about the “importance of security and defence for our economies, and how we can work together to bolster them”. The increase would see Britain spending 13.4 bn pounds ($17 bn) a year more on defence in 2027 than it does now, Starmer said, adding the extra money would help rebuild the country’s industrial base, create jobs and boost growth. (Source: Reuters)
26 Feb 26. Norway and Denmark eye increased defence cooperation. Norway and Denmark plan to increase their cooperation on defence, the two Nordic NATO members said on Tuesday in a joint statement. They said the move would be within the framework of Nordic cooperation and the NATO framework, and their aim is to present concrete proposals in May.
“Amongst the areas to be covered would be investigating opportunities for stronger industrial ties to support our own defence sectors and our continued commitment to Ukraine,” they said. (Source: Reuters)
24 Feb 25. EU and UK in talks about Europe-wide defence funding amid fear of US pullback. Britain will this week join EU leaders in groundbreaking talks about setting up Europe-wide defence funding arrangements. (Source: FT.com)
24 Feb 25. France offers nuclear shield to Europe. Jet fighters armed with nuclear weapons could be posted to Germany as Emmanuel Macron discusses Ukraine’s defence with Donald Trump. France is ready to use its nuclear deterrent to help protect Europe, The Telegraph understands. Fighter jets carrying nuclear weapons could be deployed to Germany as the US threatens to withdraw its forces from the Continent. Friedrich Merz, expected to be the next German chancellor after winning his country’s elections on Sunday, has called on Britain and France to extend their nuclear protection as he seeks “independence” for Europe from Donald Trump’s America. A French official told The Telegraph that deploying fighter jets would send a message to Vladimir Putin, while diplomats in Berlin suggested it would pressure Sir Keir Starmer to do the same.
“Posting a few French nuclear jet fighters in Germany should not be difficult and would send a strong message,” the source said.
Emmanuel Macron, the French president, spoke with Mr Merz on Sunday night before travelling to the White House to present his plan for European security and the defence of Ukraine to Mr Trump. At the White House summit, held on the third anniversary of the war, the US president suggested his country would not provide security guarantees to Ukraine after a peace deal was signed. Speaking alongside Mr Trump at the podium, Mr Macron said peace “must not be a surrender of Ukraine” as he also called on Europeans to do more to protect the Continent. Meanwhile, the US clashed with its allies over a UN resolution on the Ukraine war. Washington voted with Russia against a motion that condemned Putin’s war and called for his forces to be withdrawn. The United States has long guaranteed Europe’s safety with an arsenal of around 100 nuclear missiles, many of them stationed in a US military base in Germany. France’s nuclear deterrent is currently independent from Nato, while Britain’s forms a key part of the alliance’s defence strategy. Mr Merz said last Friday that Paris and London should discuss “whether their nuclear protection could also be extended to us” before warning on Sunday that the US under Mr Trump was now “indifferent to the fate of Europe”. (Source: Daily Telegraph)
25 Feb 25. Europe must raise defence spending, use Russian assets for Ukraine, Czech PM says. Europe should use money from frozen Russian assets for further military support of Ukraine and relax its fiscal rules to boost defence spending, Czech Prime Minister Petr Fiala said on Monday. Czech defence spending must grow to 3% of gross domestic product in several years from around 2% in 2024, to reflect the new geopolitical reality, Fiala said in an address to the nation.
“President (Donald) Trump has decided to completely transform U.S. foreign policy. The speed, thrust and rhetoric are certainly surprising, but the shift of the United States away from focusing on Europe should not surprise us,” Fiala said in the speech shown live on television.
“Our fundamental aim now must be a strong Europe. A Europe which can deter Russia from further military attacks on sovereign European states.”
Fiala said Europe should relax its fiscal rules to fund defence and also use 93bn euros ($97.42bn) from its post-coronavirus recovery funds for defence and related infrastructure.
“For further military support of Ukraine, we must use money from frozen Russian assets from across the entire Europe,” he said.
The crisis was making the European Union an even more important alliance than it had been in the past 20 years, Fiala said. But to succeed and boost competitiveness, the EU needs to deregulate and revise its Green Deal decarbonisation policies. (Source: Reuters)
24 Feb 25. Italy’s Meloni bags UAE investment pledge worth $40bn.
- Summary
- Companies
- Italy’s Meloni welcomes UAE president on visit to Rome
- Rome wants stronger ties with Gulf countries
- Deals involve Eni, Intesa Sanpaolo and Leonardo
The United Arab Emirates plans to invest $40bn in Italy, the two countries said at a bilateral summit in Rome, without providing any time frame. Italian Prime Minister Giorgia Meloni has pursued stronger ties with Gulf countries since taking office in 2022, ignoring concerns over human rights issues raised by political opponents. Under her watch, Italy lifted arms sales embargoes for the UAE and Saudi Arabia imposed by previous governments due to the war in Yemen. On Monday, Meloni welcomed UAE President Sheikh Mohammed bin Zayed Al Nahya on a state visit to Rome, and the pair pledged to work towards a “Comprehensive Strategic Partnership”. As part of this partnership, the UAE committed to invest $40 bn in Italy across key sectors, the two governments said in a joint statement, which also announced the signing of “more than 40 new agreements”. The deals involved major Italian companies such as energy group Eni (ENI.MI), opens new tab, lender Intesa Sanpaolo , telecoms operator Telecom Italia , arms maker Leonardand shipbuilder Fincantieri. (Source: Reuters)
22 Feb 25. Norway in talks to buy British helicopters to combat Russian subs. Oslo considering purchase as it grapples with Moscow’s increasingly assertive navy. Norway has discussed acquiring a fleet of British-made helicopters as the Scandinavian country seeks to bolster its defences against Russian submarines. Oslo has held talks in recent months with the UK Ministry of Defence and manufacturer Leonardo about a potential deal to acquire several AW101 aircraft, The Telegraph understands. The helicopters, a later version of the Merlins used by the Royal Navy, are considered to be among the best submarine-hunters in the world and are made at Leonardo’s factory in Yeovil, Somerset. Norwegian interest in them has emerged as the country’s officials are weighing up whether to buy as many as six British-made Type 26 frigates from BAE Systems, which would also be used as sub-hunters. Leonardo confirmed the talks and revealed that the AW101s were being presented alongside the Type 26s as a “package” with BAE, in a joint “team UK” bid. They would be used to patrol the Norwegian and Barents seas, where Oslo is grappling with an increasingly assertive Russian navy. Each Type 26 can accommodate one AW101 but it is understood that more than one helicopter would be needed per ship to ensure some are always available. (Source: Daily Telegraph)
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