Estonian Minister of Defense: Military procurement prices increase by 50%, European defense industry caught in a vicious cycle.

Estonian Minister of Defense Hanno Pevkur stated that as NATO allies increase their military spending, the prices of defense supplies in Europe continue to rise, with some categories seeing an increase of over 50% in the past two years. Speaking at the Lennart Meri Security Conference in Tallinn on Saturday, Pevkur said, "Prices are rising, and I frequently communicate with our national defense procurement officials about the situation." He added, "We have found that prices of similar defense supplies purchased two years ago have increased by 50% to 60% if we want to increase our order quantity." The significant rise in prices of weapons and military equipment is impeding Europe's rapid rearmament plans and posing challenges to NATO's military budget planning. With the shift of the U.S. strategic focus, Europe also needs to bear a significant portion of the expenses for delivering aid supplies to Ukraine to respond to the Russia-Ukraine conflict. Pevkur pointed out that there is currently a vicious cycle: there is a shortage of defense supplies in the market, but European defense companies are hesitant to increase investments and production capacity before formal procurement contracts are signed by government.