The 10% rise comes as European members of Nato have committed to massively ramp up spending under pressure from US President Donald Trump.

“Europe is spending record amounts on defence to keep our people safe, and we will not stop there,” EU foreign policy chief Kaja Kallas said.

The European Defence Agency (EDA) said that of the money being spent this year, close to €130 billion was being spent on investments such as new weaponry.

European countries have stepped up spending sharply since Russia invaded Ukraine in 2022.

“A €150-billion EU loan scheme intended to help countries ramp up defence spending has been fully subscribed,” the European Commission said last week, with 19 of 27 member states applying for funds.

The Security Action for Europe (SAFE) plan enables member states to get cheaper loans backed by the EU’s central budget.

Numerous Western militaries and intelligence services have warned that Moscow could be ready to attack a Nato country within three to five years if the war in Ukraine ends.

However, the return of Trump – who has long railed against the continent for underspending – to power this year has given Europe a fresh shove.

The mercurial US leader extracted a commitment from Nato allies to cough up 5% of their GDPs on security-related spending at a summit in July.

That headline figure breaks down as 3.5% on core defence spending and 1.5% on a looser range of areas such as infrastructure and cyber security.

“Meeting the new Nato target of 3.5% of GDP will require even more effort, spending a total of more than €630 billion a year,” EDA head Andre Denk said.