NATO's Eastern Flank and the GLOBSEC Report 2026: The Hidden Weaknesses of the European Security Architecture

From buffer zone to front line: What the arms buildup in the East means for our domestic economy

The war in Ukraine has shaken the foundations of European security architecture and transformed NATO's eastern flank from a mere buffer zone into an existential front line. As a result, historic sums of money are flowing into the defense budgets of European states. But is that enough? The latest "Annual Battle Readiness Report on the Eastern Flank 2026" from the renowned think tank GLOBSEC provides an answer that is as surprising as it is sobering: money alone does not buy security. While budgets are growing, there is often a lack of basic operational readiness, military mobility, and robust industrial capacity. For Europe's defense capabilities, this means a necessary paradigm shift – away from mere spending targets and toward measurable operational capability. At the same time, this historic transformation opens up enormous economic opportunities, especially for European SMEs, which are in greater demand than ever before as the backbone of the new security industry. The following analysis highlights the key findings of the GLOBSEC report and shows in detail why the future of our security is decided not only in political capitals, but also, and crucially, in the factory floors of industry.

Europe between rearmament and structural fragility — why spending money is not the same as being prepared for defense

To understand the significance of this report, one must understand who authored it. GLOBSEC is an independent, non-partisan, and non-governmental organization founded in Bratislava in 2005, which has become one of Europe's most influential security think tanks. With offices in Prague, Brussels, Bratislava, Kyiv, Vienna, and Washington, D.C., as well as a permanent presence in Poland and the Balkans, GLOBSEC sees itself as an action-oriented policy institute. Regular participants at its annual conference include heads of state, foreign and defense ministers, NATO secretaries general, CEOs of European defense companies, and leading figures from academia and civil society.

GLOBSEC's unique strength lies in its geographical DNA. As an organization with roots in Central Europe, emerging from the tradition of the Slovak Atlantic Commission of 1993, GLOBSEC combines Western Atlanticist categories of thought with the experiential horizons of those countries geographically situated between NATO and Russia. This lends its analyses a credibility and precision that purely Western European or North American think tanks cannot structurally achieve. For European SMEs, for companies offering industrial solutions in the B2B sector, for logistics service providers and intralogistics specialists, GLOBSEC is therefore not an abstract political institution—but a reliable source of business-relevant security analyses that directly impact economic planning horizons and supply chain security.

The “Annual Battle Readiness Report on the Eastern Flank 2026” analyzed here is the flagship product of the GLOBSEC Future Security and Defence Council (FSDC), a high-level transatlantic platform that brings together policymakers, industry leaders, and defense experts. The report covers ten countries: Finland, Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary, Romania, and Bulgaria—thus encompassing the entire geopolitical front line from the Baltic Sea to the Black Sea.

The geopolitical accelerant: How the Ukraine war has redefined the European security architecture

Russia's complete invasion of Ukraine in February 2022 was not only a violation of international law—it was a geopolitical accelerant that, in a matter of months, shattered strategic certainties that had lasted for decades. What until 2022 had been considered a geographical buffer zone between the Atlantic West and Russian influence became overnight the front line of an existential conflict over the European security order.

The analytical starting point of the report is therefore as follows: The ten countries on NATO's eastern flank are no longer recipients of collective security guarantees, but rather active producers of the deterrence credibility upon which the entire Atlantic Alliance depends. For these countries, deterrence is no longer an abstract collective concept, but a concrete national responsibility exercised under conditions of geographical vulnerability, compressed warning times, and sustained hybrid pressure. This altered logic of responsibility has immediate economic consequences: Security spending, industrial policy, and infrastructure investments along the eastern flank are no longer a matter of national budgetary considerations—they are the very materials from which European overall security is built.

The regional framework was structurally strengthened by the NATO summits in Vilnius in 2023 and Washington in 2024. The new regional defense plans adopted there define, for the first time, concrete roles, force requirements, and timelines that presuppose rapid mobilization, cross-border troop movements, and sustained operations. This transformed a political declaration of intent into an operational standard—and a budget target into a readiness measure. The GLOBSEC report provides the first publicly available and systematically comparable answer to the question of how well the ten frontline states actually meet this standard.

The illusion of the budget indicator: What defense spending measures — and what it doesn't

The report's most important and simultaneously most uncomfortable finding can be summarized in one sentence: Higher defense budgets do not automatically translate into greater combat readiness. This statement has far-reaching consequences for pan-European security policy, extending well beyond military-strategic debates.

Poland leads NATO in defense spending: 4.12 percent of its gross domestic product in 2024, with a projected 4.7 percent for 2025—equivalent to nearly US$45 billion per year. Estonia spent 3.43 percent and Latvia 3.15 percent of their GDP on defense. These figures significantly exceed the NATO target of two percent and signal political will. However, the report shows that in many of these countries, personnel and system maintenance costs consume the vast majority of budgets, crowding out investment in the truly critical capabilities: logistics infrastructure, ammunition reserves, maintenance capacities, and medical support systems.

The result is a structural gap between proclaimed readiness and operational reality. Countries investing significant sums in new platforms are finding that the pace of platform acquisition is outpacing the availability of qualified personnel, maintenance infrastructure, and air defense coverage. A modern main battle tank lacking spare parts or trained crews is a strategic misinvestment. This insight is revolutionary for European defense planners—it necessitates a paradigm shift away from input metrics (what percentage of GDP?) to output metrics (how quickly can it be mobilized?).

To this end, the report introduces a new analytical framework: in addition to absolute expenditure volumes, operational readiness, mobilization speed, and endurance should be considered primary benchmarks. This approach shifts the focus from procurement balance sheets to the actual industrial and institutional backbone of defense—thus bringing issues of supply chain stability, production capacity, and industrial mobilization to the forefront.

Military strength along the front line: A sober assessment

The figures for the armed forces structure along NATO's eastern flank are impressive—and simultaneously sobering in relation to the opposing threat. Poland dominates the region with approximately 164,100 active soldiers, 37,500 reservists, and 14,300 paramilitary forces—a total of nearly 215,900 personnel. Romania provides the second-largest contingent with around 181,900 personnel, including 57,000 gendarmes and paramilitaries. The Baltic states, on the other hand, demonstrate remarkable efficiency in force generation relative to their population size: Estonia has a total of approximately 48,300 personnel, Lithuania 47,450, and Latvia 22,600.

In total, the ten eastern flank states possess approximately 1,498 main battle tanks and 315 combat aircraft, supported by roughly 489,000 active-duty soldiers and 431,000 reservists. Compared to Russia's reported troop strength—1,500,000 soldiers according to Decree 2024—this remains quantitatively inferior, particularly in terms of combat aircraft. However, the real debate revolves not around numerical parity, but rather integration capability and speed of response.

Poland is the dominant force in terms of heavy weapons systems: 662 main battle tanks, 1,525 infantry fighting vehicles, 451 self-propelled artillery systems, and 199 multiple rocket launchers. The acquisition of HIMARS systems and Apache attack helicopters firmly integrates Poland into the long-range weapons systems of the United States. Romania was the first European country to receive HIMARS systems, while Estonia and Lithuania have received or will receive their own HIMARS deliveries with ranges exceeding 400 kilometers. This regional integration within US-led system architectures—the so-called European HIMARS Initiative under the leadership of the US V Corps—creates a transatlantic operational logic that extends far beyond purely national capabilities.

Nevertheless, critical gaps remain. The Baltic states, in particular, have hardly any fighter jets of their own and are heavily reliant on allied air support. Temporary Patriot and NASAMS deployments have partially filled these gaps, but are not permanent solutions. Integrated air and missile defense remains the most unevenly developed capability area in the entire region.

NATO's forward presence as a strategic paradigm shift

Perhaps the most consequential structural change of the last four years is the transformation of NATO's forward presence from symbolic security to operational deterrence. What began in 2016 with the Enhanced Forward Presence in four battalion battle groups of approximately 1,000 soldiers each in Estonia, Latvia, Lithuania, and Poland has evolved into a regionally rooted brigade framework.

Germany sent the clearest signal: In May 2025, Berlin confirmed the permanent assignment of the 45th Armored Brigade to Lithuania, which is slated to grow to 5,000 personnel by 2027—a transition from rotating to permanently stationed, nationally commanded forces. Canada is expanding its brigade in Latvia to approximately 2,600 troops, equipped with Leopard 2 main battle tanks, Spike anti-tank missiles, and medium-range radar. The US maintains the first permanent American garrison in NATO's eastern region with over 10,000 troops in Poland, while the US Army V Corps coordinates around 30,000 troops across nine countries from its headquarters at Fort Knox.

This transformation has a direct economic dimension. Permanent troop deployments require infrastructure investments on the scale of decades: barracks construction, logistics centers, warehousing, maintenance facilities, and transport links. These investments create regional demand structures for local suppliers, construction companies, IT service providers, and logistics providers. In short, they represent an economic stimulus program for local economies—provided these economies have the capacity to meet this demand.

The critical weakness: Military mobility as an unresolved infrastructure problem

Nowhere does military necessity intersect with economic reality as directly as in the area of ​​military mobility. The report identifies infrastructure and legal bureaucracy as the most persistent weakness on NATO's eastern flank—and thus a significant economic investment gap.

Germany plays a key geopolitical role: as a hub for troop movements from Western European and North American ports to its eastern flank, it boasts approximately 13,000 kilometers of highways and 38,400 kilometers of railway lines. However, infrastructure decay, bureaucratic hurdles, capacity bottlenecks, and vulnerability to physical and cyber attacks systematically jeopardize this function. Analysts recommend a special fund of at least 30 billion euros, operating outside the debt brake, to upgrade priority military corridors.

Between 2021 and 2027, the European Union invested a total of approximately €1.7 billion in 95 military mobility projects through the Connecting Europe Facility. Poland alone received around €450 million, including €294 million for the Rail Baltica project. Coordinated corridor initiatives are emerging rapidly: In January 2024, the Netherlands, Germany, and Poland signed a memorandum of understanding to develop a military corridor from North Sea ports to the eastern flank. In November 2024, this corridor was extended to include Lithuania, Belgium, Luxembourg, the Czech Republic, and Slovakia, creating a contiguous zone from the North Sea to the Baltic region. Greece, Bulgaria, and Romania established a southern corridor in July 2024, while the Nordic countries agreed on their own Scandinavian mobility zone.

Despite these initiatives, significant obstacles remain: not all bridges and tunnels meet military load classes, approval procedures for cross-border transport are not harmonized, and alternative transport routes are limited. The Secure Digital Military Mobility System (SDMMS) project, a digital initiative for secure information exchange, is funded by a €9 million grant from the European Defence Fund and aims to reduce bureaucratic delays. The overall picture is clear: military mobility is no longer a logistical side issue, but a core strategic factor—and an area of ​​investment that will require years of coordinated development.

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Institutional decision-making speed: The underestimated factor in war readiness

One of the most original analytical achievements of the GLOBSEC report is the development of the Decision-Making Timelines Index (DMTI)—a qualitative instrument for assessing how quickly national political and legal systems can authorize military action, alliance transit, and support for allies. The DMTI explicitly measures institutional speed, not political intentions or alliance loyalty.

The results are revealing. Finland serves as a benchmark: In a system based on total defense, crisis authorities are delegated in advance through preparatory legislation, parliamentary oversight occurs afterward, and decision-making is deeply rooted in civil society. The government can act within hours. Similar patterns exist in Estonia and Poland: clear legal triggers, robust interministerial coordination, and a strong tradition of political alliance solidarity.

At the other end of the spectrum are Hungary, Slovakia, and Bulgaria, each classified as red. In Hungary, political polarization and a strategic narrative emphasizing national autonomy significantly reduce predictability in a crisis. Slovakia suffers from coalition instability and constitutional approval requirements that structurally create longer response times. In Bulgaria, the authorization of allied troop deployments requires parliamentary approval—a process that can be particularly time-consuming under political instability or transitional governments.

These institutional differences are not mere academic details. In a crisis where hours can mean the difference between deterrence and escalation, a country with parliamentary approval requirements is structurally vulnerable—regardless of its political loyalty to the alliance. The report clearly demonstrates that institutional design, not political intentions, is the crucial variable.

Societal resilience as a military force multiplier

Security policy debates typically focus on weapons systems, budgets, and troop numbers. The GLOBSEC report expands this picture to include a dimension that is chronically underestimated in commercial risk analyses: the societal dimension of defense readiness.

Public trust in NATO and national armed forces directly impacts recruitment, retention, resource allocation, and mobilization capacity. Along the entire eastern flank, trust in the armed forces averages over 72 percent, making them the most trusted institutions in the region. In Poland, public support for increased defense spending rose to 76.6 percent following the 2022 Russian invasion. On average, 82 percent of the population in the region supports their countries' NATO membership.

Reserve systems are a particularly revealing example of the link between society and military capacity. Finland's universal conscription maintains a trained reserve pool of nearly 900,000 citizens—a scale extraordinary for a country of 5.5 million people. Estonia's Kaitseliit, the voluntary defense league, mobilizes over 15,000 reservists in regular training cycles. Lithuania reintroduced conscription in 2015 and operates a hybrid system that combines professional forces with conscripts and national volunteer associations. This societal integration of defense not only provides military depth—it fosters a political culture of preparedness that enables governments to act decisively under pressure.

Cyberspace as a permanent battlefield

The analysis of cyber preparedness reveals an alarming asymmetry between the intensity of the threat and the institutional capacity to meet it. NATO's eastern flank is subjected to the most constant and intense cyber pressure of all NATO regions—and nowhere does this pressure more systematically outpace institutional responsiveness than in countries with fragmented security structures.

In the first three quarters of 2025 alone, 170,000 cyber incidents were identified in Poland, a significant proportion of which were caused by Russian actors. The Czech cybersecurity agency NUKIB, in its 2024 annual report, classified attacks by Russian intelligence services as the most significant cyber threat to the country. State-sponsored attacks—including the use of destructive malware such as Industroyer 2, which targeted Ukrainian high-voltage substations—have reached a new level of precision and operational impact.

The scale of information operations is particularly worrying. Russian groups like Killnet have publicly claimed responsibility for DDoS attacks on the European Parliament. Chinese cyber espionage activities against government, military, and economic targets in NATO member states have been documented and were officially condemned at the 2024 NATO anniversary summit. The report recommends the full integration of cyber and electronic warfare capabilities into armed forces structures and exercises, the establishment of cyber reserves, improved public-private information sharing, and public education in digital security hygiene.

The arms industry as a strategic bottleneck: From security consumer to security producer

The most fascinating section of the report from an industrial economics perspective concerns defense production capacities. The key finding is that the eastern flank states are undergoing a structural transition from passive security consumers to active producers within the European defense industry ecosystem. However, this transition is characterized by significant bottlenecks stemming from fundamental economic patterns.

Ammunition is the critical bottleneck par excellence. The war in Ukraine has exposed a fundamental undercapacity in NATO ammunition production. The region's largest capital investments are therefore flowing into new or expanded ammunition factories—in Slovakia, Poland, Hungary, and Lithuania. Slovakia's ZVS Holding, a key player in the Czechoslovak Group conglomerate, is expanding its production capacity for 155mm artillery shells to a planned 360,000 units annually. Poland is investing over €560 million in new production lines for large-caliber ammunition.

National industrial strategies follow three recognizable models. Poland pursues a state-led approach: The state-owned conglomerate PGZ (Polska Grupa Zbrojeniowa), with over 50 subsidiaries, is the central instrument of a modernization strategy with a technology program volume of $131 billion. The Czech Republic relies on a private model: The Czechoslovak Group operates with a venture capital-based approach, acquiring companies and scaling production internationally. Hungary chooses the third path: greenfield development through joint ventures. The public-private partnership with Rheinmetall is creating a state-of-the-art factory for the Lynx KF41 infantry fighting vehicle in Zalaegerszeg, as well as a large facility in Várpalota for ammunition production. Hungary thereby "skips" the need to modernize outdated facilities—but in doing so, it incurs a considerable degree of industrial dependence on its German cooperation partner.

The overall picture of current industrial capacity: It is sufficient to supply Ukraine with materials, but insufficient to rapidly replenish national stockpiles. Bottlenecks arise from labor shortages, dependencies on raw materials (especially nitrocellulose for propellant charges), and long lead times for plant permits.

Economic repercussions: What the GLOBSEC report means for SMEs

The report's security policy findings have concrete, immediate relevance for German and European SMEs — and this relevance grows with each quarter in which defense budgets continue their structural upward shift.

According to McKinsey forecasts, Germany's defense budget is expected to more than double from its current level of around €80 billion to €170 billion by 2030. The European arms market could grow to €335 billion annually during the same period. While large corporations like Rheinmetall, KNDS, and Airbus Defence continue to dominate the volume, they subcontract up to 80 percent of orders to suppliers. Rheinmetall alone reports working with approximately 23,000 suppliers—primarily medium-sized companies.

Demand is structural, not cyclical. The German Federal Association of the Security and Defence Industry (BDSV) has almost doubled its membership since November 2024, from 243 to 440 – two-thirds of which are medium-sized companies. The pressure is coming from mechanical engineering, the automotive supply industry, and electronics manufacturing: companies that, faced with structurally declining capacity utilization in traditional sectors, are seeking new business areas and are discovering the defence industry as a growth prospect.

Mechanical components, coatings, assembly capacity, and qualified specialists are in particularly high demand. The parallels between drive and control technology for automotive applications and defense systems create natural entry points for companies in the automotive supply industry. In Baden-Württemberg—Ulm's direct economic home region—the Ministry of Economic Affairs explicitly anticipates job growth in the security and defense industry. The approximately 14,500 people already employed in the sector there are an indicator of existing cluster structures that medium-sized suppliers can connect to.

At the same time, the barriers to entry are real. Certification procedures, security checks, high upfront investments, and long project durations pose significant obstacles for many SMEs. Added to this are ESG-related financing problems: Due to the classification of the defense sector as "not sustainable" under the EU taxonomy, SMEs wishing to act as suppliers may face difficulties accessing banks and obtaining credit. The EU is in the process of revising these taxonomy regulations, but the process is not yet complete.

Air and missile defense: The structural deficit with industrial growth potential

According to the report, integrated air and missile defense (IAMD) is the most unevenly developed capability area on NATO's entire eastern flank. Temporary deployments of Patriot systems (Germany in Lithuania) and NASAMS (Spain in Latvia since June 2022) have partially closed protection gaps, but are structurally provisional. The Baltic states have hardly any fighter jets of their own and are permanently dependent on allied airspace surveillance.

The solution outlined in the report is technically sophisticated and requires significant industrial capital: regional, interoperable IAMD architectures that integrate sensors, interceptor missiles, and command and control systems across borders. Joint procurement and standardized training are intended to reduce costs and improve readiness. Poland's investment of over €700 million in the Narew short-range air defense system illustrates the scale of these investments. This opens up considerable market opportunities in the medium and long term for companies in the fields of sensor technology, electronics, radar systems, communications technology, and software development.

The paradox of incomplete readiness: When progress and fragility coexist

The GLOBSEC report does not end with a triumphant assessment. Its final evaluation is nuanced and remarkably honest: significant progress has been made—but readiness remains uneven and, in some cases, fragile.

The gap between declaratory and operational deterrence is the central risk. Countries with smoothly functioning mobilization systems, pre-delegated crisis authorities, robust reserve systems, and a deep-rooted societal commitment to defense—Finland, Estonia, Poland—are actually capable of acting in a crisis. Countries whose political systems require parliamentary approval, whose industrial base is fragile, and whose societies are characterized by a lack of trust in defense institutions remain structurally vulnerable—regardless of the figures in their defense budgets.

Collective defense is only as credible as its weakest supporting role among the participating states. This is not a rhetorical statement, but an operational truth: An alliance in which individual members take days or weeks to authorize troop transit through their territory is, as a whole, slower than its fastest member.

What Europe must decide now

The policy recommendations of the GLOBSEC report fit into a clear strategic picture. First, readiness must be measured by output rather than input metrics. Operational readiness, mobilization speed, and sustainability must replace GDP percentages as primary benchmarks. Second, industrial readiness must be treated as a strategic capability, not an economic sector. National production readiness plans with predictable demand and energy security are prerequisites for armed forces that can sustain operations in a prolonged conflict. Third, coordinated multinational procurement—particularly for munitions, air defense interceptor missiles, and spare parts—must replace fragmented national procurement patterns.

For European SMEs, this transformation process means that demand is real, structural, and long-term. The opportunity to become part of resilient European defense supply chains is greater than ever before. However, entry requires strategic planning, regulatory preparation, and a clear position within the supply chain hierarchy. Those who fail to make this investment now risk being left out of one of the most stable growth markets of the next decade.

Deterrence is not created in Brussels. It is created in national capitals—and its strength depends on how consistently these capitals translate political will into operational capabilities. The same applies to European companies: security resilience does not begin in procurement agencies, but in the factory floors, R&D departments, and logistics centers of small and medium-sized enterprises (SMEs).

Markus Becker

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Chairman SME Connect Defense Working Group

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Konrad Wolfenstein

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