European defense spending has surged to a record 343 billion euros in 2024, driven by the war in Ukraine and the push by several EU and NATO countries toward the 2% of GDP target. This rearmament increasingly includes space-based capabilities such as earth observation, secure communications, navigation, intelligence and space surveillance.
In parallel, European space policy is entering a new cycle. The European Space Agency and its member states have approved a 22 billion euro envelope for 2026–2028, up from 17 billion euros for 2023–2025, including a 955 million euro security-space program over three years, a 30% increase on the initial request. Military space budgets worldwide have climbed from 33 billion dollars in 2018 to 73 billion dollars in 2024 and now exceed civil space budgets, in a global market expected to approach 1,800 billion dollars by 2035.
This shift opens a window for Europe’s New Space ecosystem, from micro-launchers and constellations to data analytics, SSA and cybersecurity. Yet the traditional European model, built around a few large primes and heavy institutional programs, remains slow and fragmented. Access to public procurement is complex, and two-thirds of European space revenues still depend on institutional demand. Without faster contracting, simpler procedures and wider access for SMEs and startups, Europe risks a gradual loss of competitiveness in a market dominated by US and Chinese players.