Since 2001, Europe finds itself increasingly involved in international military operations. NATO responded to the attacks of 9/11 by invoking, for the first time in its history, Article 5 of the Washington Treaty "the alliance's collective defense clause" and European military assets were deployed to the United States, the Mediterranean Sea, and Afghanistan. Deployable rapid response forces were created by NATO (the NATO Response Force) and by the European Union (the Battle Groups). The EU Security Strategy, formulated in 2003, lists combating terrorism, countering the spread of weapons of mass destruction, dealing with failed and failing states, and responding to regional emergencies as scenarios that may require military intervention. National governments also increased their commitments to international security and stabilization efforts. They have deployed military forces to operations in the Democratic Republic of Congo, East Timor, Darfur, and Chad, as well as contributed troops to UN peacekeeping operations worldwide. And at home and overseas, European militaries are stepping up efforts to prepare for and respond to natural disasters and humanitarian crises. In light of this upsurge in military preparations and deployments, it is important to track trends in European defense spending. Doing so can help answer many critical questions; for example, have defense budgets in Europe grown or declined, and by how much? How have European defense budgets fared given changes in national economies? How much are European governments spending on defense procurement and research and development (R & D)? Ultimately, if government spending is an indicator of the priority given to policy areas, understanding trends in defense spending can shed light on whether Europe is indeed serious about improving its military capabilities. This report seeks to provide the data and analysis needed to answer these questions. It presents the defense spending trends of all European countries,