The Rearmament Boom Nobody Is Auditing

Europe is rearming at a pace not seen since the Cold War. At the June 2025 NATO summit in The Hague, member states committed to spending five percent of GDP on defense by 2035, a target that would push collective annual expenditure well beyond $1 trillion. For Central and Eastern Europe (CEE) and South-Eastern Europe (SEE), this represents a historic influx of capital into defense ministries, procurement agencies, and national defense industries. Poland alone has already pushed its defense budget to 4.2 percent of GDP.

But capital without accountability is not security. It is opportunity. And in much of the CEE/SEE region, the institutional infrastructure to manage that opportunity responsibly is dangerously thin.

The question is no longer whether corruption in regional defense procurement exists. The data on that is unambiguous. The question is whether the political will exists to confront it before the rearmament surge makes the problem structurally irreversible.

What the Data Actually Shows

Transparency International's Government Defence Integrity Index (GDI) assigns the CEE region an average score of 48 out of 100, a threshold the index classifies as high corruption risk. Montenegro sits at 32, placing it in the "very high risk" category.

The situation is no better when measured by public perceptions. The 2025 Corruption Perceptions Index shows that across the Western Balkans, opacity in high-value investment decisions and bilateral government agreements is a systemic pattern. Serbia ranked 116th globally with a CPI score of 33, the worst-performing country in the region. Croatia scored 47 (63rd globally) and Montenegro 46 (65th), with both continuing to face governance challenges that have yet to strengthen key institutions. Bosnia and Herzegovina came in at 109th place.

These are not abstract rankings. They map almost exactly onto the countries currently receiving the largest per-capita increases in NATO-aligned defense spending.

The Structural Vulnerabilities

Corruption in defense procurement does not typically look like a suitcase of cash. In mature economies, it operates through structural mechanisms, and CEE and SEE governments have been slow to close them.

Secret procurement remains the single most corrosive instrument. In Georgia, classified procurement accounted for 51 percent of all procedures between 2015 and 2017. In Ukraine, that figure reached 45 percent. In Poland, a NATO frontline state and one of Europe's largest military spenders, secret procurement reached as high as 70 percent. In Lithuania, open competitive tendering accounted for as little as 0.5 percent of procedures. When contracts cannot be scrutinized, they cannot be challenged.

Weak parliamentary oversight compounds the problem. Across the region, defense committees frequently lack the technical capacity, independent legal counsel, or security clearance frameworks to meaningfully evaluate procurement decisions. Budget line items pass through parliaments as aggregated figures, with individual contract awards shielded behind national security classifications of debatable necessity.

The revolving door, the movement of officials between ministry roles and defense industry positions, is structurally unregulated in most SEE jurisdictions. Transparency International UK has explicitly flagged direct contract awards, restricted audits, and this revolving door as systemic risks that continue to threaten NATO's rearmament ambitions. In a region where personal networks often carry more weight than institutional rules, this vector is particularly acute.

The scale of exposure is significant. The NATO Support and Procurement Agency (NSPA) in Luxembourg, which projected handling 9.5 billion euros in contracts in 2025, became the center of a major corruption and collusion investigation involving Eurojust and multiple European member states. If these vulnerabilities exist inside NATO's own procurement architecture, they are orders of magnitude more pronounced in the national agencies of smaller regional states.

The SEE Dimension: Institutional Fragility at Scale

In South-Eastern Europe, the challenge is compounded by weaker baseline institutions and deeper entanglement between political elites and defense-adjacent business structures.

Across the Western Balkans, suspended transparency rules and unchecked discretionary powers are putting public funds at risk while eroding public trust. In Bosnia and Herzegovina, lack of competitive procedures has led to uncontrolled exploitation of public resources, with EU enlargement conditions providing only partial leverage on accountability reforms.

Kosovo adopted its EU reform agenda in 2024 but saw no meaningful progress in the anti-corruption area. Bosnia and Herzegovina was the last country in the region to adopt its reform agenda, doing so only in the final quarter of 2025. Defense governance reform, in both cases, remains secondary to political survival calculus.

The concern is not merely domestic. Recent research on EU defense procurement has confirmed that more transparent military contracting consistently produces lower corruption levels, and that a defense spending boom without accountability safeguards creates fresh vulnerabilities that hostile state and non-state actors can exploit. For a region on NATO's southeastern flank, that is a strategic liability, not just a governance failure.

What Has Worked and What Can Be Replicated

Identifying the problem is useful. Proposing solutions is what the region's defense establishments actually need.

Open contracting frameworks represent the most evidence-backed intervention available. Countries that have introduced structured disclosure requirements for defense contracts, even partial ones, show measurably lower corruption risk indicators in TI's datasets. The model does not require full transparency on classified systems. It requires standardized disclosure on vendor identity, contract value, competitive process, and award rationale for non-sensitive procurement categories.

Independent parliamentary budget offices with dedicated defense competencies have proven effective in Baltic states, which consistently rank as the least corrupt defense environments in the CEE region. Estonia and Latvia have institutionalized technical capacity to evaluate procurement independently of the executive. That model is transferable.

Civil society integration into oversight mechanisms is increasingly recognized as structurally necessary. Ukraine's Public Anti-Corruption Council, established under the Ministry of Defense in 2023 and expanded through 2024 and 2025, offers an instructive template: an independently constituted body with formal standing to review procurement decisions, submit public warnings, and engage with NATO and G7 experts on reform legislation. The council successfully opposed a 2025 draft law that would have created risks of manual control over defense procurement, an outcome that would not have been possible without institutionalized civil society access.

NATO's Building Integrity program provides a structured conduit for reform that regional governments have yet to utilize at full capacity. The program's frameworks on procurement governance, audit rights, and whistleblower protection are directly applicable to the vulnerabilities documented across CEE and SEE. Participation should be a baseline expectation for alliance members and accession candidates, not an optional add-on.

Whistleblower protection legislation with genuine enforcement mechanisms remains absent or inadequate in most of the region. Without protected disclosure channels, internal awareness of procurement irregularities produces career risk rather than accountability. This is a relatively low-cost legislative fix with disproportionate protective value.

The Window Is Closing

The rearmament cycle now underway will define the structure of regional defense industries and procurement networks for a generation. Contracts awarded in the 2025-2030 window will lock in supplier relationships, industrial partnerships, and institutional norms that are very difficult to undo.

History shows that rapid military spending increases without accountability mechanisms breed corruption and can weaken long-term security. The CEE and SEE region has a narrow window to build the oversight architecture before the volume of spending overwhelms the institutions designed to manage it.

The alternative is not just wasted money. It is defense establishments structurally compromised by the same spending surge intended to make them stronger.

Adria Defense will continue to track procurement transparency and defense governance across the CEE/SEE region. This analysis is based exclusively on published indices, institutional reports, and publicly documented investigations. No individual companies or persons are identified in connection with specific allegations.