Portugal Fast-Tracks New Missile Shield with Record Defence Funds

Portugal’s government is quietly pushing its military modernisation pedal to the floor. By next year the country expects to cross the symbolic 2 %-of-GDP mark for defence spending, four years ahead of the calendar it once showed NATO partners. That accelerated timetable is being felt most visibly in the skies, where new anti-aircraft systems, deeper European cooperation and fresh bilateral accords are reshaping the way Portuguese decision-makers think about national security.

Why the radar is spinning faster

The war in Ukraine, unpredictable drone strikes on civilian targets across Europe and the spectre of hypersonic missiles have all underscored a hard truth: Portugal’s ageing air-defence architecture would struggle against 21st-century threats. While the country is geographically distant from Eastern Europe's front lines, it sits on NATO’s Atlantic flank and hosts critical infrastructure such as the under-sea cables that bring internet traffic to the Iberian Peninsula. Lisbon therefore seized on the alliance summit in Vilnius to pledge a steeper climb in defence investment, promising to reach 2 % of GDP in 2025 instead of 2029.

That decision translates into nearly €1.5 B in extra military outlays next year, according to NATO estimates, lifting the total defence budget to about €5.9 B. Officials argue the spending surge is not merely about buying kit; it is about securing Portugal’s freedom of action in an era when access to the Atlantic, space assets and digital infrastructure can no longer be taken for granted.

The shopping list: from drones to missiles

Instead of pouring money into a handful of premium, long-range batteries like the U.S.-made Patriot, Defence Minister Nuno Melo is spreading bets across low- and medium-altitude layers. The headline acquisition is the Thales ForceShield Compact VSHORAD package, chosen to replace the Chaparral launchers retired in 2021. Mounted on Spanish-built VAMTAC vehicles, the new RapidRanger turrets will fire STARStreak and Martlet missiles, giving ground troops a short-range umbrella against swarms of drones, attack helicopters and cruise missiles skimming just above the tree-line.

For medium reach, Portugal has signed up to the European Sky Shield Initiative (ESSI), a German-led consortium negotiating bulk purchases of systems such as the IRIS-T SLM. Lisbon has not yet put a brand name on its future mid-range pick, but senior officers confirm that specifications call for intercepting targets at roughly 40 km altitude and 80 km distance—well beyond the footprint of today’s Stinger units. That capability gap was highlighted during last year’s NATO Baltic Air Policing deployment, when Portuguese F-16s relied on Spanish NASAMS crews for overwatch during drills.

Lisbon’s long game: spending until 2034

The updated Military Programming Law (Lei de Programação Militar) dedicates €5.57 B in new procurement credits through 2034. Roughly €613 M are already earmarked in the 2025 state budget, much of it funnelled toward air-defence sensors, command-and-control software and the first delivery batches of missiles. A separate line item finances 12 A-29N Super Tucano aircraft for close-air-support and pilot training, a move designed to spare the F-16 fleet from low-intensity missions and extend its lifespan into the 2030s.

Parliament’s defence committee still wants clearer milestones, especially on manpower. Each ForceShield troop requires specialised radar operators, electronic-warfare technicians and logistics staff—roles the current force structure was never sized to fill. The Army is therefore planning joint training pipelines with the Air Force and the Polytechnic branch of the Military Academy in Amadora, hoping to produce the first fully certified air-defence battalion by 2027.

Europe’s sky shield and Iberian ties

Integration is the buzzword. Through ESSI, Portugal will plug its sensors into a Germany-centred network that also feeds Dutch, Latvian and Czech command posts. Real-time threat data should flow from Portuguese coastal radars to interceptors stationed as far away as Slovakia, and vice-versa. On the bilateral front, Lisbon deepened its long-standing US relationship at Lajes Field by joining the National Guard Bureau’s State Partnership Program in January. The scheme opens the door to joint exercises focused on counter-drone tactics and missile-defence simulations, many of which will be staged in the Alentejo skies.

Across the border, collaboration with Madrid extends beyond political rhetoric. Spanish NASAMS batteries will again deploy to Algarve ranges this winter for live-fire drills, giving Portuguese crews a first chance to practise integrated engagements under NATO rules. Defence analysts say such Iberian “plug-and-fight” trials are the surest way to convince sceptical lawmakers that new hardware will not gather dust in warehouses.

Counting the euros

Defence represented 1.58 % of Portugal’s GDP in 2024, or roughly €4.48 B. Crossing the 2 % threshold will require not only the extra €1.5 B slated for 2025 but also sustained growth thereafter, because NATO allies have tentatively endorsed a 5 %-of-GDP goal by 2035. Under that formula, about 3.5 % would pay for core military tasks and 1.5 % for dual-use projects, such as satellites that serve both civil and security purposes. The Ministry of Finance says annual increments will average 0.15 % of GDP, a glide path designed to shield social-spending envelopes from sudden cuts.

What it means for Portugal

For the defence industry, the air-defence splurge could be transformative. OGMA in Alverca and Tekever in Lisbon are positioning themselves as maintenance hubs for the new missiles, while Critical Software seeks contracts to develop encryption layers for the command network. Meanwhile, towns near Santa Margarida barracks anticipate construction booms as simulators and radar shelters go up.

For ordinary taxpayers, the calculus is more nuanced. Opinion polls show a majority backing NATO commitments but worrying about trade-offs with healthcare investment. Government strategists hope that visible, tech-savvy programmes—think counter-drone shields over energy facilities in Sines or satellite data protecting Atlantic fisheries—will persuade voters that the euros spent on air defence rebound back into civilian life.

Either way, by the time the first IRIS-T or equivalent missile lifts off from Portuguese soil, the country will have crossed a strategic Rubicon: moving from a modest air-watch posture to a layered, networked defence grid that ties Lisbon’s security as tightly to Tallinn and Washington as to its own airspace.