Jean-Claude Juncker has called for the EU to collaborate more on defense projects.
Despite a lagging economy, Moscow has boosted defense spending to come in just behind the U.S. and China.
Jens Stoltenberg announced 3.8 percent of spike in real terms across Europe and Canada.
The defense committee recommends raising spending in the face of new political challenges.
U.S. and Western European spending is on the slide as Eastern Europe rearms.
President Hollande announced that the budget would rise by €3.8bn over four years.
Netherlands increases spending for first time in decade after MH17 and Russian ties worsen
Britain cut defence spending by 8% in past four years as US urges UK to meet NATO target
Poland is to boost defence spending to the highest level since the Cold War over fears of Russian aggression.