The western european armies all massively downsized. The West-German Bundeswehr had around 500K soldiers and almost 3000 tanks until the end of the cold war. Currently, the - notably united - German Bundeswehr employs around 180k soldiers and owns a measly 225 tanks.

Yeah, during the 1990s, it finally became acceptable for NATO countries to cut military spending, and they did. NATO expanded by accepting a lot of former Warsaw Pact countries that wanted to join, and there was even talk of Russia joining at some point (then Putin came to power and he only wanted to join if he got special treatment). Despite its growth, NATO had become increasingly irrelevant until the invasion of Ukraine.

The only reason NATO has remained and still is relevant, is because Russia remained aggressive, so there remained a demand for security from Russian neighbours. But if you look at military spending, former Warsaw Pact members spend a much larger percentage of their GDP than western European countries, which, up to Russia's invasion, still believed in peace with Russia.

It did work, the military shrinked massively in every country and kept just enough defense to deter Russia from attacking.