The defense budgets of the main European countries barely increased when Russia annexed the Crimean peninsula in 2014, but the large-scale invasion of Ukraine has skyrocketed military spending in the Union, which in 2022 reached a record figure of 58,000 million euros. The trend continues to rise, encouraged by the possible re-election of Donald Trump as president of the United States. For Brussels, the fragmentation of these investments is problematic.
“We do not have a Pentagon in Europe” that centralizes purchases, that is why “we have to coordinate the way in which the member states react”, defended yesterday the high representative of Foreign Policy of the EU, Josep Borrell, in the presentation of the new strategy for the defense industry, a plan that aims to break down taboos and promote, through incentives, integration in a sector where there are no community powers.
Brussels has put on the table, for the moment, an additional 1.5 billion euros to reinforce support programs for joint acquisitions of weapons and the manufacture of ammunition for the period 2025-2027 and has proposed significantly increasing this item in the next community budgets. . “It's not a lot of money, but the real funding for a stronger defense sector comes from member states, and that funding is going to increase in the coming years. What we can do from here is help ensure that these funds are spent better, that the money goes further and that it is spent in Europe. With a war on our borders, if not now, when?” said the vice president of the Community Executive, Margrethe Vestager.
“Our role is not to finance the purchase of weapons, but to help member states do it better and to do it together,” added the European Commissioner for Industry, Thierry Breton, who insisted on the seriousness of the current moment. “We are facing an existential threat. We are not here to steal anyone's prerogatives. What it is about is helping to protect our citizens,” Breton emphasized, anticipating the reluctance with which the plan may be received.
The new strategy for the European defense industry – a guidance document that will be followed later in the Commission's next mandate by legislative proposals – “requires the development of adequate financial means and the integration of a culture of preparedness in defense matters,” explains the institution, which encourages capitals to take advantage of the moment of general increase in military spending to bet on greater European cooperation at the industrial level in public procurement. The objective is to break “the persistent trend of demand fragmentation and make the most of the additional investments that are being made.”
Brussels has put several objectives on the table in the form of figures: ensuring that in 2030 50% of military purchases made by the Twenty-Seven come from European industry (currently 68% of purchases to donate weapons to Ukraine come from outside of the EU, mainly the United States), that 40% of acquisitions are made through joint European purchases, double what is currently the case, or that 35% of purchases are made at the intra-community level.
The biggest discussions between member states may come on the financing front of this new area of cooperation, in which Brussels demands a greater role for the European Investment Bank. The idea of launching Eurobonds to support defense policy has been received with swords raised in the Netherlands and Germany, which oppose issuing common debt to finance what they consider to be not a crisis, but a European structural policy. . France, Estonia and Poland, on the other hand, call for this new European policy to be faced with maximum ambition and demand that the Commission present “concrete financing options”.
