In early March, the EU released its first-ever European Defence Industrial Strategy (EDIS), accompanied by a proposed regulation establishing the European Defence Industry Programme (EDIP). The aim is to boost defence capabilities in Europe through greater and more efficient spending. In particular, the strategy seeks to reverse recent trends, whereby 78% of defence acquisitions by EU countries since Russia’s full-scale aggression against Ukraine were made with non-EU producers, with U.S. firms accounting for 63%. It also addresses recent concerns by the defence industry over ESG constraints on obtaining private financing.
The ultimate benchmark for success, as recounted by one EU foreign minister, is whether these measures will help deter Russia and other adversaries. Nonetheless, it reflects greater operational focus of the EU on defence and security issues, and what in practice the European Commission and other EU institutions can do to bolster capabilities in a policy area that will remain the primary prerogative of EU Member States.
Plugging Defence Gaps
Since the end of the Cold War, European defence has suffered from perennial underinvestment and lack of policy support for the defence industry. Whereas Europe collectively spent on defence over half of the U.S. totals in the early 1990s, it now spends about one-third compared to the United States—arguably at a time of much greater security threats to Europe compared to America. There are simply not enough soldiers, tanks, planes, ships, missiles, guns, and ammunition in Europe, nor domestic facilities to produce the necessary weapons systems and materiel. Moreover, EU countries have procured defence products at a national level, exacerbating fragmentation within the European market. This fragmentation has led to the creation of national industrial silos and numerous defence systems that often lack interoperability.Continue Reading Mobilizing Greater Defence Capabilities in Europe: the EU’s Defence Industrial Strategy