The European Union on March 5 outlined ambitious plans to boost its defence industry as it responds to the threat posed by Russia’s war on Ukraine and seeks to wean member nations off an over-dependence on the U.S. defence industry.
The plans by the EU Commission centre on streamlining the procurement of arms by the 27 EU states and to produce them within the bloc in a multi-billion-dollar pivot away from the United States.
Strategic independence
In the first 16 months since the February 2022 start of the Ukraine war, “member states spent more than €100 billion on defence acquisitions,” said EU Commission Vice President Margrethe Vestager. “Almost 80% of that was spent outside of the European Union and the U.S. alone accounted for more than 60% of this spending.”
"This is no longer sustainable — if it ever was,” Ms. Vestager said.
The need for some strategic independence from the EU’s pre-eminent ally in NATO underscores a sense of political estrangement from Washington, which has been reinforced by the strong showing of former President Donald Trump in the U.S. presidential campaign and his barbed comments on the level of European defence spending.
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For decades, EU nations have slumbered under the protective nuclear cover of the United States through the NATO alliance while their defense spending and crisis preparedness withered.
EU Commissioner Thierry Breton, who is a driving force behind a stronger EU defense industry, said it was essential for the bloc to fall back on its own industrial base.
“Will it be bad news for the U.S. defence industry, the Korean defense industry? I don’t know. What we know is that we need to increase our capacity to produce what is needed. And by the way, today we have to be honest, the U.S. cannot provide what is necessary, especially for ammunitions.” Mr. Breton said.
Impact of Russia-Ukraine war
Now, with an increasingly assertive Moscow, the need to beef up defence is becoming ever clearer.
“After decades of underspending, we must invest more on defence, but we need to do it better and together," EU foreign policy chief Josep Borrell said. "A strong, resilient, and competitive European defence industry is a strategic imperative.”
Russia's invasion of Ukraine has exposed glaring weaknesses in Europe’s arms manufacturing capacities that were neglected in the wake of the 1989 fall of the Berlin Wall and the promise of a peace dividend in Europe.
So when Kyiv was badly in need of the most elementary ammunition to stave off Russian forces, European nations were caught out, unable to deliver what was asked and even promised.
The realization that Trump might return to the White House and undermine support for Ukraine has also focused minds in Europe. EU heavyweights France and Germany have warned that the bloc must do more to protect itself.
Investing in Europe’s defence industry
After years of go-it-alone defence strategies that left Europe divided despite high spending, the plan seeks to impose common strategies. The plans now have to be assessed by member states and will need to be endorsed unanimously.
“Our defence spending goes to too many different weapon systems, primarily bought from outside the EU," said Ms. Vestager. With defence budgets in EU member states rising, "we should invest better, which largely means investing together, and investing European.”
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Under the proposals, the 27 member states will be invited to buy at least 40% of defence equipment together and make sure that 35% of the defense value represents internal trade by 2030.
The plans now go to the member states where they will be further negotiated.
The war in Ukraine spurred European nations to hike defence spending, and a lot of money is destined for the U.S. defence industry. Germany, for example, announced a 100 billion euro ($108 billion) upgrade of its armed forces, with a big chunk of the funds dedicated to U.S. F-35 fighter jets and transport helicopters.
While production is improving, the EU had aimed to be making 1 million artillery shells annually by now but is only making around half that figure. Officials now say that production could reach 1.4 million shells per year by the end of December.
