Executive Summary

However, there are already ominous signs that some states will not keep their spending pledges. Moreover, the EU initiatives currently lack the necessary financial clout and political support to make a real difference, while the need for speed in procuring equipment risks further fragmenting Europe’s defense industrial base. European defense is currently stuck between the status quo ante and the required transformation. Europeans need to come off this fence and commit to transforming how they cooperate. Otherwise, they will jeopardize the ability to defend themselves, become unable to support Ukraine over the long term, and risk marginalization in NATO.

Russia’s war against Ukraine exposed the dire state of European defense once and for all (Chapter 2). European capability gaps are vast; defense industries have been scaled down; and Europeans hardly cooperate. But the war could unleash new dynamics. Carried by public support for greater defense spending and cooperation, European policymakers have committed themselves to transforming European defense. The EU is trying to seize the moment by launching several initiatives that, if properly supported and funded, could help overcome the pathological fragmentation of Europe’s defense industrial base and establish the Union as a strategic enabler for NATO. But more needs to be done.

Transforming European defense in times of war and overcoming fragmentation first require agreeing on the needed capabilities (Chapter 3). Europe’s capability gaps cannot all be closed. Europeans therefore need to prioritize and plan better together, both within and between the EU and NATO. Indeed, Putin’s war against Ukraine has led to a convergence of threat perceptions vis-à-vis Russia. The long-standing dilemma between territorial defense and crisis management has become less salient as priorities have shifted toward the former. At the same time, Ukraine’s battlefields offer somewhat contradictory lessons on the future of war, giving rise to a new dilemma. Faced with a war of attrition, heavy weapons remain relevant as the backbone of territorial defense. At the same time, defense innovation has been key. Drones and loitering munitions have proven their effectiveness and data-connectivity has been an important enabler of effective warfare. To close both legacy and emerging capability gaps while avoiding new dependencies, Europeans will have to stay on top of the developments in warfare, invest more in defense innovation, and secure supply chains of strategic raw materials and semiconductors.

Setting joint priorities should lay the foundation for deeper cooperation in development and procurement (Chapter 4). In the past, Europeans have mostly developed and procured on a national basis or bought equipment off-the-shelf abroad. This has led to costly duplications of military capabilities, weakened Europe’s defense technological and industrial base, and undermined the interoperability between national forces. In their scramble to rearm as quickly as possible since February 2022, Europeans have doubled down on national approaches. The EU has tabled several initiatives to incentivize joint development and procurement, including the European defence industry reinforcement through common procurement act (EDIRPA) and the Ammunition Initiative. While crossing erstwhile red lines, their impact is likely to be limited as the initiatives currently lack both funding and political support among the member states. NATO, the Organisation for Joint Armament Co-operation (OCCAR), or ad-hoc cooperation may offer alternative pathways but there are still too few precedents of successful multinational arms projects. Fragmentation can only be overcome if European states resist their unilateral instincts and if EU, NATO, and intergovernmental initiatives dovetail.

Five recommendations emerge from this report to help policymakers transform European defense (Chapter 5). First, they need to up their defense spending pledges and keep them. Second, they need to synergize NATO and EU planning and promote specialization. Third, policymakers should use the Ammunition Initiative as a model for other urgently needed equipment. Fourth, EU member states need to significantly increase common funds for joint procurement and ramping up of production capacities. And fifth, they need to move toward creating a single market for defense.