EU: First steps towards European defense self-sufficiency – 2024-03-16 09:58:14

An attempt to reduce the dependence of EU member states on the American arms industry is seen by several analysts behind the first European industrial strategy in the field of defense, which was presented last Tuesday by the European Commission.

After all, key points of the strategy are the goal to procure at least 40% of defense equipment in a collective way by 2030 and the assurance that purchases of defense material within the Union will represent 35% of the total value of the European defense market. At the same time, the strategy asks the member states to make the corresponding progress so that 50% of their defense budget concerns European defense material by 2030 and 60% by 2035.

What is valid until today

Regarding the situation to date, the Commission presented data showing that almost 80% of weapons are purchased from foreign companies, of which more than 60% are purchased from the USA. It stands to reason that the move towards greater European self-sufficiency in defense will primarily hurt US companies – which set record global sales in 2023.

Asked to comment on whether the EU strategy is bad news for the US defense industry, the European Commission’s executive vice-president Margaret Vestager he commented: “Europe will be more self-sufficient, but obviously not fully self-sufficient.”

For his part, the Internal Market commissioner Thierry Breton stated that the American defense industry cannot meet all of Europe’s needs, especially in terms of ammunition. Mr Breton also reassured those worried that the strategy could run counter to NATO’s interests. “All this is done in close cooperation with NATO. The standards we are developing in Europe are the standards of the Alliance,” the commissioner emphasized.

As for the criticisms against the European defense industrial strategy, these are mainly focused on the financial side, as the European Defense Investment Program (EDIP) presented has resources amounting to 1.5 billion euros.

Very small amount

This amount is considered very small in relation to the requirements of the ambitious strategy, with estimates suggesting the need to disburse approximately 100 billion euros for its full implementation.

For this purpose, various possible options have already begun to be considered, such as the use by the poorer member states of resources from the Cohesion Fund, so as to cover the difference in the budget with the richer ones. The Commission is also pushing the European Investment Bank to change its lending policy and allow the approval of loans for defense investments, which is not happening to date.

On the other hand, the inclusion of Ukraine in the European strategy is considered of particular importance. In particular, Ukraine is treated almost like a member of the EU and can participate in joint procurement, while Ukrainian companies will be able to receive money from the EDIP. As Mrs. Vestager also said, “this choice is a message for the future of Ukraine as an EU member state”.