Europe's pursuit of defense industry autonomy is a long and arduous road
■ Fan Sai Li Shuyin
June 8, the Future Combat Air System (FCAS) next-generation manned fighter development project jointly promoted by France, Germany and Spain was terminated. This project, launched in 2017, was once hoped to be a "key project" for European defense autonomy. However, after nine years of tug-of-war, it ultimately fell prey to irreconcilable differences between France and Germany. Neither side would give in, so they had to part ways.
The FCAS project is a mirror reflecting the difficulty of the question of European defense industry autonomy that must be answered against the backdrop of the prolonged Russia-Ukraine conflict and increasing uncertainties in transatlantic relations. In recent years, from top-level strategies to specific projects, Europe has made frequent and unprecedented efforts, but the development of related industries remains constrained by deep-seated structural contradictions and progress is slow.
Institutional construction accelerates, autonomous system begins to take shape
After the outbreak of the Russia-Ukraine conflict, Europe's military stockpiles were quickly depleted, the equipment supply gap became prominent, and external technological dependence deepened... These multiple shortcomings continuously weakened its geopolitical influence, forcing Europe to accelerate the construction of an institutional system for defense industry autonomy.
At the strategic guidance level, consensus building and document release advanced in tandem. In 2022, the EU released the "Versailles Declaration" and the "Strategic Compass", requiring member states to significantly increase defense spending, consolidate the foundation of local defense technology and industry, and set the overall goal of EU security and defense construction. In 2025, the EU released the "European Defense White Paper: Ready for 2030", establishing defense industry autonomy as a strategic priority; the concurrently launched "ReArm Europe Plan" proposed the ambitious goal of mobilizing 800 billion euros in defense investment. In the same year, major NATO member states reached a consensus in The Hague, pledging to increase defense spending as a share of GDP from 2% to 5% by 2035, anchoring a historic long-term baseline for European defense budgets.
At the development framework level, industrial planning and mechanism upgrades proceeded on dual tracks. In 2024, the EU released its first "European Defense Industrial Strategy", proposing that by 2030 and 2035, member states' domestic procurement of defense equipment should account for no less than 50% and 60% respectively, and joint procurement should account for no less than 40%. The 2025 "European Defense Industrial Program" proposed allocating 1.5 billion euros from 2025 to 2027, providing an important blueprint for subsequent larger-scale defense industry policies. The EU also continuously strengthened the "Permanent Structured Cooperation" (PESCO) mechanism, requiring participating countries to increase defense spending, coordinate defense resource planning, and deepen defense technology and industrial cooperation. In recent years, the pace of operation of this mechanism has significantly accelerated, with dozens of cooperation projects launched, covering land, sea, air, space, cyber and many other key areas.
In terms of funding guarantees, emergency tools and long-term funds worked in synergy. In the short and medium term, the "Act in Support of Ammunition Production" (ASAP) and the "European Defence Industry Reinforcement through Common Procurement Act" (EDIRPA) were used to leverage joint procurement and expand ammunition production capacity, though their scale is relatively limited. In the long term, the European Defence Fund (EDF) from 2021 to 2027 has a budget of about 8 billion euros, with an annual allocation of about 1 billion euros for 2026, investing in high-altitude anti-missile, next-generation fighters, as well as cutting-edge fields such as quantum-secure networks, electronic warfare, and artificial intelligence. In addition, a "Defence, Security and Resilience Bank" under the NATO framework is also being prepared. This bank is positioned as a multilateral financial institution, aiming to provide long-term low-interest loans to support key defense projects.
Real-world problems overlap, progress is arduous
Although the institutional framework for EU defense industry autonomy has taken initial shape, in the actual process of advancement, real-world problems such as funding, production capacity, technology, and cooperation are layered one on top of another.
At the funding level, a contrast between rising total amounts and structural imbalances emerges. Since the Russia-Ukraine conflict, Europe's total defense spending has risen sharply, but the structural bias in the allocation of funds is very prominent, and the stimulus to the local defense industry is very limited. Data from the European Defence Agency (EDA) shows that in 2022, total defense spending by EU member states reached 240 billion euros, but the share of joint procurement of equipment was only 18%, far below the established benchmark of 35%. A report commissioned by the European Commission, "The Future of European Competitiveness", shows that from June 2022 to June 2023, total defense procurement by EU member states was about 75 billion euros, of which about 78% went to non-EU suppliers, with the United States alone accounting for about 63%. The massive outflow of funds contrasts sharply with the shortage of defense funds, exposing the EU's shortcomings in coordinating defense funds and guiding industries.
At the production capacity level, scale expansion and systemic shortcomings are intertwined. To fill the gaps exposed by the Russia-Ukraine conflict, Europe launched the largest expansion of military industrial capacity since the end of the Cold War, but systemic shortcomings remain prominent. In the early stages of the conflict, Europe's annual production capacity of 155 mm artillery shells was only about 300,000 rounds. The EU invested 500 million euros to promote expansion, aiming to achieve an annual output of 2 million rounds. Driven by policies, companies such as Germany's Rheinmetall have seen significantly accelerated capacity expansion. However, overall, Europe's defense industry has long been organized according to peacetime demand, with insufficient production line flexibility and weak mobilization capacity in wartime. Expansion also faces multiple bottlenecks such as tight raw material supply, shortage of skilled workers, and incomplete supply chain support. A 2025 report by the London-based International Institute for Strategic Studies (IISS) pointed out that although Europe's ammunition production capacity has increased rapidly, it still falls short of supporting a high-intensity sustained conflict.
At the technology level, insufficient investment and external dependence form a vicious cycle. Data shows that in 2022, the EU's total defense R&D investment was only 10.7 billion euros, accounting for 4.5% of total defense spending; in contrast, the U.S. defense R&D, testing, and evaluation budget for fiscal year 2023 was about 140 billion dollars, accounting for 16% of total defense spending, a huge gap. A 2023 report by the EDA pointed out that in fields such as artificial intelligence, quantum technology, space reconnaissance, electronic warfare, and next-generation aviation power, the technology gap between Europe and the United States continues to widen, and in some areas, Europe is even being overtaken by emerging countries. More棘手 is that the combat systems, data links, and logistics of many European countries' militaries are deeply integrated with U.S. equipment, and switching to local alternatives would incur high conversion costs and compatibility risks. Insufficient investment exacerbates the technology gap, and the technology gap further strengthens dependence on the United States. This vicious cycle severely constrains the pace of Europe's defense technology autonomy.
At the cooperation level, collective goals and national interests are difficult to synchronize. In technology R&D, the European FCAS project saw continuous disagreements among parties, and the project ultimately failed. After Brexit, the UK "wooed" Italy and Japan to advance the Global Combat Air Programme (GCAP), forming parallel competition with the Franco-German-Spanish project, further dispersing the already limited European military aviation R&D resources. In equipment procurement, Poland purchased South Korean tanks and fighter jets, Germany introduced U.S. F-35 fighters and took the lead in promoting the "European Sky Shield Initiative" centered on U.S. and Israeli air defense technologies, all of which run counter to France's promotion of "European local solutions". Overall, the situation where national interests take precedence over collective interests is relatively common, becoming an important factor constraining European defense industry autonomy.
Deep-seated contradictions intertwine, breaking the deadlock requires time
Examining the process of European defense industry autonomy, there are three layers of structural contradictions deeply embedded in Europe's political traditions, security architecture, and economic foundation, determining that this road is bound to be tortuous.
There is a ceiling on the transfer of national sovereignty. The defense industry is a core pillar of national sovereignty. After more than half a century of European integration, the defense field has never broken through the core boundaries of sovereign states. Whether it is PESCO or the EDF, they remain intergovernmental cooperation mechanisms, not supranational governance arrangements. Countries retain the final say on key issues such as equipment requirements, technical standards, and export controls. The repeated setbacks in European defense cooperation stem from the fact that no country is willing to hand over the future of its national defense industry to a multinational mechanism.
Dependence on transatlantic security relations is deeply entrenched. Since the end of World War II, Europe's security architecture has been deeply embedded in the NATO system. NATO is not just a military alliance; it is a complete set of equipment systems, technical standards, and operational paradigms. For some countries, U.S. security guarantees are far more reliable than "immature European autonomy". Rather than spending money to support European local defense industries, it is better to directly purchase U.S. equipment that has been tested in actual combat, thereby deeply binding the security relationship with the United States. From the very beginning, European defense industry autonomy has lacked a unified political consensus basis.
Market fragmentation weakens the competitiveness of the defense industry. The modern defense industry is both capital- and technology-intensive, highly dependent on economies of scale. The R&D investment for an advanced fighter or main battle tank can easily cost tens of billions or even hundreds of billions of euros, and it must rely on a sufficiently broad market and sufficient orders to spread costs and maintain production lines. However, the security needs, operational concepts, and equipment preferences of European countries vary, and the fragmented procurement model cuts the market into small pieces. Duplicate R&D and duplicate construction of equipment not only waste resources but also fail to form synergy. Fragmentation also directly leads to the small size and weak international competitiveness of European defense enterprises. The defense revenue of just one U.S. company, Lockheed Martin, is close to the total of Europe's top five defense companies.
From the 2022 "Versailles Declaration" to the 2025 "ReArm Europe Plan", the blueprint for European defense industry autonomy has been drawn in several versions. But between institutional design and capability implementation, the obstacles are not industrial issues but insurmountable political differences. Whether Europe can find a way out amid the tug-of-war between sustained investment and interest coordination will not only determine the success or failure of its strategic autonomy but also profoundly affect the transatlantic relationship and the global strategic landscape.
(Authors' affiliation: Academy of Military Sciences)
