In a changing global landscape, Europe's defence industry is being reshaped and revitalised. Over the past five years, EU member states have boosted their defence spending by 63 percent to reach €381 billion euros in 2025.
Jacob Parakalis, Research Leader for Defence Strategy, Policy, and Capabilities at RAND Europe, says Russia's full-scale invasion of Ukraine in February 2022 "focused attention on the need to increase Europe's defences and invest in capabilities across land, sea and air domains, cyber security and resilience".
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He says the bigger budgets are targeting specific needs. "A lot of it is going to reinvigorate the industrial base. One thing that the war in Ukraine has revealed is the speed with which existing stocks of weapons are exhausted. So being able to manufacture large numbers of artillery shells, to repair damaged armoured vehicles, to maintain fighter aircraft to get them back in the fight, to train and sustain forces of all types, is really critical. The burn rate with which weapons and ammunition are used is far beyond anything that Europe has experienced in the last 30 or 40 years. So that kind of investment is really critical in order to credibly be able to be prepared for a long, conventional war."
US President Donald Trump's threats over Greenland have also put a spotlight on Europe's reliance on American technology. "I think we're talking about years into decades" before the EU could cut those ties, Parakalis tells us.
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The US is the top exporter of arms in the world, and Parakalis says that's partly because of the way its technology is sold. "It's about the way the weapons are knitted together with systems of sensors, it's about the enabling equipment. The US sells a coherent network, it sells a system of systems that allows these things to work together. Very few countries sell all the individual pieces of a system of systems. China is getting close, Russia does although its performance in Ukraine has broadly left something to be desired. Europe, collectively, is close. But the problem is there are different European companies producing different, sometimes competitive and sometimes not wholly overlapping elements of these systems, so it's harder for there to be a singular European offering which is competitive with the singular American offering."
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