Europe's Defense: 5 Urgent Obligations

By Ralph Thiele, President of  EuroDefence-Germany
and Denis Verret, Vice-President of Eurodefense-France,
Co-Chairs of the EDFr-EDDe dedicated Working Group
on the French-German Relations in Defence

19 June 2025

 

1- Prioritize Priorities

The European Council has just launched a sixth wave of 11 Permanent Structured Cooperation (PSC/PESCO) projects, bringing their total number to 75. Since its establishment, the European Defence Fund (EDF) has funded over a hundred capability development projects. This has become a remarkable success.

While the White Paper for the future of European Defence identified seven critical capability gaps, a detailed reading of the list reveals in fact twice as much and that said without mentioning any priority in the naval domain. These initiatives are useful in guiding Member States towards joint procurement and cooperation, and could benefit from funding not only from the EDF, but also from ASAP (Act in Support of Ammunition Production), EDIRPA  (European Defense Industry Reinforcement through common Procurement Act) and, soon, SAFE  (Security Action For Europe) or EDIP (European Defence Industry Programme).  In view of the visible US lack of interest in continued engagement in Europe, the  Member state must do everything possible to quickly fill  the most critical gaps in the respective national, NATO and European contexts. They have to be more selective in their prioritization, having in mind also the Ukrainian emergencies.

How much would it cost, and how long would it take, to equip  themselves  and partner nations, such as Ukraine, with satellite data receivers (such as those from OneWeb) that do not depend on US approval? What production ramp-up would be achievable and how much would it cost to mass-produce various types of drone, as well as very short-, short- and medium-range surface-to-air systems of European origin, while also equipping Ukraine with the respective capabilities to defend itself?

All of these capability priorities should be the subject of joint procurement and/or cooperative projects, including with Ukraine. They would serve to meet our own needs in the face of persistent Russian threats, while also supporting Ukraine in its defence efforts.

 

2- Foster European Strategic Autonomy

We must monitor the implementation of the eligibility clauses that we are adopting for our new SAFE/EDIP schemes very strictly. The extension of these schemes to like-minded third countries is highly desirable, but should be conditional on their adherence to the European preference objective, as well as their financial contribution being proportionate to their participation in the projects.

The constitution of strategic stocks of equipment and spare parts would justify the implementation of a repayable advance mechanism to allow manufacturers to finance long-cycle procurement and cover the associated risks. The crux of the matter is orders. While the promises are lofty, implementation sometimes stalls.

 

3- Boost European Defense Industry

This is the Commission's chronic blind spot: while it feels legally entitled to intervene in the name of intra-European competition, it neglects the global scale of competition. It conceives  a European defence industrial policy solely in terms of demand, without addressing the supply side. It blatantly ignores the Draghi Report's key recommendation that Europe needs world-class champions, particularly in defence, and must consolidate its defence industry to achieve this critical scale.

The formulas that led to the successes of Airbus and MBDA in particular must be respected: shared state and industrial commitments; market-driven innovation; demand consolidation through cooperative programmes and joint procurement, and corresponding supply consolidation; integration; competitive supply chain ; exports .The EDF must take into account its mission to strengthen the European strong capabilities and embrace its ability to establish direct contracts rather than dispersing and duplicating expertise.

In order to be sustainably competitive, the European supply chain must free itself from national industrial sectors. Joint procurement, not just cooperative programmes, must foster the creation of new industrial sites and contribute to capacity increases, including in the supply chain.

On 13 April, in a significant development, Commissioner Kubilius finally acknowledged, "How can our defence companies compete on a global scale? Let's not be afraid to grow and consolidate. We must strike a good balance between building champions and maintaining the necessary space for small businesses and start-ups.” But we need to see more than words from the Commission.

 

4- Improve Governance

Member States must better define the Commission's role. Otherwise, collective inefficiency is guaranteed! This is all the more serious given that the watchword is undisputedly to spend more and better together. In this regard, the Commission has an incentive role to play; it can also play a role in devising financing solutions that meet the challenges, as it has partly demonstrated with ReArm.

If Member States agree that a common infrastructure would be better invested in by 27 members, the Commission can play a catalytic role. However, it should not replace Member States when it comes to prioritising the capabilities of their armed forces or exports. It is concerning that the Commission  is attempting—albeit unsuccessfully—to challenge non-re-export certificates, which are the cornerstone of any export control system. Yet, it is up to the Member States to make better use of the cooperation preparation tools entrusted to the EDA and the programme management tools of OCCAR (Organisation Conjointe de Coopération en matière d’Armement).

As the Member States themselves have undermined the EDA, a Franco-German reset could set an example for the EDA's future use: recommendations would be proposed to the European Council. In particular, the EDA should be tasked with urgently producing a catalogue of “low hanging fruits”, i.e. existing or planned capability solutions so that nobody can claim ignorance. The 2009 Directive, due for revision in 2026, should strenghten the mechanisms of the European defense market to address current abuses by national arms procurement bodies, whether ‘national preference’, ‘American preference’ orf or non-European options, but too rarely ‘European preference’.

Our two countries could also propose to the European Council to entrust the HR and the Defence and Space Commissioner with an 'ombudsman'-like role to alert all stakeholders to clear failures by particular Member States to respect their commitments to good conduct and by spending ‘more, better and better together’

An essential and operational parallel dimension to the governance of defence issues within the European Union is that of the governance of the coalition of the willing in preparation. What political and command organization should be established among the countries determined to provide Ukraine with security guarantees after a ceasefire and to rebuild the continent's collective security, given the possible withdrawal of Trump's United States from NATO, whether partial or more? The scope of willing states obviously does not coincide with that of the EU. Ideally, it should include all non-US NATO member states, and even strategic partner countries in the Asia-Pacific, for whom the overhaul of our continent's collective defense would be considered an essential element of their own security. This scope will probably only include some of them (NATO members or not), but clarifying the governance of this coalition is a key condition for the effectiveness and credibility of its deterrence and reassurance force.

 

5-Resolve Financing

The financing issue is still almost entirely before us! There is a consensus on the enormity and urgency of the needs, and the figure of 3.5% of GDP is already emerging as the new benchmark, possibly converted to 5% by adding the infrastructure essential to European mobility and dual-use by nature. 3.5% from 2% represents an annual increase in European  Member states defense budgets of around €250 billion per year, or €1 trillion over four years. This increase, however, cannot be instantaneous but must be achieved as quickly as possible.

Russia exceeds 9% and matches all current European efforts in purchasing power parity, and plans to increase its efforts. If we consider the €150 billion SAFE, which is a good start, spread over four years, this represents additional funding of €37.5 billion per year, 15% only of the desired effort. Contributions from the Cohesion Funds and the EIB  (European Investment Bank) are welcome additions, but still fall far short of the required scale.

This is why Chancellor Merz's remark in Brussels, two days after his election, should not be underrated  'not excluding the use of Eurobonds', stating that 'only exceptional circumstances such as COVID could justify resorting to them again'. Putin's war in Europe and Trump's disengagement constitute exceptional circumstances! Note that 300 billion of the 750 of the COVID Eurobonds would not be allocated. Reallocated to defense, they would still not be enough, but would contribute substantially: a complementary issue of around 500 billion Eurobonds over four years would be coherent.

Failing this, the necessary equipment of forces in Europe could suffer a capability gap between the most indebted countries and the least indebted ones, which would weaken the entire structure, first and foremost its military credibility as a conventional deterrent, and even the political sustainability of the effort of the least indebted countries.