European nations face challenges in financing rearmament amidst strained budgets and increasing security threats. Collaborative approaches and strategic decisions are key to strengthening defence capabilities.
Rising Defence Budgets in Response to Threats
Since Russia’s invasion of Ukraine in February 2022, EU nations have significantly increased their defence spending. In 2024, defence expenditures across the EU-27 reached €326 billion, or 1.9% of the bloc’s GDP. This represents a 31% rise compared to 2021, according to the European Defence Agency (EDA).
Despite fiscal challenges, member states recognize the urgency of bolstering their military readiness. Philippe Perchoc, Director of IRSEM Europe, stresses that rearmament requires time and infrastructure, including building factories and training personnel.
Joint Approaches to Production and Financing
Collaborative production and joint arms purchasing have emerged as potential solutions to reduce costs and improve efficiency. Guntram Wolff of the Bruegel Institute advocates for joint investment in technologies like hypersonic missiles, satellites, and drones. He highlights the cost-effectiveness of working together on these critical defence systems.
However, differing national priorities complicate cooperation. For example, France prioritizes nuclear deterrence, while other countries focus on lighter or heavier equipment, depending on their needs. Joint borrowing, or Eurobonds, has also been proposed to finance these efforts. Jan Joel Andersson from the EU Institute for Security Studies argues that collective borrowing could leverage the EU’s credit strength, making defence investments more affordable. Yet, countries like Germany remain cautious about joint debt due to their fiscal policies.
Strategic Autonomy vs. Economic Efficiency
The idea of “buying European” has gained attention, with leaders like French President Emmanuel Macron promoting it to ensure strategic autonomy. Philippe Perchoc warns that relying on non-European suppliers can create vulnerabilities during geopolitical crises. However, some nations prefer non-European purchases to save costs or reduce delivery times.
Despite these debates, defence remains a national responsibility, limiting the EU’s ability to enforce unified strategies. Cooperation depends on reconciling these diverse approaches.
Europe’s rearmament efforts hinge on collaborative financing, shared production, and balancing autonomy with efficiency. Overcoming political and economic divisions is crucial for ensuring collective security in the face of mounting threats.