Richard Whitman / Apr 2025
Kaja Kallas, High Represntative for Foreign and Security Policy, and Andrius Kubilius, European Commissioner for Defence and Space. European Union, 2025
ReArming for a SAFEr Europe
The newly published joint European Commission and High Representative defence White Paper and the commitments under ReArm Europe Plan/Readiness 2030 create the basis for a new departure in EU defence and with the prospect of the financial infrastructure to drive a surge in the development of Europe’s defence industries to provide the defence capabilities to secure Europe.
ReArm Europe Plan/Readiness 2030 may provide the basis for eroding what are 27 separate national markets with division and duplication the main consequences. In addition to the well-known production of multiple Main Battle Tank, fighter, and air defence variants produced to meet different national specifications, Europe’s defence industry is also marked by a very large number of SME’s with significant scope for consolidation through merger and acquisition. President von der Leyen has set the very high level of ambition to create a single market for defence for the EU27: eliminating all of the obstacles that exist to create a level playing field on defence-related goods and services trade between the member states is a formidable undertaking.
Drawing a dividing line in Europe
In the ambition to build greater security for the EU, however, as currently constituted, ReArm Europe Plan/Readiness 2030 has the potential to draw lines of division within Europe. The €150 billion Security Action for Europe (SAFE) loan funding for defence capabilities acquisition restricts purchasing outside the EU to EFTA members of the EEA and Ukraine. On the basis of its design it places the defence industries of Turkey and the UK outside the circle of partnership. The logic of the exclusion of these countries is explicable in terms of a distinction being drawn between the EU27 and the third countries with existing security and defence agreements with the EU and those, like London and Ankara, who have not signed an agreement. However, it misses a major political opportunity to draw closer to the UK with which the EU shares an identical view as to the centrality of securing Ukraine as the cornerstone of the future defence of Europe. Sidelining the UK at this critical moment in European security with the US seeking to accommodate Russia in its war on Ukraine over the heads of Europeans seems an especially unfortunate outcome. UK media coverage, quoting defence insiders, has questioned whether a joint approach to European defence and security is possible with the EU. Whether this is a temporary stumble in an otherwise smooth run in to the May EU-UK summit in May remains open or whether the security and defence relationship between London and Brussels will be more rhetorical than real. But it is a poor backdrop for negotiations on an EU-UK security and defence agreement.
Not withstanding the question of how third countries connect to the procurement elements of ReArm Europe Plan/Readiness 2030 greater ambition is needed in linking all European states – EU and non-EU – into a shared eco-system of defence capabilities development. Europe’s defence industry will only gain sufficient mass to challenge the dominance of the U.S. defence industry in supplying Europe’s defence equipment if there is a willingness to think at scale beyond the EU27. This means thinking as to what arrangements might be made to accommodate all European states for collective benefit. The UK and Turkey are as much large European defence markets (with defence budgets of £53.9 billion and $47 billion respectively) as they are key defence industry players.
A counterpart project to the European Commission’s EU single market for defence should be the push for a bigger and broader European common market for defence. A key imperative would be to see the elimination of any barriers that inhibit the full integration of Ukraine into Europe’s defence industrial base. The underlying rationale is simple: creating an economic space in which the organising imperative is to work to remove (the multiple) barriers to trade and investment in defence-related items between participating European states and the EU27. The creation of such a sector-specific common market would not be a panacea for the multiple inefficiencies that hinder the growth of Europe’s defence industries but, at a minimum, provides an economic space for greater economies of scale, and a platform for a subsequent push on arrangements to see defence goods, industry investments, knowledge and expertise, and security and defence-related data, moving more freely.
The EU has embarked on its own project to re-arm – it also needs to consider how it might contribute to a whole-European condition of greater defence readiness. Now is the best moment to create a truly common European defence market that harnesses all of the continent’s potential, ensuring Europe’s security, strategic autonomy, and industrial strength for decades to come.
A lengthier paper by the author and published by the EPC can be found here.
