Europe finances 12 billion euros of American arms production — and calls it strategic sovereignty

NATO Secretary General Mark Rutte announced a remarkable figure to PBS on February 14: The United States will deliver military goods worth 15 billion US dollars (around 12 billion euros) to Ukraine in 2026 — financed by European NATO partners. "About one billion euros per month," Rutte specified, "critical lethal and non-lethal equipment, including missile interceptors." At the same time, Brussels is celebrating the 178 billion euro credit line SAFE (Security Action for Europe) as a breakthrough for European defense autonomy. The central condition: At least 65 percent of all procurements financed with SAFE funds must be of European origin. The 107 billion dollar aid package from the EU for Ukraine also stipulates that Kyiv should purchase "European weapons as much as possible."

The question is obvious: How does a 12 billion euro order with American defense contractors fit into a policy of "European preference"?

The institutional paradox: Bilateral autonomy, multilateral dependence

Germany plans to spend only eight percent of its new defense budget — a total of 77 billion US dollars over five years — on American systems, as reported by The Atlantic. Berlin is even developing its own satellite communication network to replace Starlink. France is even more consistent: Paris has not yet applied for SAFE funds and has emphasized for years that "strategic sovereignty" means forgoing American technology.

On a bilateral level, "Buy European" works quite well. But what means autonomy at the national level transforms into structural dependence at the NATO level. The 12 billion euros that European taxpayers transfer to Washington through NATO mechanisms flow into American production lines — at Raytheon, Lockheed Martin, General Dynamics. Europe is not only financing the arming of Ukraine but also the capacity expansion of the American defense industry.

Financing vs. production capacity: Who builds, who pays

Latvian Defense Minister Andris Spruds raised a fundamental criticism of SAFE in an interview with Euronews on February 18: "We need grants, not just loans." His warning targets the core of the problem. SAFE is a loan instrument, not an investment program. European governments borrow money to buy weapons — but they do not build factories.

The 12 billion euros that will flow to the USA through NATO in 2026 create jobs in Pennsylvania and Texas, not in Lusatia or Northern France. They expand the production capacity of Patriot systems and Javelin missiles in the United States. Europe acts as a financial intermediary, not as an industrial player.

Latvia receives 3.5 billion euros from SAFE — as a loan. This money will be used for IRIS-T systems (in cooperation with Germany and Estonia) and armored personnel carriers (with Spain). But without grants, there is no incentive to build domestic production facilities. Loans finance purchases, grants finance capacities.

The double standard: European preference for whom?

It is not without a certain irony that the EU dictates to Ukraine to purchase "European weapons as much as possible," while simultaneously allowing 12 billion euros to flow into American production through NATO channels. This double standard reveals the actual logic: "Buy European" only applies where there is European production capacity. Where this is lacking — in missile defense, precision munitions, satellite communication — American suppliers are relied upon.

But this is precisely where the strategic failure lies. SAFE would have offered the opportunity to identify those areas in which Europe is structurally dependent and to build production capacities in a targeted manner. Instead, the current practice solidifies the existing division of labor: Europe pays, America produces.

Why "European preference" fails before it begins

The rhetoric of strategic autonomy stands in stark contrast to the institutional reality. As long as European defense spending is primarily coordinated through NATO structures, Washington remains the gatekeeper. NATO is not an instrument of European industrial policy — it is an alliance historically designed to facilitate American arms exports.

SAFE could work if it meets three conditions: First, the funds must be granted as grants, not loans. Second, Europe must identify those technologies on which it is currently dependent on the USA and build production capacities in a targeted manner. Third, procurement must occur through EU mechanisms, not through NATO.

None of these conditions are currently met.

Debt does not build factories

Europe has increased its defense spending by 67 percent over the past two years — a remarkable figure. But higher spending does not automatically mean strategic autonomy. As long as a significant portion of these funds flows through NATO channels into American production lines, Europe remains a wealthy customer, not a sovereign actor.

12 billion euros could be enough to establish several production facilities for air defense systems, precision munitions, and drones in Europe. Instead, they will expand the capacities of American defense contractors in 2026. This may secure the supply for Ukraine in the short term. In the long term, it cements the dependency that SAFE was supposed to overcome.

Strategic sovereignty requires investments in production capacity, not just in procurement. Europe must choose: Does it want to become an autonomous actor — or remain a well-financed buyer of American arms?