Europe's Defense Dilemma: Between Transatlantic Dependence and Strategic Autonomy

The transatlantic security architecture is under pressure like never before in decades. While the Trump administration pressures European NATO partners to increase defense spending to as much as five percent of GDP, the European Union grapples with the question of whether and how it can develop an independent defense policy. Recent developments reveal a fundamental tension between American demands for burden-sharing and European ambitions for strategic autonomy.

At the center of the current debate is the planned reform of the EU procurement directive for 2026, which aims to enshrine a "European preference" in defense. U.S. Ambassador Andrew Puzder and Matthew Whitaker have made it clear in a joint statement that Washington is following this development with great concern. The ambassadors warn that initiatives such as the Security Action for Europe (SAFE) program and the European Defense Industry Program (EDIP) systematically restrict market access for American companies. Particularly problematic is the proposed 35 percent cap on U.S. industrial participation, which significantly complicates joint transatlantic defense projects.

The American position is not unfounded. The United States continues to bear a disproportionate share of European defense burdens. In particular, Europe relies on American production capacities for technologically demanding systems such as air defense and precision munitions. The ongoing war in Ukraine has dramatically highlighted this fact: F-16 spare parts, Patriot interceptors, and modern artillery ammunition largely come from American manufacturing. U.S. production lines must already operate under high pressure to supply both its own forces and allies worldwide.

However, the European perspective reveals another dimension of the problem. As a recent analysis in Foreign Affairs outlines, the European Union is structurally unable to become a true military power. Brussels lacks its own army and the authority to directly make defense expenditures. The EU can only subsidize member states through financial grants or theoretically through joint borrowing. The latter would effectively result in financial transfers from Germany and the Netherlands to countries like France, Italy, or Greece—a politically highly explosive constellation.

The differing strategic interests of EU member states further exacerbate the dilemma. While the Baltic states and Poland perceive the Russian threat as existential, Southern European countries primarily focus on security challenges in the Eastern Mediterranean, the Middle East, and North Africa. A consolidated European defense industry would force countries to forgo important sources of employment and exports in favor of a system with low democratic control. France, which vocally demands strategic autonomy, would paradoxically be the most affected: Paris would have to abandon its doctrine of national independence pursued since 1958—a reason why the Franco-German FCAS fighter jet project has already failed.

Germany faces a particularly delicate situation. The German social contract has been based for decades on a combination of extensive employment in manufacturing and membership in the Eurozone. This consensus is already under pressure: The German industry is struggling with massive adjustment problems after the loss of cheap Russian energy and is facing increasing competition from China. In February 2026, Brussels decided against Berlin's resistance to finance support for Ukraine through joint borrowing rather than frozen Russian assets. In this context, proponents of European autonomy are now demanding from German taxpayers simultaneously increased defense spending, the purchase of military equipment predominantly produced outside Germany, and the subsidization of defense expenditures of other EU countries. Each of these demands would be politically explosive in its own right; together, they form a political powder keg that could boost extreme parties on both the left and right.

The solution to this dilemma requires a pragmatic middle ground. EU institutions should largely withdraw from defense issues and instead focus on economic growth within existing competencies. In the short term, there is no alternative to American provision of expensive and technologically advanced capabilities to deter Russia. In the long term, new spending programs should be developed through intergovernmental agreements, with NATO ensuring interoperability among members. Importantly: Increases in defense spending do not need to be evenly distributed proportionally across all EU member states. Rather, these commitments should vary depending on the fiscal leeway and political will of voters. Fortunately, it is precisely the Northern European states and those on NATO's eastern flank that are the most capable and willing to increase their defense budgets in response to the Russian threat.

Europe should also look beyond its borders. Projects like the GCAP fighter jet development program between Italy, Japan, and the United Kingdom strengthen European security. Poland is acting rightly by collaborating with South Korea to procure military equipment and gain expertise, as both countries rely on large conventional ground forces. EU member states should commit to granting all U.S. contractors partner status in Brussels' defense financing initiatives.

The United Kingdom remains Washington's most important partner in this realignment. Through cooperation in the defense industry and nuclear sector, as well as through the Five Eyes intelligence network, London and Washington maintain an unprecedented and deepening geopolitical partnership. The former Conservative government pioneered "minilateral" defense partnerships through AUKUS and the Joint Expeditionary Force. Nevertheless, there is room for improvement: Despite strong bipartisan support for Ukraine, British defense spending is rising too slowly and is not expected to reach 3.5 percent until 2035. Washington should encourage the United Kingdom to spend three percent of GDP before the end of the current legislative term in 2029.

The division of labor between economic and military affairs has secured peace and prosperity in the Euro-Atlantic area for over 70 years. Recklessly abandoning this order in pursuit of an idealized concept of European power projection would be dangerous. Instead, policymakers on both sides of the Atlantic should view European institutions as they are—not as one would like them to be. By prioritizing intergovernmental cooperation among like-minded countries, Washington and Brussels can secure peace and prosperity in Europe for another generation.