Europe's Defense Industry Between Autonomy and Alliance Obligations

The European Union is spending more money on defense than ever before since the end of the Cold War. In 2024, it amounted to 343 billion euros, with further growth planned for 2025. At the same time, NATO Secretary General Mark Rutte warned in early February 2026 of barriers from European arms manufacturers that could exclude key partners like the United Kingdom, the USA, or Turkey. The warning is not mere diplomatic saber-rattling but highlights a fundamental problem: Europe's pursuit of "strategic autonomy" threatens to weaken the alliance structures on which the continent will remain dependent for decades to come.

The dilemma is of an institutional nature. The EU Commission has created an ambitious framework with programs like the European Defence Fund (EDF) and more recently the "ReArm Europe/Readiness 2030" initiative, which aims to mobilize up to 800 billion euros. The Support to Arms Production and Enhancement (SAFE) program acts as a lever for joint procurement. So far, so good. However, in practice, the desire for European arms autonomy collides with the realities of alliance defense.

The central tension lies in the question of who is allowed to benefit from European arms programs. EU member states are increasingly pushing for European defense funds to primarily flow to European companies. This sounds plausible—until one realizes that the United Kingdom, the USA, and even Turkey are essential NATO partners whose defense industries have been integrated into European supply chains and technology development for decades. Excluding these partners would not only increase costs and hinder innovation but also undermine the strategic coherence of the alliance, whose deterrent effect Europe still existentially needs.

Rutte's warning about "autonomy as protectionism" hits a nerve. Historically, EU member states have protected their national defense champions—Germany its tank manufacturers, France its aircraft designers, Italy its shipyards. The result is a fragmented European defense industry with too many parallel programs, too little standardization, and prohibitively high unit costs. The Eurofighter Typhoon, for example, is produced in four different national variants, making maintenance and upgrades unnecessarily complicated. European armed forces operate with over 30 different types of battle tanks, compared to the USA, which essentially relies on one type (M1 Abrams).

The bitter truth is: money burns quickly in Europe's fragmented defense landscape. Higher defense spending does not automatically lead to increased military capability if the money flows into national parallel developments, politically protected industrial structures, and a lack of interoperability. For instance, Germany's special fund of 100 billion euros has largely evaporated without the Bundeswehr becoming significantly more operationally ready. The reason lies not in malicious intent but in structural inefficiencies: procurement bureaucracy, national specifications, and a lack of economies of scale.

Strategic autonomy—if it is to be more than a press release—requires industrial consolidation. But this is precisely where EU policy becomes contradictory. On the one hand, Brussels preaches cooperation and joint procurement. On the other hand, member states rely on "Buy European" clauses that effectively degenerate into "Buy National" because every government wants to ensure that defense funds stay in their own country and create jobs. Even PESCO (Permanent Structured Cooperation), which was celebrated as a breakthrough in 2017, has so far created hardly any visible operational capabilities. Of the 60 PESCO projects, none has resulted in a deployable, cross-border capability that would generate significant military value.

The alternative—a genuine consolidation of the European arms industry modeled after the American or South Korean examples—would require political courage that no government is willing to muster. France would have to accept that Dassault merges with BAE Systems. Germany would have to allow Rheinmetall to take over Italian shipyards. Poland would have to contribute its newly built tank capabilities to transnational consortia. Each of these steps would be politically toxic because it relinquishes national sovereignty over defense production.

That is precisely why Rutte's intervention—however diplomatically clumsy it was formulated—is strategically correct. If Europe defines "autonomy" as the exclusion of non-EU NATO partners, it weakens itself doubly: First, it loses access to British, American, and Turkish technology and production capacity. Second, it sends a signal that NATO is no longer a real strategic priority but merely a transitional solution until Europe stands on its own feet—a point that realistically lies decades away, if it ever occurs.

The British stance under Keir Starmer is revealing in this context. Despite Brexit, London is actively seeking closer defense cooperation with the EU and is considering access to SAFE programs. This is not a sign of British weakness but realism: European security can no longer be organized along formal membership lines. The threat landscape—whether from Russia or through hybrid destabilization—requires practical industrial and operational cooperation, regardless of who has voting rights in Brussels.

What is missing is an honest debate about Europe's actual options. "Strategic autonomy" sounds like sovereignty and capability. In reality, however, autonomy in defense is not a binary state—you either have it or you don't—but a gradient. Europe can and should reduce its vulnerability to American political fluctuations. But this reduction does not require the establishment of a parallel European defense architecture; rather, it necessitates the painstaking work of capability integration within the existing NATO structures.

Specifically, this would mean: interoperability before national specifications. Joint procurement before national champions. Standardization before political symbolism. And—that is the painful part—acceptance that true autonomy can only be achieved through painful sacrifices of sovereignty in procurement, planning, and industrial policy.

Instead, Europe is pursuing a policy of cognitive dissonance. It wants the benefits of NATO integration (American nuclear guarantee, leadership capability, intelligence, strategic lift) but without the dependencies. It wants European arms autonomy but without giving up national industrial policy. It wants strategic capability but without the institutional reforms that would enable it.

The result is predictable: rising defense budgets, fragmented procurement, a lack of economies of scale, and an arms industry that is neither truly European nor internationally competitive. Germany's special fund evaporates in bureaucracy. France's arms exports primarily go outside Europe because EU partners prefer to buy American or South Korean. Italy's defense spending is increasing, but the Italian army remains the least equipped major NATO force.

The irony is that true strategic autonomy requires exactly what European policy wants to avoid: deeper integration, more painful sacrifices of sovereignty, and—yes—closer cooperation with non-EU NATO partners, whose exclusion would weaken the entire alliance. Rutte's warning was not anti-European. It was a reminder that autonomy does not arise from exclusion but from capabilities. And capabilities do not emerge from political rhetoric but from institutional discipline, industrial consolidation, and the willingness to accept uncomfortable truths.

Europe has a choice: autonomy as a slogan or autonomy as a bill. The bill is higher than most are willing to admit. But it is the only one that can actually be paid.