Russia’s war in Ukraine and demands from US president Donald Trump has accelerated European defence spending. But they have also underscored a stubborn problem: the bloc’s struggle to convert resources into military capability.
To bridge the gap, the European Commission wants to create one of the largest global defence markets by 2030. Brussels argues that a more integrated EU-wide market would reduce costs, curb fragmentation and allow Europe to rearm more efficiently.
In practice, however, progress remains slow as defence procurement is shaped by divergent threat perceptions, entrenched national interest and governments’ reluctance to surrender control of strategic decisions.
“If there were a clear political commitment at national level to back the shared level of ambition agreed in Brussels, we could address most of the existing economic and regulatory obstacles,” Ionela Maria Ciolan, researcher at the Wilfried Martens Centre for European Studies, told The Parliament.
While Brussels frames market integration as a technical fix, the debate over defence cooperation is fundamentally political, pitting advocates of a single market against supporters of voluntary coordination.
Why Europe’s defence spending fails to deliver
Although Russia’s war economy accounts for only around one-tenth of the combined defence spending of the EU’s 27 members, Europe’s financial weight has yet to translate into comparable military power.
Market fragmentation, duplication of systems, limited joint production, and divergent national export control regimes continue to undermine the bloc’s industrial potential.
“The EU continues to operate a patchwork of national industries, overlapping weapons systems, and divergent procurement strategies,” a recent analysis by the London School of Economics (LSE) notes.
The contrast with the United States is striking. Washington operates around 30 major weapons systems, while EU capitals collectively rely on more than 170. The result is higher unit costs, fewer economies of scale, and persistent interoperability gaps.
For European institutions advocating a single defence market, the case is clear. Greater competition would push down prices encourage member states to aggregate demand and make procurement more efficient. According to an analysis by the European Parliamentary Research Service (EPRS), a fully integrated market could save member states up to €60–75 billion per year.
Yet political hurdles abound. Defence remains a core national responsibility and marker of identity, with direct implications for industrial policy, jobs, budgetary priorities and international alliances.
“Governments continue to prioritise protecting domestic defence champions, preserving employment, and retaining sovereign technological capabilities, even at the cost of efficiency,” the LSE report states.
Recent coordination efforts, from delivering 155mm artillery shells to Ukraine to expanding EU joint procurement through up to €150 billion in soft loans, have not fundamentally changed this dynamic.
Defence procurement is also rarely guided by purely economics alone, as governments may opt for less advanced or more expensive systems for political or strategic reasons.
“For many member states, particularly in the East, buying American defence systems has been seen not just as a procurement choice, but as a way to reinforce the US security commitment [within NATO],” Ciolan argued.
To move closer to a single market for defence products, European Policy Centre (EPC) researcher Paul Taylor said Brussels would need to back harmonisation with real incentives, encouraging countries to align their defence specifications and certifications, or at least mutual recognition. One way to do this, Taylor said, would be a large EU defence equipment fund, linked to rules requiring beneficiaries to run open, competitive tenders under common conditions. But even then, he added, a genuine single defence market remains far off.
Ciolan also pointed to diverging threat perceptions across the EU-27 as a structural barrier to deeper integration. “Countries on the Eastern flank prioritise deterrence against Russia and sustained support for Ukraine, while several southern member states focus more on instability in their neighbourhood,” she said, referring to irregular migration and climate change.
The case for voluntary cooperation
Against that backdrop, other stakeholders, particularly within the defence industry, promote a more cautious approach.
“Rather than forcing a single defence market, Europe should develop an intergovernmental defence market built on voluntary cooperation, supported by stronger coordination at EU level,” MEP Christophe Gomart (France/European People's Party) wrote in an op-ed for The Parliament.
Gomart argued that voluntary cooperation would foster mobility, standardisation and mutualisation while reducing fragmentation without erasing national sovereignties.
However, over the past decade, efforts to harmonise procurement rules and incentivise joint capability development have delivered only modest results.
Taylor said this is partly because participating member states insist on tailoring common platforms to national requirements. "That erodes efficiency gains and leads to delays and frustration."
High-profile programmes such as the Airbus A400M military transport aircraft and the KMW Boxer armoured vehicle illustrate how divergent specifications and industrial rivalries can undermine joint projects.
As a result, EU policy is increasingly converging mixed approach that blends elements of both models. This includes coordinated demand, regulatory simplification, cross-border industrial integration and incentives for joint procurement.
“If we look at how European defence policy is evolving, and at the rationale and objectives of the strategic documents coming out of Brussels, there is a clear preference for this hybrid approach,” Ciolan said.
Slowly moving towards more EU cooperation
“There won’t be a single market for defence in 2030 or even 2040,” Taylor said.“ At best, we will see more joint procurement and production to common specifications and with common or mutually recognised testing and evaluation.”
Still, some observers see grounds for cautious optimism. Ciolan argued that recent developments are laying the foundations for deeper cooperation.
“One of the most significant breakthroughs is the emergence of a shared understanding of common capability priorities, as reflected in the Defence Readiness Roadmap,” she said.
Earlier this year, the European Commission set out, for the first time, clear objectives and milestones to achieve defence readiness by 2030. The move signals growing convergence among member states on which capabilities should be developed, produced, and procured collectively.
Combined with financial tools such as SAFE, this emerging consensus could accelerate joint procurement and strengthen a “Made in Europe” approach to defence capabilities, Ciolan said.
“Over time, this shift has the potential to provide a real boost to the gradual construction of a more integrated European defence market.”
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