Just a few months into 2026, Europe has already been caught off guard by a series of major geopolitical shocks.
It was a helpless bystander during Donald Trump's attack on Venezuela, was unprepared for U.S. threats to annex Greenland and got sidelined in peace talks between Ukraine and Russia.
Meanwhile, in conflicts in Iran and Lebanon, European leaders again appear to lack influence, as others shape escalation and control of critical routes such as the Strait of Hormuz.
These crises affect European citizens through energy prices, migration and security risks. Despite being the world's second-largest economy, Europe struggles to exert influence. Decisions about Europe are increasingly made without it.
Part of the problem lies in the European Union's own decision-making system. Processes remain slow, fragmented and vulnerable to obstruction, even after the electoral defeat of former Hungarian Prime Minister Viktor Orbán, long seen as a central source of obstruction.
Beyond institutional constraints, a deeper challenge lies in Europe's limited ability to deter, defend and act.
This article is part of the The Parliament's special policy report "Unlocking investment for EU competitiveness."
Fragmented defense
The issue is not a lack of potential. The EU's economy far exceeds Russia. It has the talent, innovation and infrastructure to succeed.
In defense, however, Europe has failed to translate this strength into capability. By keeping defense largely outside of European integration, particularly the single market, it has allowed fragmentation, inefficiency and dependence to persist.
The consequences are clear. Politically, Europe is excluded from key negotiations.
Militarily, its own forces and Ukraine face shortages and delays in equipment, including air defense systems and ammunition. Financially, fragmented procurement drives costs up by as much as 30%, failing to exploit economies of scale, according to a report by former Finnish President Sauli Niinistö.
At a time when European families are already struggling to make ends meet, this is an unacceptable inefficiency in public procurement.
Five steps to defense single market
This situation is inefficient, strategically unsustainable and democratically unacceptable. The EU needs a genuine single market for defense. The European Parliament has kicked off this process by adopting an initiative report that sets out a roadmap toward a genuine European single market, based on five key pillars.
First, "Buy European" must become the default in defense procurement. In a world where dependencies are weaponized and production capabilities are scarce, public spending should primarily strengthen domestic industry, create jobs and build capacity.
Second, procurement rules must be modernized to keep pace with technological change. Frameworks should enable, not hinder, joint projects and innovation. This requires innovation-driven competition and phased selection processes, as many solutions are often unknown at the time of contract award.
Third, internal barriers to defense cooperation must be removed.
Military equipment should move across borders as easily as civilian goods. Mutual recognition of certifications and streamlined transfers are essential. The defense readiness omnibus can deliver initial simplifications, including extending the general transfer license regime to allow certain exports without separate national approvals.
Fourth, Europe needs stronger funding mechanisms for defense innovation. Promising technologies often fail to scale, leading to reliance on external actors. The European Commission's proposed program for agile and rapid defense innovation may be a useful starting point, but it requires sustained ambition.
Finally, an EU-NATO cooperation agreement is necessary to ensure NATO technical standards are applied across member states. Even similar European weapon systems may lack interoperability due to inconsistent requirements — a costly and dangerous gap, as lessons from Ukraine show.
Fragmentation in defense is no longer just inefficient, but risky.
Europe can remain reactive while others shape its future. Or it can act decisively, leverage its economic strength and achieve real strategic autonomy.
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