A European defence industrial strategy in a hostile world - Executive summary

Table of Contents

• 1 Introduction 2
• Even in a scenario of a settlement with Ukraine Russias military build-up will accelerate as the loss of weapon systems on the battlefield declines 2
• Figure 1 Defence spending in the EU left scale and spending on military equip- ment right scale of GDP 3
• Figure 2 NATO members defence and equipment spending 2014 vs 2024 of national GDP and of total defence expenditure grouped by NATO commitments met 3
• 2 The cost of no EU single market 4
• Figure 3 Military spending 2023 billions nominal and military purchasing power parity adjusted 5
• Table 1 Estimated costs for third-generation main battle tanks in four countries 5
• Table 2 Estimated costs for 155mm self-propelled howitzers selected countries 6
• Figure 4 Self-propelled howitzer cost per unit and production annual capacity 6
• 3 Conceptualising European defence industrial policy 7
• 3.1 An overview of the EUs conceptual approach to defence industrial policy 7
• Figure 5 Conceptualising defencemilitary industrial policy 7
• Figure 6 Timeline of EU defence initiatives 8
• Box 1 An overview on EU defence initiatives and structures 9
• 3.2 European preference 9
• 4 The European defence sector 10
• 4.1 Comparing market values of European defence companies 10
• Table 3 Global top 10 and European top 10 defence companies by turnover 2022 11
• Figure 7 Stock price evolution of major global and European defence companies 12
• 4.2 Pan-European projects as a way of scaling up 12
• Box 2 Examples of defence joint ventures 12
• Box 3 Industrial policy and long-term needs European defence to foster innovation 13
• Figure 8 Public RD spending on defence of total public RD expenditure major developed economies 14
• 5 A European approach to increase military equipment output at reasonable costs 14
• The most important factor in successfully implementing the second approach market integration is thus trust among EU countries 15
• 6 Conclusions 16
• A Focus on funding for defence 16
• B Push back against economic nationalism while addressing security concerns 16
• Expensive investments with EU- wide impact such as air defence could be financed through EU debt 16
• C Towards intelligent European preference for more innovation and strategic autonomy 17
• D Supply chain security 17
• Despite being a global standard-setter the EU plays no role in standards for weapons 17
• References 18