analysis
Europe wants to upgrade, but that is not easy after years of carelessness under the protection of the United States. According to experts, the EU must work more closely together in armaments projects in order to better protect itself.
The approach of US President Donald Trump to Russia, his statements about Ukraine and the EU have made it clear to many observers again: Europe has obviously rested under the United States military protective shield for too long, and the EU member states have done too little for their own defense ability.
That should change. The expected coalition partners CDU/CSU and SPD have agreed to relax the debt brake in order to massively increase defense spending. EU Commission President Ursula von der Leyen presented a “plan for the recovery of Europe” on Tuesday. In total, Europe can mobilize “almost 800 billion euros”.
Too strongly set to “national champions”
A heart of the EU strategy is to create synergy effects of the European armaments industry and to initiate more common defense projects. Overall, Europe's defense industry is not only relatively small, but also fragmented and therefore not very efficient.
Above all, this has one cause. “So far, the national authorities of Europe have mainly supported their own champions and promoted local added value,” said Christian Cohrs, analyst for armor at MM Warburg, opposite tagesschau.de.
“Wild growth on systems”
Say: Each country orders its own tanks, aircraft, drones and Co. with its own requirements. This is expensive and complex. This is also evident in one number: Europe currently has around 150 weapons systems, the USA only a few, says Cohrs: “Europe has to agree on systems here.” This is essential for the training of the armed forces, maintenance and spare parts procurement. “The larger the wild growth of systems, the more inefficient they are.”
In addition, according to the analyst, parallel developments would have to be avoided: “Some projects are too big and too expensive.” It is not about dependence on only one provider, but about bundle many different powers, says Cohrs. This is currently evident in fighter jet projects.
Joint development of a fighter jet
Bae, Europe's number one armaments company, works, for example, with the Italian armaments group Leonardo as Europe's third largest player and the Japanese Mitsubishi Heavy Industries. Here the companies could also work with Airbus.
According to BaE, your program “Global Combat Air” is similar to that of Airbus and Dassault Aviation called “Future Combat Air System” (FCAS). Both rely on drones without adapting, surrounded the manned fighter jets with pilots. Airbus had also agreed to cooperate. That would be cheaper and would be faster. “It depends a little on the willingness of our governments to cooperate,” said Bae boss Charles Woodburn recently.
More large orders – lower costs
If Europe coordinates its defense better, it would help save a lot of money. According to Guntram Wolff, Professor of Economics at Solvay Brussels School, and Aleksandr Burilkov, political scientist from the Leuphana University of Lüneburg, 1,400 tanks, 2,000 rifle tanks and 700 artillery shooters are required. “The costs could be reduced considerably if the procurement was bundled and more competition was introduced.” It must be produced with a single standard and large orders as part of many smaller.
The experts provide an example. Germany has ordered a total of 105 Leopard II tanks for its own use at a unit price of 28 million euros since February 2022. If Europe would order 1,400 tanks together, the unit prices should decrease significantly. Large orders make the productions more efficient, unit prices are falling.
US corporations in particular dominate globally
More large orders could also strengthen Europe's armaments companies – and reduce the dependence on the USA. So far, few companies have dominated the world market, primarily from the United States. The first European armaments company ranks 6th: the British company BAE Systems with an annual turnover of around $ 27 billion.
For comparison: Worldwide number 1, Lockheed Martin from the USA, converts more than twice as much with $ 65 billion, followed by Raytheon Technologies with 37 billion. Bae builds combat tanks and aircraft, warships and drones. In Europe, in addition to BAE, Airbus (Franco-German), Leonardo (Italian), Thales (French) and Rheinmetall (German) are primarily the dominant companies.
But there are already examples of where cooperation in Europe works. Airbus, Bae and Leonardo have been building the Eurofighter together for years. The fighter plane has been manufactured in series since 2003 – currently the fourth generation. It was only at the end of the year Italy (24 machines) and Spain (25) new fighters. Turkey wants to acquire 40 Eurofighter – it is a renaissance of the jets. However, Lockheed Martin's planes are top dogs.
The United States are the largest military power in the world. The United States had 800 billion dollars in 2023 for its defense, as the annual report of the Stockholm International Peace Research Institute (SIPRI) shows. This year it should be at least 900 billion. After all, Europe combined $ 569 billion. According to Sipri, Europeans have already increased the expenditure on defense by 62 percent since 2014. Europe's budget for defense is therefore not as small as it is sometimes thought – despite long investments in international comparison.
In the future, Europe's defense spending will probably increase significantly. Scientists have calculated: If the United States, who have currently put the Ukraine aids on hold, were now completely left to their defense to the Europeans, the EU would need to doubling defense spending to at least 250 billion euros a year in the coming years. This is the result of the experts Guntram Wolff and Aleksandr Burilkov in a study by the Kiel Institute for the World Economy. Other researchers operate with similarly high numbers.
New jobs in the Armaments
In the opinion of experts, the increased defense spending also had positive economic effects. “An increase in defense spending to three percent means another 65 billion euros in additional expenses annually and creates or secures additional 660,000 jobs in Europe,” says a study by the consulting company EY with the Dekankank. Increasing European defense spending would particularly benefit companies in the EU.
