Expanded Military Budgets Spark Debate Among European Nations Regarding Allocations
Europe is embarking on a decade-long arms spending spree to modernize and enhance its military capabilities. This strategic shift is aimed at strengthening the continent's domestic industrial base while gradually reducing reliance on U.S.-made equipment.
Two significant European initiatives, the Security Action for Europe (SAFE) program and the European Defense Investment Programme (EDIP), are designed to boost European defense production, promote collaborative programs, and ensure that by 2030, at least 50% of military procurement will come from European industry.
However, despite these efforts, European defense industries still face substantial capacity and supply chain constraints. As a result, reliance on U.S. technology and systems remains significant. Key U.S.-made systems such as HIMARS missiles, AMRAAM air-to-air missiles, Patriot missile defense systems, and F-35 fighter jets continue to be critical for European defense capabilities.
The current trend is towards more partnerships and integration between U.S. firms and European companies, where American technology is combined with European assembly, integration, or enhancement. This approach allows European countries to leverage U.S. technology while investing in their domestic defense industries.
Poland, for instance, has more than doubled its military budget in just five years and has joined Germany in the Future Combat Air System (FCAS) next-generation fighter jet project, a European alternative to foreign options, particularly those produced in the US. However, Poland has been more wary of big-ticket European defense projects while maintaining deep ties to US defense contractors.
The price of NATO-standard 155mm artillery shells has quadrupled, from around €2,000 before the war to about €8,000 recently. To address this, Poland has purchased second-hand vehicles worth €2.24 billion as part of its bid to modernise the military.
Meanwhile, some European countries, such as France and Spain, have generally avoided buying US-made weaponry and are advocating for a robust European defense industry as an essential security priority. Spain's Prime Minister Pedro Sanchez, for example, rejected NATO's new GDP-based targets, arguing that Spain could deliver the required military capabilities while spending significantly less.
The NATO spending commitments allow each ally to decide what specific weapons to buy and from whom. As a result, European countries are splitting along a spectrum, with some favoring US-made systems and others insisting on buying European. The high price tags of US-made systems like the F-35 fighter jet and Patriot air-defence batteries can help governments meet NATO's spending targets quickly. However, European alternatives, such as the Franco-Italian SAMP/T battery and Aster 30 missiles, are around a third cheaper.
This strategic shift is not just about improving strategic autonomy and security but also leveraging defense spending as an economic multiplier. Increased European production is expected to produce higher economic returns from defense spending and enhance Europe’s strategic autonomy over time.
In essence, Europe is balancing the need to build a resilient, competitive defense industrial base with the practical necessity of U.S. technology reliance during the transition period. This approach is expected to result in an annual increase of nearly €270 billion for the 23 EU members of NATO, as they invest primarily in the defense industry and military recruitment.
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