Ben Schreer
Since Russia’s full-scale invasion of Ukraine in February 2022, European powers have rushed to increase their defence spending to reduce their military-capability gaps, brought about by decades of underinvestment in the armed forces and the defence-industrial base. In doing so, they appear to have relied primarily on non-European suppliers. That was a conclusion of the September 2024 report by former Italian Prime Minister Mario Draghi for the EU Commission on Europe’s competitiveness, including in defence-industrial terms. His report led to a much-cited assessment that ‘between June 2022 and June 2023, 78% of procurement spending went to non-EU suppliers, out of which 63% went to the US’. The message picked up by politicians and the European defence industry has been that too little of the uplift in European funding is being spent in Europe.
However, there are good reasons for a reassessment of these figures. The figures were first published in a September 2023 policy paper by the French think tank IRIS. They were then referenced in a March 2024 EU Commission report on Europe’s defence-industrial strategy, before finding their way into the Draghi report. However, while the IRIS paper provides a good assessment of some of the challenges for Europe’s defence-industrial base, it omitted, for instance, domestic sales.
In contrast, new research by the International Institute for Strategic Studies (IISS) tells a more positive story for European defence suppliers and the defence-industrial base. Indeed, in a forthcoming IISS dossier on building European defence capability, which will be launched at our upcoming IISS Prague Defence Summit in November 2024, we estimate European procurement to be significantly higher.
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