28 December 2024

Europe and the United States need to revolutionize their defense industrial bases—and how they cooperate

Rob Murray

The impact of transatlantic defense industrial base relations has been affected by the entanglement of national security with economic stability, environmental sustainability, and rapid advancements in emerging technologies—putting NATO and its members on a back foot in the race to dominate the future battlespace in the face of mounting aggression from near-peer competitors.1 Put simply, allies need to harness and combine lethality, market power, and green power.

Navigating the complexities of twenty-first-century geopolitics requires a modern vision for transatlantic defense industrial base cooperation. This report articulates such a vision, outlining a set of policy recommendations for bold steps the United States and its allies should take. Recommendations include the establishment of a Global Resilience Bank for pioneering deep technology sectors,2 the creation of multilateral defense innovation districts, the conceptualization of a common defense digital currency, as well as establishing a transatlantic climate-neutral defense initiative. The goal of such ideas is to catalyze a redefined cooperative structure that adeptly navigates the realities of both the current and future geopolitical environments, thus helping to realign those strategic objectives of NATO allies and to reinforce collective security and prosperity through the defense industrial base.

As NATO and EU nations deliberate these challenges, they should consider the recommendations found in this report through the wider context of the Alliance’s Defense Production Action Plan, the European Defense Industrial Strategy (EDIS), and the growing realization that NATO’s industrial base now needs to be put on a war footing to genuinely support allied deterrence measures.3

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