European Unreadiness: The published EU rearmament strategy has exposed problems that are beyond the European Commission's powers to solve

The fragmentation of sovereignty and the integration of sovereignties

European leaders have spared no words in emphasising the historic significance of the current moment and the urgent need to improve Europe's defence capabilities. The EU’s High Representative for Foreign Affairs Kaja Kallas argues that this is ‘a turning point for European security,’ while European Commission chief Ursula von der Leyen insists that Europe should prepare for war to keep the peace.

The strategy unveiled by the European Commission in March, unprecedented in the history of the European community, is designed to serve the common goal of rearming and strengthening Europe. This strategy is outlined in two key documents: the ReArm Europe plan and the ‘European Defence Readiness 2030’ report. The primary focus of the ReArm Europe plan is to define the financing parameters and sources for this strategy. Over the next four years, €800 billion is expected to be spent, sourced from increased national defence expenditures of EU member states (€650 billion) and special pan-European SAFE (Security Action for Europe) borrowings. The second document sets out the framework for how these funds should be spent, as well as the regulatory changes necessary for the European defence market. A separate section of the report is dedicated to the ‘Porcupine Strategy’ – plans for arming and supporting Ukraine’s defence industry, which is expected to be integrated into the European defence sector in the future.

Rearming Europe and rebuilding its defence complex present a fundamentally new type of challenge for the European Union. While the first strategy for strengthening European defence, Strategic Compass was published in March 2022, the radically changed geopolitical landscape has introduced entirely new challenges. If that strategy was conceived as a means to support and expand NATO’s defensive shield over Europe, the current goal is to compensate for a potential decline in the significance of that shield amid a sharply increased external threat.

The European Union is a unique entity where sovereignty is distributed between national and supranational levels in economic and political spheres. In security and defence, sovereignty is also shared between two levels – NATO’s collective defence and national armies – which rely on domestic defence industries and procurement within national budgets. Now, an additional layer of supranational responsibility must be integrated into this structural triangle (national sovereignty – EU – NATO), requiring harmonisation with existing structures. As always, this will be anything but simple.

The national versus supranational dilemma

The first dilemma Europe faces is balancing national and collective European security perspectives. In response to heightened threats, European countries are primarily focusing on national security. Germany, Finland, Sweden, and Poland have already announced their own radical national defence reinforcement strategies and plan to allocate substantial resources. However, there is a risk that these large-scale national efforts, especially in states that now see themselves as frontline countries, will not be synchronised with broader European defence initiatives, weakening the overall effectiveness of collective security cooperation.

Former ECB head Mario Draghi highlighted this issue in his programme report ‘The Future of European Competitiveness’. Europe does not spend little on defence, yet EU nations lack the political will to pool resources for joint financing, procurement, maintenance, and modernisation of defence capabilities. The EU still lacks a centralised body to manage defence industry and security initiatives. However, the European Defence Readiness report does not address this problem. According to Carnegie Centre experts Sophia Besch and Eric Brown, the report sets too limited objectives, acting ‘as if the US elections haven’t happened yet,’ they remark wryly.

As Draghi pointed out, without a unified planning and procurement centre, Europe’s defence industry suffers from extreme fragmentation across almost all production sectors. This has become particularly evident on the battlefield in Ukraine, where European countries have supplied Kyiv with nearly ten different models of 155mm howitzers, causing significant logistical difficulties for the Ukrainian military. The United States, by contrast, consolidated its defence industry after the Cold War, reducing its industrial base from 51 major players to just five. Meanwhile, Europe continues to manufacture five different types of howitzers (compared to one in the U.S.), 12 types of main battle tanks (compared to one in the US), and many more redundant models of other weapons. By leaving rearmament strategy decisions largely to national governments, Europe risks facing increased lobbying from domestic defence industries and even greater strategic disorganisation.

Fragmentation is not the only issue. The European Commission’s proposed strategy ignores the real risks of further divergence from the US and the EU’s need for an independent collective defence system. Some of the challenges arising from these risks cannot be solved at the national level. For example, while the European Council has included air and missile defence, drone systems and cyber capabilities as priority defence projects, it has not specified how these collective European defence needs will be financed, who will coordinate the joint efforts, or how the integrated system will be managed. Bruegel experts have previously proposed treating the creation of a European air defence system as a European Public Good (EPG), allowing it to be financed at the EU level through Brussels. Similar mechanisms were used for the EU’s joint COVID-19 vaccine procurement and the Next Generation EU recovery initiative. However, the published strategy makes no mention of the EPG mechanism and fails to address this critical funding gap.

Thus, experts evaluating the strategy are dissatisfied with the low level of integration in European defence. They argue that the proposed approach does not align with the political moment, and specifically with the real risk of the US withdrawing from the Euro-Atlantic security system. However, some of the concerns raised by commentators clearly fall outside the European Commission’s jurisdiction.

The inequality dilemma

The second challenge – just as familiar as the debate over national sovereignty – is the gap between Europe’s strong, advanced economies and its weaker nations. For instance, the SAFE borrowing mechanism may seem like a promising universal solution at first glance. However, these loans would create a shared European debt that the entire EU would have to service. In reality, six European countries (Denmark, Germany, Liechtenstein, Luxembourg, the Netherlands, and Sweden) have higher credit ratings than the EU average, while the rest have lower ratings. This means the first group sees the mechanism as unfavorable, whereas for weaker economies, the increasing debt burden is problematic, with no guarantee that they will be able to service it in the future.

The same issue applies to the requirement to increase national defence spending, which is expected to account for €650 billion in additional military expenditures under the ReArm Europe plan. To accommodate this, the European Commission will allow member states to raise their budget deficit limits, capping only 1.5% of GDP in defence-related expenditures within existing restrictions, while exempting all other defence costs. However, financing this additional deficit through market instruments means that countries will increase their national debt. According to Bruegel experts, this poses additional risks for nations already burdened with significant debt. They warn that the security crisis triggered by the war in Ukraine could escalate into a financial crisis for economically unstable countries – a development that would, in turn, create problems for the EU as a whole.

Finally, countries with strong military capabilities and developed defence industries will have a greater incentive to shift defence efforts to the national level. This allows them to offset rising military expenditures by boosting domestic production, generating economic benefits. Meanwhile, weaker nations will only be able to make modest contributions to joint procurement funding, further exacerbating disparities in the EU's defence landscape.

The import dilemma

European Commission President Ursula von der Leyen,when presenting the European Defence Readiness report, urged EU nations to purchase more European-made weapons to strengthen Europe’s defence-technological and industrial base. Other European leaders, including French President Emmanuel Macron, also emphasise the importance of developing Europe’s own defence industry, which could drive broader economic growth. The EU's dependence on defence imports is indeed high. As Mario Draghi pointed out in his report, of the €75 billion that EU member states allocated to defence between June 2022 and June 2023, nearly 80% was spent on imported weaponry: 63% on orders from the US and a further 15% from non-EU countries. With this spending structure, Europe will remain dependent on the US, both militarily and politically, for the foreseeable future.

Developing Europe's defence industry is a crucial objective. However, the EU faces a third dilemma in its rearmament strategy. If the goal is to rapidly achieve military readiness amid a potential weakening of NATO and diverging political priorities between Europe and the US (especially concerning Ukraine), then there simply isn’t enough time to build an independent military-industrial base. After decades of underfunding, even significant investments will not solve the problem of strengthening defence capabilities in the short term, notes Jakub Janda, director of the Centre for European Values in Security Policy. Europe lacks the necessary industrial capacity, and addressing this issue will take at least three to seven years.

Given this timeline, the immediate priority is to fill defence gaps through external arms procurement, which is also critical in ensuring military aid to Ukraine, especially if US assistance ceases (→ Re:Russia: The Price of the Moment).

However, the proposed rearmament strategy restricts the use of funds for purchasing weapons from outside the EU. For example, spending under the SAFE mechanism is limited to EU countries, members of the European Free Trade Association (Norway, Switzerland, Iceland, Liechtenstein), EU candidate states (including Ukraine and Turkey), and nations with EU defence and security partnership agreements (such as Moldova, South Korea, Japan, Albania, and North Macedonia). Moreover, weapons procured under this scheme must come from companies ‘established and headquartered’ in the EU, EEA, EFTA, or Ukraine, with at least 65% of their components being of European origin.

Interestingly, at the national level, some European countries prioritise rapid military reinforcement through imports, even replacing American supplies. For instance, as an alternative to HIMARS, Poland purchased 288 South Korean K239 Chunmoo multiple rocket launchers, while Spain, Germany and the Netherlands acquired Israeli PULS rocket artillery systems with a range of up to 300 kilometres, says Lotje Boswinkel, a researcher at the Centre for Security Studies at the Free University of Brussels, in a commentary for War on the Rocks.

South Korea is emerging as a key arms supplier to Europe in other categories as well, says military expert Sébastien Roblin in a commentary for Breaking Defence. Poland, feeling like a frontline state, has particularly embraced this shift. In December 2022, it began receiving 180 Hyundai K2 Black Panther tanks, with plans to manufacture an additional 820 under license. Poland chose K2 tanks over German Leopards because South Korea's delivery speed is 15 times faster and the tanks are significantly cheaper. Warsaw also purchased 672 K9 self-propelled howitzers and 48 FA-50 light fighters,and plans to build a major maintenance and parts production centre for Korean military equipment. This could further boost Korean arms sales to Scandinavia, Eastern Europe, and the Baltic states.

Another potential avenue for rapid military enhancement is deeper cooperation with Turkey (→ Re:Russia: Two Approaches) and Israel. However, working with these partners – as well as South Korea – will require adjustments to procurement rules and collaboration frameworks. Additionally, the UK remains a critical partner in Europe's rearmament and security. While European Defence Readiness mentions this strategic relationship in passing, it fails to outline any concrete mechanisms for cooperation.

Finally, reducing European purchases of US military equipment presents a serious political, military, and technological challenge. Dependence on American supplies has ‘deep roots,’ says Pieter Wezeman, an expert at the Stockholm International Peace Research Institute (SIPRI). After World War II, there were no alternatives, and later, European governments saw expensive US weapons as a trade-off for America's military spending and security commitments. For many types of weapons and ammunition, Europe remains unable to overcome this dependency, agrees Boswinkel. Moreover, US procurement processes are often more predictable than European ones. In February, the Dutch Ministry of Defence announced plans to acquire US-made Tomahawk sea-based missiles, choosing them over French (Missile de Croisière Naval) and British-French (FC/ASW) alternatives, citing concerns over range, interoperability, and development timelines.

Import restrictions align with the EU’s long-term goal of building a robust European defence sector, but contradict the immediate need for political autonomy and compensation for weakening US security guarantees amid rising threats. These regulatory limits also reduce the competitiveness of European military production, a consequence that is already becoming apparent. Ultimately, however, the EU’s March 2024 rearmament strategy documents should be seen as merely a first step, highlighting its potential conflicts, contradictions, and unresolved issues. More critically, the strategy's core challenge may be that many of the key defence questions European governments now face extend beyond the European Commission’s current mandate. Addressing them would require delegating new powers – powers that, until now, have only been granted within NATO’s framework.