Sam Seitz

Given the enormous success of the European Union’s efforts to create an integrated market and Brussels’s push for an “ever closer union,” why has the EU struggled to rationalize its member states military procurement programs? The rising costs of weapons and growing threat from Russia, coupled with significant uncertainty regarding American president Donald Trump’s commitment to NATO, would seem to serve as effective catalysts for action. Instead, most efforts to increase collaboration in European defense procurement have developed slowly and encountered significant obstacles. The reason is that economic efficiency is often not the primary driver behind the acquisition decisions of European countries. Instead, efforts to shore up domestic industry and ensure a degree of military autonomy often take precedence, leading states to pursue more expensive programs that provide benefits to industry and enhance military flexibility at the cost of efficiency. While these divergent priorities do not preclude the possibility of greater integration of the European defense market, they do suggest significant constraints on the speed and degree to which integration can occur.

Europe’s Fragmented Defense Market

Despite achieving significant progress in the creation of an almost fully integrated “Single Market,” the European Union has, at least until recently, been content to tolerate a fractured defense industry largely organized around national lines. Indeed, Article 346 of the Treaty of the European Union explicitly clarifies that “any Member State may take such measures as it considers necessary for the protection of the essential interests of its security which are connected with the production or trade in arms, munitions and war material.”[i] The result has been significant inefficiency both in market organization and in the force structures of EU member states. According to the European Commission’s 2016 European Defence Action Plan, “Around 80% of defence procurement is run on a purely national basis, leading to a costly duplication of military capabilities. The lack of cooperation between Member States in the field of defence and security is estimated to cost annually between EUR 25 billion and EUR 100 billion.”[ii] These statistics were highlighted by then-German Foreign Minister Sigmar Gabriel, who lamented that the EU spends 50% of US defense expenditures and is only 15% as efficient.[iii]

The consequence of this lack of coordination is significant duplication of efforts. One recent article strikingly illustrates an example of this phenomenon by noting that EU member states operate 154 major military platforms. In comparison, the US operates only 27 major platforms despite spending significantly more on its military forces.[iv] While purely illustrative, this disparity suggests that Europeans are squandering significant sums procuring national variants of systems that could be standardized across multiple countries. Cooperative procurement would seem to be particularly attractive in recent years given that military procurement costs continue to grow significantly above inflation while many European countries continue to struggle to revitalize their economies.[v] These budgetary pressures are compounded by growing personnel and administrative costs, which crowd out spending on procurement and sustainment. The result is the acquisition of ever fewer major weapons systems and the atrophying of the European defense industrial base.[vi]

Instead of catalyzing greater collaboration among EU member states, though, the growing threats and budgetary pressures of recent years have paradoxically corresponded with less collaboration in the development of weapons platforms. In 2008, only 11 of the 41 major European defense acquisition programs were collaborative, and no new collaborative defense projects were added during the next four years.[vii] A study of British, French, and German efforts observed that instead of pooling resources to develop new capabilities, the militaries of these three countries preferred to simply acquire cheaper “off the shelf” hardware.[viii] Indeed, defense spending data from the European Defense Agency show that the percentage of European defense spending dedicated to collaborative procurement and R&D efforts in 2017 (the most recent year for which data are available) was lower than in 2008: collaborative procurement dropped from 21.2% of total European procurement to 16.8%, and collaborative R&T spending fell from 16.5% of total European R&T to 9%.[ix]

The failure to coordinate and systematically fund and develop European capabilities has contributed to European militaries that lack significant capacity in important areas, such as strategic airlift and ISR, and that suffer from generally poor readiness levels. To assess the EU’s capacity to conduct so-called Petersberg Tasks – the basis for current EU security ambitions – such as peace enforcement operations, post-conflict stabilization, and humanitarian and rescue missions, the think tank IISS assessed several representative scenarios of potential contingencies that EU forces may face. The findings suggest that EU countries will struggle to execute all but evacuation and humanitarian support missions, and even these capabilities are in doubt if Brussels is forced to address multiple crises concurrently.[x] More importantly for this paper, the authors of the report note that “There are a number of capability areas that will remain problematic because there is, at this point, no identifiable procurement activity that would eliminate the shortfalls or compensate for the UK contribution.”[xi]

A related report, also from IISS, moves beyond the Petersberg Tasks to evaluate the ability of European NATO member states to defend themselves independently of the United States. The conclusion is similarly pessimistic. In order to reasonably assure victory against limited Russian aggression, the authors suggest that EU member states would have to increase defense spending by between USD 288 billion and USD 357 billion – approximately a doubling of current European defense spending.[xii] While European shortfalls manifest in a number of ways, one of the core issues is, again, deficient force structure and capabilities. “NATO’s European members between them possess some 100 armoured or mechanised brigades. However, around three-quarters of these are currently equipped with ageing or obsolescent tank, infantry-fighting vehicle or armoured-personnel-carrier designs. Those units and their equipment would be of questionable value in a collective-defence scenario,” notes the report.[xiii]

Of course, this scenario is perhaps a bit contrived. NATO exists precisely to ensure that European countries do not have to defend themselves without American support. But both this report and that assessing the EU’s ability to carry out “Petersberg Tasks” raise a broader question: why have efforts to rationalize and integrate defense procurement efforts continued to flounder? After all, it would seem that greater collaboration would serve to enhance EU solidarity, hedge against threats, and also undercut US criticism of European free-riding.

The answer to this question is multifaceted, but it ultimately derives from the fact that efficiency in the European defense market is far from the most important driver of European countries’ procurement decisions. Instead, acquisition choices are the result of a range of strategic and industrial considerations. Countries must balance military imperatives with political pressure to protect domestic industry. Military leaders must balance the need to collaborate with partners on platform development and interoperability with the requirement of ensuring that their national forces are balanced and sufficiently capable to act, in extremis, without the full backing of partner countries. Additionally, national force planners must weigh the advantages provided by collaborative procurement – such as lower prices through economies of scale – against the need to field platforms with the specific capabilities necessitated by the strategic requirements and doctrine of their individual countries.

The Economic Pitfalls of Procurement Collaboration

Industrial concerns manifest in two principal manners: industry protectionism and arms export policy. Protectionism exists in several forms. The first is the awarding of contracts via opaque, national rules that favor domestic suppliers. By devising complicated and poorly explained standards, in other words, national defense ministries have been able to tilt the scales in favor of domestic producers. And while the European Commission has implemented several initiatives to curtail this behavior, the aforementioned Article 346, which grants member states broad authority to protect national defense industries, has largely constrained the Commission’s efforts.[xiv] This is perhaps most obvious when one considers the history of the European Defence Agency (EDA).

Designed to both identify capacity shortfalls and provide limited funding to incentivize collaborative R&D and platform development, the EDA has achieved several notable successes in its attempts to catalyze greater defense collaboration. However, the EDA has a fairly limited mandate, primarily serving as a regulatory body to oversee and promote more integrated procurement efforts among member states. Consequently, its ability to actually punish member states for poor performance is constrained.[xv] In 2009, for example, the EU Commission issued a directive through the EDA mandating that member states make defense tenders and contracts publicly available in an effort to increase transparency and limit protectionist tendencies in procurement decisions. But this diktat has so far been largely ignored by member states, who publish only information related to low-end procurement and repair and maintenance expenses. The EU has responded by issuing letters of reprimand that remind states of their obligations, but this has achieved little.[xvi] And while EDA leaders recognize that their agency must act as a “transformational” body and not simply a “regulatory” bureaucracy, limited budgets have so far constrained their ability to significantly shape the European defense market.[xvii]

Even when states do engage in collaborative procurement, a range of inefficiencies present themselves. Perhaps the most significant is the demand for juste retour – work-sharing rules that divide production and manufacturing along political lines. Instead of dividing efforts to maximize comparative advantages, participating nations typically each demand a slice of the high technology work and production lines. Instead of eliminating duplication and redundancy, these projects simply recreate these drags on efficiencies through these byzantine production rules.[xviii] The result is higher development costs and reduced savings on unit production when compared to purely national programs (though the costs are allocated across a larger number of countries). For example, in two highly-touted collaborative projects – the Eurofighter Typhoon and A400M Transport – costs increased by 43% and 21%, respectively, and both experienced delays of two to four years.[xix] While cost overruns and delays are not unique to collaborative projects, a British government study concluded that approximately 40% of production delays in these two programs are attributable to the slow approval processes of partner nations.[xx]

Another source of friction is disagreements over arms exports. Six of the top twenty defense firms are European (including the UK), and the EU is the second largest arms exporter behind the United States, making arms exports an important component of national economies and foreign policy.[xxi] However, the EU has so far failed to create a meaningful, comprehensive arms export policy. While a legally binding Common Position on Arms Exports Policy – which includes criteria such as recipient states’ human rights records and support for international humanitarian law – is in force, implementation is left to individual member states. In practice, therefore, export policy is formulated and executed at the national level. This limits coordination among states and impedes Brussels’s efforts to incorporate arms sales into EU foreign policy.[xxii]

Disagreements over arms export policy also reduce states’ willingness to collaborate on new defense systems because multinational ventures may allow partner countries to veto exports. For example, France and Germany recently adopted strongly divergent positions on the export of arms to Saudi Arabia, with Berlin opting to halt exports over the war in Yemen and killing of Jamal Khashoggi while France continued to sell weapons to the kingdom. Their disagreement led to a major row and raised doubts about the ability of the two countries to collaborate on future weapons development, with French ambassador to Germany Anne-Marie Descotes warning that Germany’s position will “have serious consequences for our bilateral cooperation in the defense sector and the strengthening of European sovereignty.”[xxiii] Ultimately, a deal was reached that limits German veto power to systems in which at least 20% of components are of German origin.[xxiv] This certainly smooths over some of the impediments to cooperation, but in practice it also might serve to impose an artificial ceiling on integration, given that French firms now have an incentive to limit German contributions to 19% of inputs. This may undermine the success of future projects, like the proposed Franco-German next generation combat jet.[xxv]

But even if the Franco-German bilateral agreement succeeds, the lack of a coherent and enforceable EU-wide procurement policy will likely incentivize EU member states to look outward for potential customers instead of pursuing collaborative defense procurement projects among themselves. As one report puts it, “Because of the low level of defence spending in Europe, European defence firms rely heavily on exports to sustain themselves. As a result, European industries sometimes prioritise the capability needs of export customers over those of EU states.”[xxvi] This is unsurprising given that between 2014 and 2018 the vast majority of French, German, and British arms exports (90%, 73%, and 89%, respectively) were sold to countries outside of Europe.[xxvii]

Differing Requirements and Strategic Visions

The other major impediment to collaboration is differing military requirements and strategic orientation. Because no two countries face the exact same threats, even shared platforms often undergo slight modifications to account for unique national requirements. The Horizon­-class destroyer program serves as an excellent example. Initially envisioned as a collaborative procurement project between France, Britain, and Italy, divergent requirements led to significant difficulties. The UK wanted a large warship capable of extended range and payload, allowing the ship to operate autonomously around the North Atlantic. France and Italy, by contrast, desired a more “modest” vessel with reduced range and missile capacity, as their naval forces were primarily interested in a ship to patrol the Mediterranean and serve as a light fleet escort. Ultimately, these differences could not be bridged, and London decided to abandon the venture.[xxviii]

Similar challenges presented during Franco-Italian collaboration on the FREMM-class frigate. The divergent requirements of the two navies led France to demand a much more capable version of the warship than that required by Italy. The result was two distinct types of ship that shared a hull and propulsion system, but little else.[xxix] Divergent national requirements are not limited to the naval domain, as demonstrated by the development of the Panavia Tornado. Britain required an air defense version of the plane, resulting in the development of a lower-production variant known as the Tornado ADV.[xxx]

While differences in capability requirements are germane to the issue of incompatibility, so too are differences in strategic orientation. Stated differently, the broad defense objectives and foreign policies of European countries often differ quite substantially. The aforementioned arms export dispute is one example of non-aligned defense objectives, but the Libya intervention is perhaps more illustrative. While the intervention ultimately enjoyed broad support from most European countries, finding consensus was far from easy.[xxxi] Germany was particularly opposed to participating in the intervention, going so far as to withdraw all its naval assets from the Mediterranean to prevent them from becoming entangled in combat operations.[xxxii] Additional conflicts developed over command arrangements. France pushed for the operation to be conducted outside of NATO because Paris worried that a NATO-led intervention would be viewed as an example of US imperialism. Italy and Norway, by contrast, demanded NATO command because they felt the intervention would otherwise lack legitimacy.[xxxiii]

Given that these substantial policy differences existed even for a NATO mission with UN Security Council approval, one can understand why European countries may be reticent to become overly reliant upon each other. Why develop specialized, niche forces that are only effective when used in conjunction with allied forces when those same allies cannot be assuredly relied upon to offer support? Why make sustainable weapons procurement dependent on suppliers located in countries whose governments may prefer fundamentally different policies? These issues, of course, go far beyond simple efforts at collaborative procurement. Indeed, they are indicative of the lack of a coherent European vision for foreign and security policy.

As a recent ECFR report shows, buzzwords like “strategic autonomy” and “European Army” are controversial and contested.[xxxiv] This presents two challenges for greater defense procurement collaboration. First, it creates internal discord that is not suitable for developing a cohesive vision for Europe’s future security objectives and strategy. Examples of these disputes abound – perhaps most notable is the recent ruckus caused by French President Emmanuel Macron’s provocative comments regarding NATO.[xxxv] And as long as European countries cannot agree on a common vision for their security policy, it is difficult to believe that the many impediments to arms collaboration can be overcome.

Second, these internal disagreements erode faith in the credibility of EU security guarantees. Because of differing threat perceptions and political positions, many European countries, particularly those in the east, continue to highly value close defense ties with the US and prioritize NATO cohesion over any of the proposed EU defense initiatives.[xxxvi] They are especially reticent to undertake aggressive efforts toward European defense integration because they are aware of Washington’s concern that these initiatives may duplicate NATO functions and erode the value of the alliance. American concerns seem to be particularly acute under the Trump administration, as illustrated by US Permanent Representative to NATO Kay Bailey Hutchinson’s recent remark that “we do not want this [PESCO initiative] to be a protectionist vehicle for EU [sic].”[xxxvii]

Divergent threat perceptions seem likely to intensify as France and Germany publicly bicker over security policy[xxxviii] and Emmanuel Macron discounts Eastern European fears regarding Russia, instead choosing to prioritize the threat from terrorism.[xxxix] As long as a sizeable number of European countries trust Washington’s security guarantees over Brussels’s, significant progress in rationalizing European military procurement is unlikely to be realized. After all, EU defense integration would risk angering Washington, and that is a risk that countries like Poland simply cannot take.


It may seem puzzling that European countries have so far struggled to develop more efficient and collaborative approaches to military procurement. After all, rationalizing European military acquisitions would, at least in theory, offer significant savings and serve as a hedge against future threats and US abandonment. But these theoretical benefits face the stiff headwinds of practical national considerations. While countries value efficient and economical procurement programs, they also seek to ensure healthy domestic industry, the freedom to pursue independent export policies, and a set of military capabilities that meet their strategic and operational requirements. Unfortunately, these desires often conflict with efforts to rationalize defense through the pursuit of multinational platform development.

This does not mean that deeper European collaboration in military procurement is impossible. Indeed, the past few years have witnessed a bevy of initiatives designed to promote greater collaboration and enhance the capacity of the European defense industrial base. Moreover, bilateral programs like the Franco-German fighter continue to be proposed despite the difficulties encountered in previous programs like the A400M. But the significant impediments to collaborative procurement efforts do suggest that progress will likely be slow and limited, at least in the immediate future. This is not necessarily a negative development. For one, it will ensure that NATO remains the lynchpin of European and transatlantic security for the foreseeable future. For countries skeptical of ambitious defense efforts emanating from Brussels, this is surely good news. The slow progress also grants the US and NATO time to adapt to new European institutions and initiatives, minimizing duplication and disruption while simultaneously allowing both NATO and European defense organizations to productively complement each other.

The European Union may never fully achieve the strategic ambitions of those such as Emmanuel Macron, but that may be for the best. After all, exogenous shocks large enough to overcome the manifold barriers to cooperation identified above would likely suggest a significant worsening of Europe’s security environment. Nevertheless, to the extent that Brussels can methodically improve and rationalize the military capabilities and procurement policies of its constituent states, it can meaningfully enhance the security of Europe as well as strengthen the broader transatlantic partnership.





[i] Quoted in Matt Uttley and Benedict Wilkinson, “The Great Paradox of Defense,” in The Political Economy of Defence, ed. Ron Matthews (Cambridge, England: Cambridge University Press, 2019), 200.

[ii] European Defence Action Plan: Towards a European Defence Fund (Brussels, Belgium: European Commission, 2016).

[iii] “Can PESCO Provide a New European Identity?” Deutsche Welle, November 13, 2017,

[iv] Elisabeth Braw, “NATO’s Enormous Arms Clutter,” Foreign Affairs, March 1, 2017,

[v] Sophia Besch, “Security of supply in EU defence: Friends in need?” Centre for European Reform, August 17, 2016, p. 1,

[vi] Ibid.

[vii] Bastian Giegerich and Alexander Nicoll, “The Struggle for Value in European Defence,” Survival 54, no. 1 (2012), 69.

[viii] Ibid., 70.

[ix] Defence Data: 2008 (Brussel, Belgium: European Defence Agency, 2019), 15 and 17, and Defence Data: 2016-2017 (Brussel, Belgium: European Defence Agency, 2018), 15,

[x] Douglas Barrie, Ben Barry, Henry Boyd, Marie-Louise Chagnaud, Nick Childs, Bastian Giegerich, Christian Mölling, Torben Schütz, Protecting Europe: meeting the EU’s military level of ambition in the context of Brexit (London, UK: International Institute for Strategic Studies, 2018), 2.

[xi] Ibid., 35.

[xii] Douglas Barrie, Ben Barry, Lucie Béraud-Sudreau, Henry Boyd, Nick Childs, Bastian Giegerich, Defending Europe: scenario-based capability requirements for NATO’s European members (London, England: International Institute for Strategic Studies, 2019), 38.

[xiii] Ibid., 4.

[xiv] Kaija Schilde, The Political Economy of European Security (New York, N.Y.: Cambridge University Press, 2017).

[xv] Ibid., 190.

[xvi] Besch 2016, 2.

[xvii] Schilde, 190.

[xviii] Keith Hartley, “The Political Economy of Arms Collaboration,” in The Political Economy of Defence, ed. Ron Matthews (Cambridge, England: Cambridge University Press, 2019), 244-245.

[xix] Ibid., 247.

[xx] Ibid., 252.

[xxi] Data come from SIPRI’s Arms Transfers Database; Sophia Besch and Beth Oppenheim, “The EU needs an effective common arms export policy,” Centre for European Reform, June 4, 2019, p. 1,

[xxii] Besch and Oppenheim, 1.

[xxiii] “German export policies threaten European defense projects: French ambassador,” Deutsche Welle, March 26, 2019,

[xxiv] “Germany, France reach arms export deal,” Deutsche Welle, October 16, 2019,

[xxv] “Take-off: France & Germany begin project to build new fighter jets,” Euronews, September 2, 2019,

[xxvi] Besch and Oppenheim, 1-2.

[xxvii] Ibid., 2.

[xxviii] Jeremy Stöhs, The Decline of European Naval Forces (Annapolis, Md: Naval Institute Press, 2018), 82.

[xxix] Ibid., 84.

[xxx] Hartley, 250.

[xxxi] Patricia Weitsman, Waging War: Alliances, Coalitions, and Institutions of Interstate Violence (Palo Alto, CA: Stanford University Press, 2014), 179.

[xxxii] Jeremiah Gertler, “Operation Odyssey Dawn (Libya): Background and Issues for Congress,” Congressional Research Service, March 28, 2011, 16.

[xxxiii] Ibid.

[xxxiv] Ulrike Franke and Tara Varma, “INDEPENDENCE PLAY: EUROPE’S PURSUIT OF STRATEGIC AUTONOMY,” European Council on Foreign Relations, July 2019,

[xxxv] “Emmanuel Macron in his own words (English),” The Economist, November 7, 2019,

[xxxvi] Dave Lawler, “Calls for a European army meet resistance,” Axios, February 7, 2019,

[xxxvii] Aaron Mehta, “US warns against ‘protectionism’ with new EU defense agreement,” Defense News, February 14, 2018,

[xxxviii] Victor Mallet, Michael Peel, and Tobias Buck, “Merkel rejects Macron warning over Nato ‘brain death,’” Financial Times, November 7, 2019,

[xxxix] Helene Fouquet, “Macron Says NATO Should Shift Its Focus Away From Russia,” Bloomberg, November 28, 2019,