The European Union (EU) is grappling with increasing difficulties in funding its defence upgrades as security threats intensify and national budgets tighten. Since Russia’s invasion of Ukraine in February 2022, EU defence spending has surged, but logistical challenges and diverse national priorities continue to slow progress.

Defence Spending Rises Amid Security Concerns

EU defence expenditure has risen sharply in response to escalating security concerns. According to the European Defence Agency (EDA), EU-27 countries spent €326 billion on defence in 2024, accounting for 1.9% of their GDP— a 31% increase from 2021. However, logistical obstacles, such as factory construction delays and personnel training, have hindered the pace of upgrades.

Joint Efforts to Optimize Defence Costs

Collaborative efforts on arms production and procurement are seen as key strategies for reducing costs and increasing efficiency. Guntram Wolff from the Bruegel Institute underscores the importance of cooperation in areas like hypersonic missiles, drones, satellites, and air defence systems.

However, differing national defence priorities complicate cooperation. France, for instance, emphasizes nuclear deterrence, while other EU nations focus on either lightweight, mobile equipment or heavy artillery based on their strategic needs. These differences create a challenge for harmonizing defence policies.

A potential solution proposed to streamline funding is joint borrowing through Eurobonds. By pooling resources, the EU could secure cheaper loans for defence upgrades. However, fiscally conservative countries, such as Germany, remain hesitant about committing to shared borrowing initiatives.

Prioritizing European Suppliers: A Strategic Question

French President Emmanuel Macron advocates for increasing the use of European-made defence equipment to bolster strategic autonomy within the EU. While some EU nations support this strategy, others turn to non-European suppliers in an effort to reduce costs and speed up delivery times.

Philippe Perchoc of IRSEM Europe warns that reliance on external suppliers poses significant risks. He argues that in times of global instability, Europeans could lose priority access to critical military equipment, jeopardizing long-term security.

EU Defence Strategy: Limited but Crucial Role

Despite growing calls for greater coordination, defence remains primarily within the jurisdiction of individual EU member states. Achieving a unified European defence strategy will require careful balancing of national priorities with collective security goals.