European Centre for Counterterrorism and Intelligence Studies, Germany & Netherlands – ECCI
Europe steps up its defence
iiss.org – Amid transatlantic uncertainty and geopolitical insecurity, European states are taking steps to bolster their defence. But their efforts will face fiscal and political constraints.
As European nations prepare for a new United States president, they know that an inflection in US foreign policy is coming: the question is its nature and its speed. In President Joe Biden, Europe has benefitted from an American leader steeped in the traditions of the NATO Alliance and the centrality of European security. European governments recognise they now need to do more to preserve the Alliance and to ensure their own security.
Strengthening the European pillar of NATO
As European leaders fret over the reliability and durability of the US security commitment to Europe, they are seeking to bolster their collective commitments to NATO, rather than search for alternatives. Their strategy is to strengthen the European pillar of NATO.
At least in spending terms, an increasing European commitment is already underway. European NATO members now account for 34% of NATO’s military spend, up from just 26% in 2014. Whereas in 2014 only two European NATO members spent 2% or more of their GDP on defence, and only nine did in 2023, in 2024 22 are likely to be at or above this threshold.
These facts are important for Europeans seeking to counter Republican claims that Europe will never ‘step up’ while the US continues to shoulder the burden for its defence. After all, those making such arguments in the US are not advocating that their forces should not play a critical role in the event of a Russian attack on NATO, but rather that the bulk of the readiness for such an eventuality should be provided by the continent facing attack and whose collective capabilities ought to match those of the US.
There are other ways in which Europeans are slowly starting to show themselves to be better partners. At the NATO summit in July, the US and Germany announced an agreement that, from 2026, long-range US missiles would for the first time since the Cold War be deployed periodically in Germany.
On 11 July, France, Germany, Italy and Poland signed a Memorandum of Understanding on a European long-range strike-missile initiative aimed at boosting European deterrence in the sub-strategic non-nuclear domain. This reflects broader European intent to ramp up long-range strike capabilities. In June, Germany and Norway announced the development of a new supersonic long-range ship-based cruise missile.
European voices within NATO’s nuclear bodies that are supportive of this trend have been helpfully strengthened by Sweden and Finland joining the Alliance and the Netherlands confirming in June that its F-35 stealth fighters would take over its NATO nuclear-strike role. The introduction of a fifth-generation nuclear-capable stealth fighter in Europe is a significant enhancement to European and NATO deterrence.
Germany’s decision permanently to station a combat brigade in Lithuania faces domestic and logistical challenges, but sends an important signal of commitment. This was further strengthened in June by Germany’s order, by 2027, for 105 Leopard 2A8 tanks, some of which will be deployed with this brigade, to bolster deterrence on NATO’s eastern front.
A July 2024 implementation report on the EU’s 2023 Act in Support of Ammunition Production (ASAP) highlighted the 31 projects now underway that will substantially boost EU production capacity of artillery shells and missiles. This includes increasing annual production capacity by more than 10,000 tonnes of powder and by 4,300 tonnes of explosives, both of which have been key bottlenecks for ramping up the provision of 155mm artillery ammunition for Ukraine.
European rearmament is not without its challenges. Continued deficits in European defence collaboration mean that increases in finance do not translate into comparable increases in capability. Despite a 2017 commitment to allocate at least 35% of EU equipment spending to collaborative equipment purchases, only around 18% of EU equipment spending was spent in this way in 2022. Furthermore, the trajectory and speed of European rearmament lags behind that engineered by the US, and is considerably slower than what Ukraine needs from its European partners.
The focus on European capabilities within NATO is also sparking some misguided concern across the Atlantic. Indeed, US ambivalence towards this focus could be seen in July’s summit statement, which notably lacked any reference to European or EU contributions to transatlantic support for Ukraine. Tensions are also likely to grow over the degree to which increased EU funding aimed at supporting EU rearmament and replenishment of its defence-industrial base should be spent within the EU. According to European Commission figures, between February 2022 and June 2023 78% of defence acquisitions by EU countries went to non-EU manufacturers (the US alone accounts for 63%). These percentages will likely shrink in the years ahead, as Europeans look to invest more in their own defence industries (and as the US continues to prioritise its own defence-industrial interests).
A more engaged EU leadership
On 17 July, the EU agreed its new senior-leadership team for the next five years. Ursula von der Leyen was confirmed for a second term by the European Parliament as European Commission president, alongside EU High Representative for Foreign Affairs and Security Policy and Vice-President Kaja Kallas and European Council President António Costa. This is an unusually strong line-up.
Echoing her call five years ago for a ‘geopolitical union’, in her bid for a second term von der Leyen called for a ‘true European Defence Union’ and promised to appoint a dedicated commissioner for defence. She has been clear about the scale of the challenge and its urgency. The next five years, she argued, will determine Europe’s place in the world for the next five decades. Her commission has committed to present a white paper on the future of European defence in its first 100 days, while pushing forward a number of flagship projects, including a European Air Shield and greater investment in European cyber-defence capabilities.
The first defence commissioner will find themselves with limited political room for manoeuvre and limited funds, at least until the EU’s new budgetary cycle of 2027–34, so the immediate impact of the appointment might yet underwhelm. But EU capabilities have often been developed in the past by first creating institutional momentum, which is later filled by policy substance.
As always, the EU’s leadership can be readily undermined by its member states. This is as true for the management of China’s strategic challenge as it is for defence, which remains a national prerogative and where the pooling of resources will always be controversial. Meanwhile, although far-right political parties did not do as well in the recent European Parliament elections as many had feared, the increased presence of anti-establishment and populist parties from across the political spectrum in the parliament will undoubtedly make legislating harder. Furthermore, Hungary’s six-month presidency of the European Council, which began in July, means that little progress on key briefs is expected this year.
Continued constraints on delivery
Even as European states become more serious in their collective ambitions, good intentions will continue to fall short. Progress on strengthening the European pillar of NATO and the EU’s leadership on defence will be undermined by the state of both public finances and public opinion in many European countries. Germany’s Zeitenwende (‘turning point’) may prove a good example, with Germany projected to meet its 2% of GDP defence-spending commitment for the first time in 2024 only thanks to a special budget that expires in 2025. Financial uncertainty risks undermining defence-industry investments that governments wish to encourage.
In the coming months, announcements of new European-defence ambitions, projects and even occasionally money will continue to flow. But the risk remains that in a contested fiscal environment, with constrained public support, defence is wrongly identified as an adjustable variable. No European partner will be more acutely aware of this danger than Ukraine.
