The European Defence Industry Is Running Late. The Weaponry Must Be Urgently Replenished and Upgraded

Blogs   |  01.11. 2022

The EU member states have already provided Ukraine with massive military support. For some countries, including the Czech Republic, this was also the opportunity to scrap their obsolete stockpiles of Soviet-era arms and replace them with up-to-date weaponry.

As highlighted in the analysis of the defence underinvestment published in May 2022 by the European Commission in cooperation with the European Defence Agency, it is essential to replenish and upgrade Europe’s military stocks, which had been totally inadequate for Europe’s defence capability before the war.

An undersized defence industry

The EU and its European Defence Agency started offering VAT rebates as early as in 2015 to encourage the member states to buy locally-produced weaponry within Europe. In response to Russian aggression in Ukraine, it launched a €500 million fund to cover joint purchases.

However, these efforts may be only a weak patch in view of the overall needs and actual costs of large arms procurement. Unfortunately, it is still the case that European countries often rely on non-European sources simply because they are left with no other option. Indeed, domestic European production is totally inadequate.

A recent article in[1], which enlarges on this neglected issue and is tellingly titled “Why Europe’s defence industry can’t keep up”, mentions several pitfalls.

One of them is just the fact that more complex purchases can take several years in Europe, and some advanced weapon systems are available only outside Europe. It quotes, among others, David Chour, CFO of Czechoslovak Group (CSG), the largest Czech arms manufacturer, who says the problem with the European defence industry is that it is used to producing complex weapons in very small batches over a long period of time, which complies with a peacetime situation. Still, given that the security environment has changed, billions of dollars of investment are needed. The main problem, therefore, is the undersized production, which unfortunately is not adapted to the current situation where Europe is facing an imminent threat.

Geopolitics plays a role

As the article cited above also reminds us, it is bilateral relations and geopolitical factors that decide where the defence money is spent. Two examples are given. In September 2021, France offered to supply Greece with three frigates for its fleet for three billion euros after the deal with Australia ultimately had collapsed. Macron also offered a “strategic partnership” to support Athens in its decades-long dispute with neighbouring Turkey, which permanently makes highly controversial territorial claims in the Aegean.

The other way round, when Poland, one of the largest donors of military support to Ukraine, decided to replenish its stockpiles, the government turned to South Korea and signed a record €14.5 billion arms supply deal in July.

Warsaw has indicated that it is importing weapons from non-European countries partly because Germany, despite having the third largest defence industry in Europe, is not replacing its tanks fast enough. Indeed, Berlin had earlier promised Poland that it would send modern tanks in exchange for Poland sending its Soviet-era tanks to Ukraine.

EU countries must invest in defence in a coordinated way

In Europe, military spending has been rising for a few years due to the increasing pressure of the US on the European countries to contribute more to the common defence within NATO and to spend at least 2% of their GDP on defence. Moreover, the Baltic countries, for example, started to increase their spending after 2014 in response to Russia’s annexation of Crimea.

The viewed Russian threat should also be an incentive for Europe to improve the coordination of its defence investments. Unfortunately, today this is often done rather inefficiently, without considering the possibilities of cooperation among the European countries.

Europe’s security challenge meets with the resistance of a typical problem of the current EU, namely, the success depends on the harmonisation of all 27 Member States’ own interests. The European Union as a whole is therefore facing a significant challenge, and it is primarily up to all the member states to work together to change this.

Source: Brussles Morning