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Russia's war on Ukraine has laid bare the challenges facing the European defence industry as it tries to meet increased demand and ramp up production in the wake of a fundamentally changed security environment in Europe. Europe's defence industry comprises aBriefing - Reinforcing Europe's defence industry - 08-11-2024
Russia's war on Ukraine has laid bare the challenges facing the European defence industry as it tries to meet increased demand and ramp up production in the wake of a fundamentally changed security environment in Europe. Europe's defence industry comprises a number of large multinational companies, mid-caps and over 2 000 small and medium-sized enterprises. It faces a multitude of challenges, such as decades of under-investment, fragmentation, insufficient critical raw material and semiconductor supplies, and a lack of manufacturing capability. The EU and its Member States have taken several steps to reinforce the European defence industry, especially since the start of Russia's war on Ukraine. Member States have boosted their defence budgets, with their combined total expected to reach €350 billion a year in 2024. The European Defence Fund is investing in research and capability development projects and has achieved very positive results so far. Permanent structured cooperation also provides the legal framework and binding commitments for progress in collaborative defence. The EU has also broken taboos, by agreeing a joint defence procurement instrument (the European Defence Industry Reinforcement through Common Procurement Act) and an initiative to build up ammunition production (Act in Support of Ammunition Production). These form part of a three-track proposal to support Ukraine's needs for ammunition (deliver ammunition from existing stocks, jointly procure from industry, and support the ramping up of production). In March 2024, the European Commission proposed the first-ever European defence industrial strategy and a defence industry programme to implement it. Additionally, the European Peace Facility, best known for facilitating lethal weapon supply to Ukraine, is being used to procure defence materiel from Europe's defence industry, further boosting its capacity. The European Chips Act and Critical Raw Materials Act are also expected to benefit the European defence industry by ensuring it has the necessary supplies to tackle the substantially increased demand for its products. These signals have led the industry to take the first steps to increase production capacity. This updates a previous edition, published in 2023. Source : © European Union, 2024 - EP Read more
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