European Union nations are heavily dependent on foreign defense equipment, with nearly two-thirds of their military purchases coming from the United States, according to a new report on EU competitiveness.
The study warns that the 27-member bloc is failing to invest adequately in joint military projects and missing the chance to build up its own defense industry.
Written by former Italian Prime Minister and European Central Bank President Mario Draghi, the report highlights Europe’s insufficient spending on research and development for defense.
Italian Prime Minister Mario Draghi in Canazei on July 4, 2022. His government is on the brink of collapse following the withdrawal from the coalition he heads of the 5-Star Movement, which has sparked concerns that Ukraine’s fight against Russian aggression might be affected.
PIERRE TEYSSOT/Getty Images
“Europe is squandering its collective resources,” the report states. “We have significant spending power, but we dilute it across multiple national and EU initiatives.” The report calls for a major overhaul of the bloc’s industrial strategy to strengthen the European defense sector.
The release of the report comes as the EU faces challenges in supplying sufficient weapons and ammunition to aid Ukraine in its fight against Russia, now entering its third year.
“We are not joining forces in the defense industry to help our companies integrate and scale,” Draghi’s report adds, noting the lack of support for competitive European defense companies.
From mid-2022 to mid-2023, 63% of all EU defense contracts were awarded to U.S. companies, with another 15% going to non-EU suppliers. The Netherlands recently joined other EU members in purchasing U.S.-made F-35 fighter jets, highlighting the ongoing dependence on American suppliers.
In 2022, EU nations collectively spent €10.7 billion ($11.8 billion) on defense R & D, a mere 4.5% of total defense spending. In comparison, the U.S. invested $140 billion, or around 16% of its total defense budget. The disparity underscores Europe’s lag in defense modernization.
Since Russia’s 2014 annexation of Crimea, NATO allies—most of whom are part of the EU—have increased their defense spending, aiming to meet the target of 2% of GDP. U.S. leaders, including former President Donald Trump, have pressured Europe to ramp up its defense spending. Today, NATO projects that 23 of its 32 members will meet the 2% target by the end of 2024, compared to just three in 2014.
Ukrainian artillerymen fire a M777 howitzer toward Russian positions on the frontline of eastern Ukraine, on Nov. 23, 2022, amid the Russian invasion of Ukraine. Russian forces have lost 40 artillery systems in the past 24 hours, Ukraine’s military said on Tuesday morning.
Anatolii Stepanov/AFP via Getty Images
The report also stresses that NATO allies need to allocate at least 20% of their defense budgets to new equipment and R & D. Joint defense projects, like the A-330 Multi-Role Tanker Transport, are cited as successes, but the logistical chaos caused by supplying Ukraine with 10 different types of howitzers highlights the inefficiencies of fragmented procurement.
The findings of the Draghi report are expected to spark reforms in the EU’s defense strategy as the bloc seeks to bolster its defense autonomy amid growing global threats.
This article includes reporting from The Associated Press
