Europe's $1 Trillion Defense Race: A Quest for Military Independence
President Trump's renewed interest in Greenland has sparked critical discussions within NATO about Europe's ability to manufacture sufficient weaponry to operate independently of the United States. While defense analysts and lawmakers acknowledge that Europe is not yet fully self-reliant, the continent is making significant strides toward reducing its dependence on American military support.
The Urgent Drive for Self-Sufficiency
Europe's once-stagnant defense industry is now producing drones, tanks, ammunition, and other military hardware at the fastest pace in decades. This surge is driven by the need to rearm in response to Russian aggression and growing strategic divides with Washington. However, achieving complete operational independence remains a formidable challenge.
According to the International Institute for Strategic Studies, replacing current U.S. military equipment and personnel in Europe would cost approximately $1 trillion. The region still faces gaps in manufacturing capabilities, particularly in stealth fighters, long-range missiles, and satellite intelligence systems. Europe's fragmented defense industry currently lacks the capacity of its U.S. counterparts, which benefit from the world's largest military budget.
Rapid Progress Amid Growing Concerns
Despite these challenges, Europe is making rapid progress. Sharp increases in military spending and renewed investments in research and development are bringing the continent closer to operational independence. For instance, Clemens Kürten founded a German drone company in late 2024 without an initial design or staff. Within a year, the company had sold hundreds of units to European militaries.
Andrius Kubilius, the European Union official responsible for revitalizing the defense industry, emphasized the need for a "European pillar of NATO" during the World Economic Forum in Davos. He highlighted the importance of replacing strategic enablers like space satellites, which Europe currently relies on the U.S. to provide.
Financial and Industrial Momentum
Europe's defense sector is experiencing its most significant financial boost since the Cold War. Last year, the continent spent an estimated $560 billion on defense, double the amount from a decade ago. Analysts at Bernstein project that by 2035, Europe's spending on equipment will reach 80% of the Pentagon's budget, up from less than 30% in 2019.
This shift is already transforming the industrial landscape:
- Germany's Rheinmetall has opened or is constructing 16 new factories since Russia's invasion of Ukraine in 2022.
- Italian defense giant Leonardo has increased its workforce by nearly half to 64,000 employees in just over two years.
- MBDA, Europe's largest missile maker, has quadrupled its production of short-range Mistral air-defense missiles and doubled its output of antitank missiles.
Capabilities and Shortcomings
Europe has demonstrated impressive capabilities in certain areas. Rheinmetall alone will soon produce 1.5 million 155mm artillery shells annually, surpassing the combined output of the U.S. defense industry. The continent also dominates the global market for armored vehicles, ships, and submarines, with Germany's Leopard tank being the world's most popular.
However, significant gaps remain. Europe is at least a decade away from developing a locally produced stealth jet fighter. The region also lags behind the U.S. in satellite intelligence and relies heavily on American companies for cloud computing to manage battlefield data. Additionally, Europe has almost no production capacity for ballistic missiles or other very long-range missile systems.
Political and Strategic Implications
The push for defense independence is not just an industrial endeavor but a strategic necessity. As the U.S. shifts its focus toward Latin America and Asia, European nations are increasingly concerned about potential disruptions in the supply of American weapons. Finland's President Alexander Stubb noted that his country's U.S.-made fighter jets cannot operate long-term without American spare parts and updates.
Some European countries are already shifting their procurement preferences. Between 2020 and 2024, 79% of Denmark's defense imports came from the U.S. However, last year, as Trump pressured Denmark to sell Greenland, over half of Denmark's weapon purchases originated from Europe.
The Road Ahead
Despite the progress, Europe has not yet reached a watershed moment in decoupling from U.S. defense reliance. Pieter Wezeman of the Stockholm International Peace Research Institute notes that a full transition remains elusive. European defense companies, particularly in aerospace, are not moving fast enough to meet demand.
Roberto Cingolani, CEO of Leonardo, pointed to fragmentation as a major barrier: "Every country wants to have its own tank, its own aircraft, its own ship, and of course the dispersion in terms of investment, R&D, and procurement does not favor European rearmament."
Nevertheless, efforts are underway to address these shortcomings. Several projects aim to produce missiles with ranges exceeding 1,000 miles after 2030, and the U.K. has established its own military satellite constellation. French President Emmanuel Macron recently revealed that two-thirds of Ukraine's satellite intelligence now comes from France.
As Matthew Savill of the Royal United Services Institute aptly summarized: "Could Europe arm itself? Yes, but over time. The volume is not there yet, and we need to accept that in some areas the stuff is not as good."
