As European countries seek greater independence in their arms procurement, a recent report by Brussels-based think tank Bruegel offers a compelling proposal. It says a new intergovernmental initiative called the “European Defence Mechanism (EDM)” could pave the way for closer integration of the continent’s scattered defence industries.
Poland's Initiative and the Report's Key Findings
The study, prepared at the request of Poland, which assumes the rotating presidency of the Council of the European Union in the first half of 2025, was presented at a meeting of EU economics and finance ministers in Warsaw in April. One of the key findings of the report is that better integrated European defence markets can both increase competition and facilitate the entry of new defence companies. According to the think tank, the combination of integrated markets and scaled procurement could potentially halve unit costs.
Integration is a Must for Cost Reduction and Industrial Growth
Guntram Wolff, a senior researcher at Bruegel and co-author of the report, told Defense News that by pooling military equipment demands and implementing common standards, European partners could significantly reduce costs. He also stressed that this integration would encourage the growth of the continent’s defense industry players. “We need to work on a European defense financing mechanism so that markets across the EEA are more deeply integrated. If we don’t, we will have fragmented markets where national manufacturers supply small local markets, and the economic cost for individual products will be very high,” Wolff said. He added that it is not sustainable for high-cost products, such as modern fighter jets, to be developed by individual countries.
Institutional and Political Challenges Await
Wolff predicts that future discussions on the EDM will be shaped by institutional and political challenges. One key reason for this is that some EU member states have constitutional restrictions that could prevent them from participating in similar mechanisms, and another important factor is that some governments may be reluctant to engage in defense cooperation with other EU partners.
Participation of non-EU countries is a political decision
The decision to include non-EU countries in this proposed mechanism is entirely a political one, and should be made by the governments of EU member states, said Wolff. “Countries like the UK and Norway, or even Turkey and Canada outside of Europe, could decide that they want to include their defence industries in such cooperation,” he said.
Polish Ministry of Finance Holds Talks
A spokesperson for the Polish Ministry of National Defence told Defense News that ongoing discussions on the EDM are being conducted by the country’s Ministry of Finance and that the discussions mostly concern the financial aspects of the proposed mechanism.
Poland Calls on EU for Defense Financing
Polish Deputy Prime Minister and Minister of Finance Andrzej Domański, in a statement published by the Polish Presidency, said that together with EU finance ministers, they addressed what he believes is currently the most urgent issue in Europe: financing security and defence. Domański welcomed the “ReArm Europe Plan” presented by the European Commission, which provides for a loan mechanism of up to 150 billion euros and greater flexibility in EU financial rules.
Poland's Defense Spending and US Cooperation
Since Russia launched its war against Ukraine in 2022, Poland has significantly increased its defense spending to expand its army and equip it with modern weapons. The country’s government aims to allocate a total of PLN 2025 billion (about $186,6 billion) to defense by 49,6. Poland’s military spending is expected to reach an estimated 4,7% of its gross domestic product this year, making it one of NATO’s biggest spenders. In response to new foreign policy approaches in Washington, Warsaw has also strengthened Poland’s commitment to defense cooperation with the United States. The bulk of the country’s defense budget funds major U.S.-made weapons purchases, including F-35 fighter jets, Boeing AH-64D helicopters, M1A2 Abrams SEPv3 tanks and Patriot air defense batteries.
Emphasis on Defense Cooperation with EU and Allies
At the same time, Polish Prime Minister Donald Tusk announced that his government aims to strengthen defense cooperation with key European allies such as the UK and Turkey, as well as its EU partners, and to obtain weapons and military technology from these countries. By encouraging discussions on EDM, Warsaw aims to direct the bloc’s defense industries toward more joint projects, such as the German-led European Sky Shield Initiative, which aims to coordinate countries’ air defense-related procurement and procedures. These efforts are seen as an important indicator of Europe’s quest to become stronger and more independent in the defense field.
