The EU's big headache: how to rearm without the US war industry

Brussels / MadridDonald Trump's return to the White House has accelerated plans for the European Union to rearm and regain autonomy in the defense sectorAnd not only in the most immediate military power, but also in the community's weapons industry. That's why Ursula von der Leyen's European Commission plan, which European leaders endorsed last Thursday, seeks to prioritize joint arms purchases from arms companies in member states or, at most, from the bloc's closest allies, such as the United Kingdom or Norway. However, this desire also poses a headache: how to achieve this without the US industry, on which Europe still depends?

Let's get there in a pinch. The significant increase in military spending by member states has led to a further increase in EU arms purchases from the United States, although the new Republican administration is increasingly ignoring the security of its traditional Western allies. Specifically, according to the latest Sipri report, NATO's European partners have increased arms imports by 105% in the 2020-2024 period compared to the previous five-year period, and those purchased from the United States by 65%.

It is in this context that the head of the European executive herself has admitted that the European arms industry may have difficulty meeting the entire demand for massive arms purchases by European powers. Beyond capacity, Ursula von der Leyen fears that the sector is not prepared to deploy the most innovative technologies in the military and civilian sectors, such as artificial intelligence applied to defense.

More and more European partners are pressuring the other Member States to buy weapons from European companies and stop importing, especially from the United States. France, for example, is one of the partners that, above all, wants rearmament to be Made in EuropeHowever, there are other countries, such as Germany or those that feel the threat of Russian expansionism closer and are in a hurry, such as the Baltic or Nordic countries, that prioritize increasing their military power, even if it means enriching the American industry.

The gaps in the European war industry

Among the elements that continue to mark this dependence is technological capacity, such as software or electrical system updates, necessary to develop and operate military equipment. A senior Spanish executive in the sector explains that if Europe wants to "compete," it must do its part to strengthen this area. "Capacity is not only gained by having many or very large companies," he points out. Thus, beyond dependence on military equipment, R&D is a "key" issue.

"Most European militaries depend heavily on the United States for communications support, electronic warfare, and ammunition supplies in the event of a conflict," noted Justin Bronk of the Royal United Services Institute (RUSI) in an article in the Financial Times In this interview, they specifically questioned whether the United States can "deactivate" Europe's rearmament. "It's not as simple as pressing a button," the researcher clarified.

Various voices in the sector suggest that, in this scenario, one way out is the consolidation and concentration of the sector in Europe. Business fragmentation poses a challenge in terms of costs, efficiency, and competitiveness. In fact, the person who recently advocated this path was the new president of Indra, Ángel Escribano, who has already targeted the Santa Bárbara factory in Asturias, which has sparked a clash with the owner, the American company General Dynamics. "It's clear that together we are stronger," Escribano argued this week during an event in Madrid. In the case of Spain, this consolidation would provide a breath of fresh air for the sector's strength, which is much smaller compared to other countries.

A clear example of the commitment to economies of scale in Europe is Airbus, the consortium in which France, Germany, Spain and the United Kingdom participate and which, beyond supplying some of the most important airlines in the Old Continent, has a defense and space business for which the Typhoon fighters are manufactured, which supply the Spanish, British and Italian militaries.

Likewise, this idea of Europeanizing the sector has become evident in the case of the aerospace business. Last year, for example, the European consortium SpaceRise was awarded the contract to build IRIS 2. This consortium is led by SES, Eutelsat, and the Spanish satellite operator Hispasat, which Indra recently acquired. The project aims to build up to 290 satellites and compete with Elon Musk's Starlink or Amazon founder Jeff Bezos' Kuiper. "With endless investments like Elon Musk's, the focus is on strategic sovereignty in space," acknowledged a senior executive. just over a year ago at the ARA.

All of this has companies that have historically considered themselves military, and some civilian, rubbing their hands with glee. The German company Volkswagen, which has been going through a long-simmering crisis, has already raised the finger in an attempt to "reorient" its factories. In fact, there has already been talk of an investment by the arms company Rheinmetall, or of transforming the automotive business into the defense sector, as the company's director, Oliver Blume, pointed out in Telegraph.