European Means for European Defence

Poland ended its Presidency of the Council of the EU on 30 June, making way for Denmark to take over. Both countries have traditionally been strongly Atlanticist and sceptical of European defence efforts (until recently, Denmark opted out of the Common Security and Defence Policy). But today, both regard the strengthening of Europe's defence posture as their key priority. What is the state of play?

The threat from Russia and the prospect of reduced US involvement in European security are clearly the main drivers for the change of heart about European defence in many member states. In the past months, the EU, mostly through the Commission, renewed efforts to boost Europe’s defence capabilities. Even so, the conclusions of the last European Council, like those of the NATO summit, fell rather short of recently expressed ambitions for the completion of a powerful and more autonomous European defence.

The Trump Effect

The first half of 2025 was highly challenging for Europeans. Russia’s war in Ukraine showed no sign of easing up, while Donald Trump’s inauguration brought uncertainty to the transatlantic relationship and to the defence of Europe. With its blistering attack on European values, Vice President JD Vance’s speech in Munich on 14 February was a key moment in convincing Europeans that they must act swiftly to protect their own security: America might not only be unreliable but could even act to destabilise the continent. Meanwhile, plans were apparently already underway to reduce the US military presence in Europe.

Europeans thus stepped up initiatives to develop their defences, with two main objectives in mind: to help Ukraine and to become more independent. At an extraordinary EU Council meeting in March, the Commission proposed the ReArm Europe plan, intended to encourage member states to increase defence investment: nationally, by activating the escape clause within the Stability and Growth Pact and through the EU by borrowing at Commission preferential rates (the Security Action for Europe, SAFE, instrument).

This was shortly followed by the publication of the White Paper for European Defence Readiness, a roadmap for what member states can do to further strengthen European defence. The defence industry is a particular focus with measures to speed up production, boost innovation, and simplify standards. European states have apparently understood the urgency—SAFE took only 71 days to progress from proposal to agreement—and are ready to provide the resources, as shown by their pledge at the NATO summit to increase defence spending to 5% of GDP.

The Commission has also led on the agreement on two new EU security and defence partnerships with the UK and Canada, marking the first steps towards the possible inclusion of third countries in EU defence initiatives.

Progress

So far, however, only 15 member states have activated the national escape clause. Some large ones—Spain, Italy, and France—have declined to do so for reasons including a fear of unpicking fragile fiscal consolidation agreements, concerns about unnerving the financial markets, and a simple unwillingness to spend more on defence. Other members of the ‘frugal’ group—the Netherlands and Sweden—have been sceptical about the risk this entails for the EU’s economic stability.

The member states have six months to submit their applications for SAFE loans to the Commission. The eligibility criteria are restrictive but not strict. They allow third countries to participate but require a minimum threshold of European components to be included in finished products. This was also a requirement of the European Defence Industry Reinforcement through common Procurement Act (EDIRPA) adopted in 2023. Indeed, SAFE shares the same aims as EDIRPA: promoting joint and very rapid procurement.

This sense of urgency also meant the dilution of SAFE’s European preference measures, which essentially specify how much defence equipment purchased using EU instruments should be of EU (or wider European) origin. Differences between the member states on this question stalled negotiations on the European Defence Industry Programme (EDIP, a longer-term regulation on procurement and production) in autumn 2024. The Polish Presidency, however, managed to steer the member states towards a provisional agreement on EDIP at the June European Council.

Ambitions

European preference is intended to reduce Europe’s dependencies on foreign suppliers and strengthen the bloc by promoting innovation, conception, and production on its own soil. Less ambitious proposals, such as allowing manufacturing under foreign license, may provide skills and employment to European workers but deepen dependence on non-European sources. It may as well increase competition with products designed and made in Europe. While addressing the Russian threat is urgent, the uncertainties of dealing with an erratic US—both in its commitment to European security and support for Ukraine—point to a need to take steps to encourage Europeans to accelerate the development of their own defence capabilities.

The trilogue—an interinstitutional informal negotiation—on EDIP between the European Parliament, the Council of the EU, and the Commission should begin shortly. European preference will be a key issue for debate: this time around, guided by the Presidency of Denmark, a country that experienced the US’s ‘imperialist’ rhetoric regarding its own territory.

Meanwhile, the Commission has made its proposals for the next long-term EU budget. These appear to be positive for defence, with a €131 billion envelope labelled “Resilience and Security, Defence Industry and Space.” According to the Budget Commissioner, this would represent a “fivefold increase compared to the current budget.” Notably, the proposal places a lot of emphasis on space, where initiatives will be necessary to ensure autonomy in space-based navigation, Earth observation, and secure communications. Negotiations will mean new trade-offs and balances, but Europe’s security needs a level of funding ambitious enough to strengthen strategic autonomy by investing in such flagship programmes.