Not shelling out: The European Union attempts to relaunch its defense industry amid the threat of conflict with Russia

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Lack of coordination

“NATO Secretary-General Mark Rutte and EU Member States’ intelligence services are warning us: if we do nothing, in five years' time, Russia may be ready for a military confrontation with NATO and the European Union,” Andrius Kubilius, EU Commissioner for Defense and Space, warned on Jan. 22 at the annual European Defense Agency conference. Russia’s invasion of Ukraine has revealed serious defense issues within the EU — despite the fact that all but four of its 27 member states are also NATO members.

One example of these problems was the EU's promise to supply Ukraine with one million 155mm artillery shells within 12 months. The decision, hailed as “historic” by EU foreign policy chief Josep Borrell in March 2023, ultimately proved too ambitious for Europe. The promised million shells were meant to resolve Ukraine’s “ammunition shortage,” but the EU failed to deliver on time. Eight months after making the bold commitment, Europe had provided Kyiv with less than a third of the promised volume. Several factors contributed to the failure of this ambitious initiative.

First, the EU faced industrial capacity shortages. “There were voices that warned: 'You better watch out. One million is easily said, the money is available, (but) the production must be there.' These warning voices have been proven right, unfortunately,” explained German Defense Minister Boris Pistorius.

Second, manufacturers struggled with orders, which EU countries were slow to place. Thierry Breton, the former European Commissioner for Internal Market and Services, said that defense plants had expanded production capacity ahead of schedule but that they still could not start manufacturing all by themselves: “It is the member states who must place the order for this ammunition.” By the time Europe had delivered the third of the promised ammunition, its stockpiles were nearly depleted, and only 180,000 new shells had actually been ordered.

Third, there were conflicts between political priorities and business interests. Delivery schedules for Ukraine were postponed, funding was delayed, and in the meantime, European defense companies, according to Borrell, were exporting 40% of their production outside the EU.

Finally, EU countries disagreed on how the supply plan should be implemented. Latvian President Edgars Rinkēvičs, for example, proposed buying rounds from outside the EU. However, EU officials were unwilling to finance such projects.

Europe eventually managed to deliver one million shells to Kyiv, but it did so nine months behind schedule. Judging by Volodymyr Zelensky’s statements, similar issues persist with other equipment, especially aircraft, of which Ukraine has received only minimal numbers.

Ultimately, it became clear that the EU lacks coordination in its defense efforts. In February 2024, European Commission President Ursula von der Leyen announced that she would push for the creation of a Defense Commissioner position provided that she secured a second term. In the fall, von der Leyen fulfilled the promise by appointing former Lithuanian Prime Minister Andrius Kubilius to the post. Kubilius immediately began talking about astronomical sums that would be needed to relaunch the European defense industry. In September, for instance, he mentioned a figure of €500 billion. But where would this money come from?

Symbolic cooperation

The problem is evident: the creation of the Defense Commissioner role is largely a symbolic gesture that has not yet led to a revision of the EU’s military doctrine. The EU will continue to adhere to its previously established common security policy, with efforts at strengthening its defense sector focused primarily on economic rather than military measures. Coordinating the continent’s armies falls outside the new Commissioner’s mandate.

Until 2022, the European Commission did not deal with defense matters whatsoever. This changed after Russia’s full-scale invasion of Ukraine — but not significantly enough for the EU to establish a unified Defense Minister role. Instead, the position Kubilius occupies is more akin to a defense procurement coordinator. The issues he will handle were previously divided among various EU institutions and programs. Some responsibilities were managed by the aforementioned Thierry Breton, who oversaw increasing defense production capacity.

Kubilius inherits the European Defense Industrial Strategy (EDIS), developed in early 2024. His work must align with the EU’s diplomatic service (European External Action Service — EEAS), the European Defense Agency (EDA), and existing initiatives under the Permanent Structured Cooperation (PESCO) program and the European Defense Fund (EDF).

Kubilius may find allies among other European Commissioners and national governments. Notably, Estonia’s former Prime Minister Kaja Kallas, known for her hardline stance on Russia, has also joined the European Commission. Additionally, Poland holds the EU presidency in the first half of 2025 and is coordinating its efforts around the slogan “Security, Europe!” Both Kallas and Polish Prime Minister Donald Tusk support increased defense spending and agree that Russia poses a significant threat to European security.

Some analysts point out that the EU has previously attempted defense coordination efforts — with limited success. Whether Kubilius will be able to change the situation remains uncertain.

The new commissioner's tasks

Even a dynamic figure like Andrius Kubilius is constrained by the EU’s bureaucratic traditions. His first hundred days in office will be devoted to preparing and presenting a “White Paper” — a document outlining proposals for EU defense policy reform and an assessment of necessary investments. The main objective is clear: in her message to Kubilius, European Commission President Ursula von der Leyen explicitly stated that the “new approach” to defense” must “ready the EU and [its] Member States for the most extreme military contingencies.”

Beyond assuming control of existing EU defense initiatives, von der Leyen outlined additional responsibilities for the new Commissioner.

She proposed creating a “single market for defense products and services,” thereby consolidating defense procurement across EU nations and working toward standardizing military production. Kubilius will oversee the implementation of the European Defense Industry Program, which aims to encourage joint purchases of European equipment and to attract investments into the defense sector. He will also focus on developing logistics and dual-use production facilities for goods that have both civilian and military applications.

Von der Leyen also emphasized multinational defense projects, such as the development of a European air defense system and a unified cybersecurity strategy.

Additionally, the EU has existing priorities in space-related activities linked to defense, such as navigation and satellite systems. Kubilius will not be starting from scratch — von der Leyen advised him to base his work on a report by former Finnish President Sauli Niinistö, who suggests the EU adopt Finland’s approach to security, which is centered on continuous readiness for potential risks.

“Since the start of this decade, the EU has experienced the most severe pandemic in a century; the bloodiest war on European soil since the Second World War; and the hottest year in recorded history… Russia’s full-scale invasion of Ukraine showed that it takes two to maintain peace, but only one to start a war. Russia’s invasion also underlined Putin’s long-held perception that the West and Western people are weak,” reads the introduction of the Niinistö report.

The former Finnish president proposes that security should be regarded as a public good — a “precondition for maintaining our values, as well as being a necessity for our economic success and competitiveness.” However, Niinistö leaves open the question of how to finance this public good.

The price of autonomy

Both Ursula von der Leyen’s message to Andrius Kubilius and the Niinistö report recommend strengthening ties with NATO to bolster EU defense capabilities. However, with Donald Trump’s return to the White House, it has become clear that Europe will need to think about its own security — and, more importantly, as the new American leader has explicitly said, to pay for it itself.

“First, it’s about having someone to call in Europe. In the United States, politics is about personnel. An EU ‘defense czar’ who can engage partners on the EU’s defense industrial plans and cut through the noise of Permanent Structured Cooperation, the European Defence Fund, the European Peace Facility, the European Defence Industry Programme, and other initiatives would be helpful in Washington — as long as he is not undermined at every turn by national capitals,” says Sophia Besch, senior research fellow at the Carnegie Europe program.

“For Europe, this is a serious kick in the butt,” remarked French Armed Forces Minister Sébastien Lecornu shortly after Trump’s inauguration. “For many decades, including in the 60s, at the beginning of the Cold War, there has always been this temptation to put themselves under the American nuclear umbrella. And so there, the capitals are going to have to make a choice. The first choice is whether or not they rearm. Do they put more public money into defending themselves?”

In this regard, the European Commission and Donald Trump have aligned interests — Europe must spend more.

“Is this money [going] to buy more weapons from the United States and further accelerate this dependence? Or on the contrary, to finally define a framework for European autonomy?” Lecornu asked.

Here, Trump’s interests and those of NATO’s European members may diverge. And in this case, Kubilius' role could be crucial. Without solid leadership, balancing cooperation with the U.S. while maintaining independence in arms production may prove to be beyond the European Commission’s capabilities.

In 2022, EU countries purchased 78% of their weapons from external markets, with nearly 80% of those coming from the U.S. The European Defense Industrial Strategy (EDIS), which Kubilius is tasked with implementing, aims for EU member states to gradually increase their defense procurement within Europe — reaching at least 50% by 2030 and no less than 60% by 2035.

Within the EU, questions about defense reforms will likely arise after Kubilius publishes his program and outlines funding mechanisms for his initiatives. “Deteriorating geopolitical relations also create new needs for spending on defense and defense industrial capacity,” read a report by former European Central Bank head Mario Draghi. Budget reallocations will take place at the national level. Meanwhile, proposals for increased EU-wide defense funding — ranging from increased borrowing to using frozen Russian assets — will require approval from both the European Council and the European Parliament.

Once funding is secured, disputes over its allocation may emerge. For example, the idea of standardizing European armaments sounds promising — until it becomes clear that one EU country might receive more defense contracts while another may have to pivot or shut down its production facilities. Currently, Europe produces 17 types of tanks (compared to the U.S.’s single model), 29 types of frigates (the U.S. has four), and 20 types of combat aircraft (the U.S. has six). The initiative to create a “European Sky Shield” — which also falls under Kubilius’ responsibilities — has shown that despite a shared vision and common goals, even staunch advocates of European defense consolidation, such as France, can slow down decision-making when it comes to selecting arms suppliers.

Moreover, only certain countries — such as Poland, Lithuania, and the other Baltic states, where the Russian military threat is not an abstraction — are truly willing to ramp up defense spending. These nations support increasing their defense budgets to 5% of GDP, as Donald Trump suggests for all of Europe. But even German Defense Minister Boris Pistorius — known for his alarmist stance and firm commitment to aiding Ukraine — has said that for Germany, 5% is an unthinkable figure.

Thus far, there is little evidence that Europe is moving toward the “explosive” development of its defense industry that Kubilius envisions. Inertia remains stronger than the instinct for self-preservation.