The European Defence Fund: a Game Changer for European Defence Industrial Collaboration

The European defence industry and market remain highly fragmented along national borders. A decade of reductions in the defence spending of the Member States of the European Union (EU), in particular as regards research and development (R&D), has nevertheless failed to bring progress in increasing the levels of cross-border collaboration. Despite budget pressure, collaborative procurement and research expenditure levels remain low and far below the targets set. Cost escalation is at the same time increasingly putting the development of new major defence systems beyond the individual funding capacity of even the largest EU Member States. Such a situation is not sustainable and challenges the capacity of the European defence industry to compete in the medium and long-term. This article will first assess such key challenges faced by the European defence industry. It will then analyse the response recently brought up by the EU Institutions through the establishment of the European Defence Fund (EDF) and look into the Fund’s prospects of becoming a genuine game changer by effectively incentivising defence collaborative projects and opening the defence industries supply chains in Europe…