Investing in European Defence Industry: The Case for a Sovereign Defence Investment Fund

Sovereign funds designate institutions or instruments aimed at financing long-term public policies via an investment of public funds which, leverages financial markets to ensure private investment. In response to the growing urgency of EU and NATO European members to improve their investments to insure their security and the persistent fragmentation of the European Defence Technological and Industrial Base (EDTIB), this paper makes the case for a European sovereign wealth fund dedicated to defence. Such a fund would complement existing subsidy and investment instruments by enabling long-term equity investment,
industrial consolidation, and strategic autonomy. It would help secure critical assets and technologies, support SMEs, and finance dual-use innovation and strategic stockpiles.