Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Europe’s defence industry should consolidate in a handful of players able to meet the continent’s military needs after the Trump administration threatened to withdraw US support, the Belgian defence minister has said.
EU capitals and their partners, including London, have begun emergency talks on how to increase their defence capabilities and military spending, and provide security guarantees to Ukraine in the event of a potential US-Russia peace deal struck over their heads.
“Europe needs a more integrated defence industry,” Theo Francken told the Financial Times. “We need to produce better and to work together,” he said, adding that in Europe’s fragmented landscape, each country pursued its own projects, resulting in small-batch orders, high maintenance costs and inefficiencies.
US defence secretary Pete Hegseth last week warned that his country’s military presence in Europe would not be “forever”, sparking fears in many capitals about a withdrawal of the roughly 90,000 US troops and weaponry stationed on the continent.
Francken said the Trump administration served as a wake-up call, with “more integration of defence companies and industrial factories” expected to “happen in the next 12 months”.
Europe needed to form up to four “really big” defence companies, such as Rheinmetall, Airbus and Thales. This would “improve the quality” and “lower the costs” of weapons made on the continent, he said.
But the Belgian minister noted a lack of leadership among European heads of state and government to push for such ambitious projects. “We need somebody who says, ‘OK, guys, we’re in deep shit’,” Francken said. “We’re in big problems and we need to take really big steps ahead.”
Europe’s joint projects have so far not been successful, in part due to insistence from each nation to supply part of the overall product. “Just name one European project, an integrated project that has been a success.”
“We need to stop every single country having their own team of engineers . . . trying to make a compromise,” he said, adding that the current process amounted to putting all the ideas “in a bottle and then we shake it and then we have like a chopper or a plane. It doesn’t work like that.”
Market fragmentation, high costs and lower quality were among the main reasons why European governments prefer buying American weapons, he said. Those arms sales could be an incentive for the US to continue engaging with Europe. “But European allies need to do more,” he said.
Belgium, home to several weapons companies, including firearms manufacturer FN Herstal, is considering joining a Franco-German fighter jet project — a decision due by the end of the year.
Francken said that despite the consolidation drive, larger companies should not “absorb every single enterprise” and smaller enterprises should “keep on going”.
To finance the defence push, Francken said he was in favour of the European Commission proposal to relax its fiscal rules for defence spending, to allow member states to take on more debt.
“You can see that we need more money for the moment to have more purchases and acquisition of a lot of things,” he said. Belgium has one of the highest debt-to-GDP levels in the bloc — more than 100 per cent, compared with the 60 per cent EU threshold.
Francken said he was “not really” in favour of joint borrowing to fund defence — an idea promoted by France and others — but said it could be part of a larger compromise on raising defence spending in the future.
