EU Defence Industrial Policy: Towards a New European Military-Industrial Regime?

I published a chapter entitled « EU Defence Industrial Policy: Towards a New European Military-Industrial Regime? » in the 2024 LUHNIP report on EU industrial policy.

Executive Summary – The transformation of the European military-industrial regime could be an appropriate political response to the geo-economic challenges facing the European Union (EU) and its member states, including the war in Ukraine. This new European military-industrial regime requires the activation of four politico-institutional changes: the supranationalisation of de- fence industry governance within the EU, the strengthening of interventionist policy instru- ments vis-à-vis the market, the integration of the European Defence Technological Industrial Base (E-DTIB) and the strengthening of the EU’s actorness to regulate foreign dependencies, known as ‘strategic autonomy’. However, despite certain political and institutional adaptations that have accelerated since 2022, EU Member States have not implemented the ‘great trans- formation’ that is a condition for the emergence of a more effective institutional organisation and policy instruments to govern the defence industry within the EU in a context of increas- ing conflictuality and international instability. How can a new European military-industrial regime emerge within the EU to respond more effectively to the geo-economic challenges of the 2020s? The first part of this chapter takes stock of the European military-industrial regime before the start of Ursula von der Leyen’s second term as the head of the European Commis- sion (2024-2029). The second part outlines the inadequacy of the European military-indus- trial regime to meet the geo-economic challenges of the 2020s. The third part demonstrates the reasons that make the proposed new European politico-military regime more desirable for both states and companies, while listing the political, institutional and economic obstacles to its establishment. The fourth part makes three recommendations aimed at removing these obstacles and activating changes in the short term – i.e. before 2027 – that will enable the EU, its member states and its companies to respond more effectively to the new strategic context.