EU’s reliance on foreign defence equipment and lack of investment in joint military projects highlighted in Draghi’s report

The findings are particularly significant as the EU struggles to provide Ukraine with the necessary weapons and ammunition to counter Russia’s full-scale invasion, now in its third year. The report suggests that Europe’s defence industry is not keeping pace with current demands, and an overhaul of the bloc’s industrial strategy may be required.

“Europe is wasting its common resources. We have large collective spending power, but we dilute it across multiple different national and EU instruments,” the report states. The analysis indicates that Europe’s failure to consolidate its defence industry has hindered the ability of companies to grow and compete effectively. It also points out that the EU does not sufficiently support competitive European defence companies.

According to the report, from mid-2022 to mid-2023, 63% of EU defence orders were placed with U.S. companies, with a further 15% going to non-EU suppliers. The Netherlands recently joined a growing number of EU nations opting for U.S.-made F-35 fighter jets, underscoring the trend of reliance on foreign suppliers.

While European defence research and development spending amounted to €10.7 billion in 2022, or just 4.5% of the total, U.S. investment stood at $140 billion, accounting for 16% of its defence expenditure. This gap highlights Europe’s lag in modernising its armed forces compared to the United States.

NATO allies, most of which are also EU members, have been increasing defence spending since Russia’s annexation of Crimea in 2014. The goal is for each country to allocate at least 2% of its gross domestic product (GDP) to national defence. While U.S. leaders have long called for higher defence spending from European allies, former President Donald Trump notably threatened to withhold defence support for nations that did not meet the target.

NATO forecasts indicate that by the end of 2024, 23 of its 32 members will have met or exceeded the 2% target, up from just three in 2014. The Russian invasion of Ukraine in 2022 has further intensified efforts to boost defence spending across the alliance.

The report also highlights the challenges posed by the lack of joint procurement within the EU. When Ukraine requested artillery support, EU countries provided 10 different types of howitzers, some of which used different 155mm shells, creating logistical difficulties. In contrast, the joint development of the A-330 Multi-Role Tanker Transport aircraft allowed participating nations to pool resources and share operating costs, demonstrating the potential benefits of collaborative defence projects.