Mon. Feb 17th, 2025

Brussels, January 6, 2024

Written by Marco Centrone and Meenakshi Fernandes

This cost of non-Europe report investigates the potential gains to be made from deeper European cooperation on defence spending that would leverage economies of scale regarding: military forces and strategic assets; defence equipment procurement; and research into emerging disruptive technologies. The cost of non-Europe in defence spending is estimated to range from €17 to €58 billion per year. EU action to boost the efficiency and quality of European defence spending could also create jobs, improve the certainty of the business environment and strengthen the rule of law.

Why this study?

In response to heightened geopolitical risks and security challenges, including Russia’s war of aggression in Ukraine, EU leaders have called for action to boost defence readiness. In this context, the EU institutions have put forward several initiatives and reports. The European defence industrial
strategy
 presents a range of ambitious measures to help Member States move towards a European defence union. The Letta Report calls for a ‘radical transformation to build a common market for the security and defence industry’. The Draghi Report presents 10 proposals to improve the competitiveness of the European defence sector. The Niinistö Report argues that security is a public good and that readiness is a common responsibility. One way to respond to current and future challenges is to deepen cooperation across Member States to leverage European economies of scale on defence spending and activity, something that has traditionally been organised mainly at national level.

What is the study’s scope?

Investigating the quality of European defence spending, this ‘cost of non-Europe’ report evaluates the extent to which deepening cooperation could leverage European economies of scale and boost efficiency, considering the nature of defence as a public good. It assesses the potential gains to be had from scaling up different categories of defence spending to European level.

What are the study’s key findings?

The cost of non-Europe in defence spending – in other words, the cost of not leveraging European economies of scale – is estimated to range from €18 to €57 billion per year.

European economies of scale can be leveraged by means of deeper cooperation between Member States for all defence activities, including at the planning stage. The more ambitious and deeper the cooperation in the EU, the greater the potential gains for all Member States. The EU could provide complementary executive capacity and act further in the general interest of its citizens, through the provision of financial incentives, facilitation and technical assistance.

The EU could also reinforce the coordinated annual review on defence (CARD) process to broaden
areas of common strategic interest, in particular over a 20-year timeframe. Efforts to improve the quality of European defence may promote higher standardisation and better quality European military equipment, while generatingother gains for society, for instance creating jobs, establishing a more predictable business environment and reinforcing the rule of law.

European Defence - table presenting the main findings of the Cost of non-Europe report
European Defence: Main findings of the Cost of non-Europe report. Source: EP Think Tank

Read the complete study on ‘Improving the quality of European defence spending – Cost of non-Europe report‘ in the Think Tank pages of the European Parliament.

Source: Improving the quality of European defence spending – Cost of non-Europe report

 

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