Catching up: Europe’s Path to Strategic Autonomy in the Defence Industry

Over the past decade, strategic autonomy in defence has become a defining objective in European policymaking. At its core lies a clear but demanding proposition: Europe must be able to defend itself and sustain military operations without excessive reliance on external actors, most notably the United States (US). 

As Europe’s security environment has deteriorated and transatlantic relations have become more uncertain, this challenge has become particularly acute in the defence-industrial domain. In practical terms, strategic autonomy depends on Europe’s ability to design, produce, sustain and upgrade critical military systems under European control. 

Despite unprecedented political attention and increased spending, the European Union (EU) continues to struggle to translate ambition into a coherent defence industrial posture. Defence planning, production and procurement remain predominantly national, resulting in persistent coordination challenges across the European Defence Technological and Industrial Base (EDTIB). Dependencies on external suppliers, especially for high-end platforms, digital enablers and critical inputs, remain a recurring concern. 

At the same time, strengthening strategic autonomy raises difficult governance questions, notably how to balance short-term readiness with long-term industrial development, how to manage market consolidation without undermining competition, and how to sustain partnerships with non-EU allies while limiting critical dependencies.

Report findings

This report finds that across several capability areas, Europe remains dependent on the US for advanced platforms and technologies, while also relying on China for raw materials, components and supply chains underpinning defence production. Europe’s defence industry is neither hollow nor uncompetitive but structurally misaligned with its strategic ambitions. This is most evident in a remaining gap between the immediate necessity for rapid rearmament and the long-term goal of durable autonomy. In areas such as air and missile defence, long-range strike and digital capabilities, demand signals, production scale and governance arrangements often fail to converge. Europe essentially finds itself in a double bind. For crucial military platforms it relies on the US, and the supply-chains on which it develops its own systems depend on China. Despite rising investments and a plethora of European initiatives, the industry also faces bottlenecks across capital access, production efficiency, innovation, and workforce shortages. The legacy of European fragmentation persists as a rational outcome of multiple non-hierarchical structures, where member states view ‘off-the-shelf’ procurement and national control as the lowest-risk options. This leaves industry without the aggregated, long-term commitments required for scale and creates practical challenges to developing European alternatives through defence-industrial cooperation.

Moving forward does not necessarily require a grand overhaul, but rather pragmatic steps to balance readiness, industrial development, consolidation, competition and partnerships. This begins with taking stock of long-term dependency risks in national procurement choices – aligning not just with urgency and convenience, but with the broader autonomy objectives of the continent. Crucially, autonomy should not be framed as a pursuit of isolationist self-sufficiency, but as the active management of interdependence. This means securing the freedom to act through diverse, resilient partnerships and reciprocal safeguards. Ultimately, the ‘strategic autonomy of the European defence industry’ is not a fixed destination, but a long-term discipline of decision-making.

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