"We are sending weapons systems to Ukraine, which is great, and ammunition, but not from full warehouses, but half-empty ones. And that's why you can see the bottom of the barrel now, which is why we need an industry that will increase production at a much faster pace. We need large quantities " Rob Bauer, head of NATO's Military Committee, said last October at the Warsaw Security Forum.
However, for Europe to be able to send the necessary quantities of weapons and ammunition to Ukraine and replenish its stocks, it will take years, according to analysts.
Europe is currently facing multiple challenges, starting with decades of underinvestment, the fragmentation of the military-industrial sector dominated by national interests, and the lack of key raw materials it must import, according to a mid-2023 European Parliament report.
From three percent of gross domestic product (GDP) during the Cold War, European countries' defense budgets were reduced to 1990 percent on average after the 1,3s. According to NATO data from 2017, only four of the then 29 members met the goal of two percent of spending agreed in 2014.
That number was increased last year to 11 member states of the NATO alliance. It is expected that this year, the majority of the 31 members of the Alliance will meet the aforementioned criteria.
In order to strengthen the necessary capacities in the new circumstances, European members should increase their spending to three percent in the future, especially in light of the comments of the leading Republican candidate for the US President, Donald Trump, that the US could withdraw from NATO, as he warned and while he was at the head of the state.
According to a study by the Washington-based International Institute for Strategic Studies (IISS) last June, during the Cold War, European governments were willing to finance excess capacity in the defense-industrial sector.
However, domestic demand for military equipment in Europe has declined sharply since the end of the Cold War, and defense-industrial capacity has been reduced commensurately.
Considering that a high-intensity war was considered unlikely, most European governments no longer considered it politically justified to spend taxpayers' money on excess defense-industrial capacities.
Moreover, the acquisition of sophisticated equipment such as aircraft and ships is always prioritized over standard ammunition, including artillery.
"With the end of the Cold War, instead of readiness, the focus is on efficiency, achieving more with less. The defense industry had no choice but to make business decisions to reduce capacity. The war in Ukraine prompts a rapid reassessment of priorities. Now the challenge is to rapidly increase production," he says. IISS.
"War of Industrial Capacity"
Europe has "systematically demilitarized" because it has not had to spend money thanks to the absence of an obvious threat and US military dominance across the globe, Anthony King, a professor at Warwick University, told the Wall Street Journal.
"They basically fell asleep," King pointed out.
The end of the Cold War also brought about a profound change in the types of armed conflicts in which NATO forces were engaged as large-scale wars were replaced by smaller skirmishes against unequal adversaries.
Because of the wars in Afghanistan and Iraq, combined with military budget cuts, most European armies are built for counterinsurgency operations in distant countries, while ill-equipped to fight a well-armed enemy in a ground war, such as in Ukraine, according to the Wall Street Journal.
That's why Great Britain invested in lighter armored equipment, such as Land Rovers, instead of heavy artillery, because it was fighting less well-equipped enemies.
The Netherlands disbanded its last tank unit in 2011, handing over the remaining few tanks to the German army.
Conscription in most European countries was abolished after the Cold War.
Today, Russia, China and India are ranked as more militarily powerful than Great Britain, Europe's top-rated military, while South Korea, Pakistan and Japan are ahead of France, Europe's second largest power, according to the Global Firepower website.
The real readiness of the European armies was demonstrated during the operation of NATO forces in Libya in 2011, which they led, quickly running out of precisely guided ammunition, Mike Sweeney recalls in an analysis on the Defense Priorities website.
According to the IISS, war simulations have shown that the UK would run out of ammunition in just eight days in a high-intensity conflict.
German media suggested in 2022 that the Bundeswehr's supplies would last between a few hours and a few days in such a conflict.
It is therefore, as noted by Morten Brandtzæg, CEO of Norwegian defense company Nammo, "a war of industrial capacity".
Two decades to restock
After Russia's annexation of Crimea in 2014, European countries are increasing defense allocations, but the military industry cannot expand its capacities so quickly, because it is expensive and complex, especially restarting long-suspended production.
The lack of spare parts to repair existing hardware is a particularly pressing issue.
It takes between two and four years to establish a new production line for the high-intensity military equipment needed in Ukraine, Lancaster University professor Simone So told VOA.
"The same goes for munitions. We're talking about hundreds, potentially thousands of people who have to have very, very specialized skills to work in this endeavor," So pointed out.
For example, BAE Systems, which operates in more than 40 countries, informed the US Department of Defense in the middle of last year that it would take 30-36 months to restart production of the M777 howitzer.
The German armed forces are looking for around 20 billion euros worth of ammunition to replenish stocks, but according to estimates at the end of 2022, only around ten percent of this demand will be contracted in 2023-24.
At this rate, the replenishment would take 20 years, according to the IISS.
"BDP does not make weapons by itself"
There are at least three competing demands for munitions in the European defense industry that must be met urgently.
First, NATO and the European Union must continue supplying weapons to Ukraine, according to Kathryn Elgin and Tyler Hacker, analysts at the Washington-based Center for Strategic and Budgetary Assessments (CSBA) in an article on the Defense News website.
Second, European NATO members must replenish their own stockpiles of weapons depleted by transfers to Ukraine, including artillery shells, anti-tank and longer-range missiles as well as surface-to-air. Some of these weapons date back to the Cold War and are almost obsolete.
Third, the European members of NATO must create a larger stockpile of modern and future weapons in order to meet the revised defense requirements by the end of the decade, Elgin and Hacker point out, adding that the war in Ukraine has exposed the inadequacy of Europe's previous war reserves: it is not enough to fill the stockpiles - we need them is to expand.
This means that NATO members will have to simultaneously develop the next generation of ammunition and follow advanced technologies such as hypersonic, autonomous and low-cost weapons.
"Finally, in implementing these three priorities, Europe must nurture an industrial base capable of competing with a mobilized Russian industrial base.
Commentators often point out that Europe's gross domestic product is nearly eight times that of Russia's, but GDP per se does not produce weapons," Elgin and Hacker say.
Congested supply chains
Difficult supply chains and bottlenecks due to the limited number of specialized suppliers in Europe are the cause of the increasingly long wait for deliveries.
Scaling up production, even of relatively simple systems like artillery shells, is also proving a challenge, with chemicals for explosives and propellants, as well as metals and plastics for fuses and cartridges, also in short supply.
Jirži Hinek, president of the Czech Arms and Defense Industry Association, explained that "most of the raw materials necessary for military production today are minimally or not at all exploited in EU countries", and that "prices are astronomical" for some scarce items.
Hinek specified that the EU imports key materials from third countries, especially from Asia and Africa.
The automotive industry is more interesting for component manufacturers
Companies in the military industrial sector also face strong competition in other areas of production and procurement of parts.
"The defense industry makes small volumes, which is not of much interest to electrical component manufacturers. They are much more interested in working with car companies who make much larger volumes," said Jean-Marc Duquesne, head of the defense equipment industry lobby group, known as GICAT, which represents companies such as Safran, Thales and Airbus.
For some electronic components, the waiting time is nine months, he added.
There is a shortage of raw materials such as aluminum, titanium and powder, as well as explosives and propellant, according to several directors of companies in this area, reports Politiko.
In France, the aerospace industry has started stockpiling titanium and is pushing for more recycling.
Manufacturers are looking for orders
European defense industry leaders are calling for firmer and longer-term orders to meet the demand for increased capacity to meet wartime needs in Ukraine and other security priorities.
They are reluctant to invest without a contract or firm commitment from buyers, as demand could fall again once the war in Ukraine ends, according to the IISS.
A number of European companies are frustrated by the lack of contracts despite their governments' announcements of large budget increases and declarations of urgency to fill gaps in military supplies.
The Association for Aviation, Security and Defense ASD, which lobbies for the industry in Brussels, announced at the end of November that strengthening defense capabilities requires long-term planning and more tangible cooperation with the European Union and national governments, reports Reuters.
"This is a huge investment and we in the industry cannot do it alone," said Mikael Johansson, CEO of Sweden's Saab ( SAABb.ST ), and deputy chairman of the ASD Association.
Due to the propensity of defense ministries to reduce production, depending on the circumstances, it is particularly risky for the military industry to expand production before winning a contract.
On top of that, the defense industry is under pressure to significantly expand its capabilities at a time when the EU's expansive Environment, Social and Governance (ESG) agenda has made access to finance more difficult for the sector.
In this context, if the war were to end soon, governments would probably be under pressure to divert scarce resources elsewhere, IISS assesses.
Capacity increase
Meanwhile, companies across Europe are ramping up production of military equipment and ammunition.
Firms such as the European rocket manufacturer MBDA and the Czechoslovak Group hired an additional thousand workers during 2023, writes Politiko.
In Sweden, Saab has already doubled production in recent years and plans to double it again by early 2025.
In France, production of some items — including weapons sent to Ukraine — also doubled.
MBDA produces 40 Mistral anti-aircraft missiles per month instead of 20.
Nexter increased production of Caesar howitzers from four to eight units per month; the company is in talks with the Italian government to start night shifts, said Dominik Gillet, head of Nexter's munitions branch.
After decades of producing small quantities, strengthening the continent's defense capabilities in a meaningful way will require billions and years of patience, several European industry executives told Politiko.
"There is quite a gap between strengthening existing supply lines and building new factories, which will take several years," said one of them, speaking on condition of anonymity because they are not authorized to speak publicly.
"You can't just push a button," said one of them.
At the same time, the war in Ukraine has given momentum to joint procurement in other ways that could serve as a precedent.
In March and April 2023, 23 EU member states plus Norway signed a project for the joint procurement of ammunition, which is managed by the EU institutions in order to accelerate the procurement of 155 mm artillery ammunition to help Ukraine and for national needs.
Thierry Breton, the EU's industry commissioner, said arms companies were making progress in ramping up production.
But Mikael Johansson, Saab's chief executive, said he could not predict when he would be able to meet the EU's target of increasing annual production of 155mm shells to a million a year, a key element in Ukraine's growing war of attrition against Russia.
Import instead of investment in production
Many European countries are still inclined to buy weapons from other markets rather than waiting for the development of common ones on the old continent.
"I still hear some people saying that French aircraft manufacturers are profiting from the war in Ukraine. When it comes to Dassault Aviation, the profit is zero," said the company's CEO Eric Trappier in the French Senate in mid-2023.
"Those who profit from the war in Ukraine are the United States of America, period. There are no others. At least as far as fighter planes are concerned," added Trapij.
Poland concluded contracts of almost ten billion dollars for the purchase of Abrams tanks and F-35 fighters from the US, and also set aside 10 billion dollars for the purchase of South Korean military equipment.
Denmark and the Netherlands are buying Israeli weapons, and Romania is negotiating the purchase of the F-35, writes Politiko.
Also, in March 2022, the German government announced that it would buy 35 F-35 fighter jets to replace its fleet of Tornado strike aircraft, rather than wait for the completion of the joint European aircraft project.
This increased diplomatic tensions with France, and the failure of the program caused a further setback in cooperation in the European defense industry.
While ammunition jointly procured for Ukraine will have to at least be assembled in the EU, there are no such requirements for most national militaries.
"When I see that some countries are increasing their defense spending in order to massively buy products from outside Europe, I simply say to them: You are setting the stage for tomorrow's problems," French President Emmanuel Macron warned in Bratislava in the middle of last year.
Without a common vision of defense
The European Union has an established Common Security and Defense Policy, but, despite its name, it does not define a common defense vision.
Russia's invasion of Ukraine forced the European Union to take responsibility for security instead of passively relying on NATO as its security guarantor, writes Pola Alvarez Kusero, an analyst at the Spanish shipbuilding company Navantia on the War on the Rocks website.
In her opinion, the USA also contributed to the fragmentation of European defense.
Increasing dependence on the US for security guarantees after the Second World War allowed them to exert considerable influence on European defense.
Kucero believes that Washington used this to dissuade the European Union from developing defense resources for fear that it would reduce NATO's power.
"This, in turn, would adversely affect US strategic ambitions and create competition for the US defense industry. Paradoxically, however, Washington also continued to pressure European allies to increase their defense spending and contribute to the transatlantic alliance on an equal basis with the US." , assesses Kusero.
An example of this is the absence of an agreement between the American Airbus and the French Dassault Aviation at the end of 2022 on the division of work for the next generation fighter aircraft.
The group faces further development challenges, including finalizing the system design, and has publicly stated that it may be unrealistic to expect full completion of the program by 2040.
"Ultimately, the fragmentation of the European defense industry means that companies perceive each other as rivals, not as partners," Kusero assesses.
A unique defense market only on paper
Joint EU defense spending is only 18 percent, according to 2022 figures, well below the 35 percent target set by the European Defense Agency (EDA).
It is mainly held back by a myriad of regulatory barriers protecting national defense markets, according to an analysis by the Center for European Policy Studies (CEPS).
Europe has a significant defense industry, but it lags behind the US, which has 39 percent of the global market share, according to Statista. The participation of the EU is 27 percent (France 11 percent), and Russia 19 percent.
A fragmented EU defense industry
Reducing duplication of capacity in the defense industry is one way to increase European production.
However, this actualizes the perennial European problem of national preferences.
For many countries, maintaining a national defense industry concerns the assurance of sovereignty and takes precedence over the efficiency of industrial integration and financial rationality.
Thus, the Ministry of Defense of Lithuania states that there are at least 15 companies in 11 EU member states that can produce 155 mm caliber ammunition.
This means that there is no strong, unified European defense industrial base.
Therefore, many European nations have decided to rely on existing off-the-shelf solutions, such as existing American products, or the development of domestic products at the expense of new joint solutions at the EU level.
As a result, Europe uses more than five times the weapons systems of the United States in certain categories, including main battle tanks, fighter jets, submarines and various types of munitions, Kusero points out.
According to Statista data from 2016, EU militaries have 178 different types of weapons, 148 more than the United States, despite having less than half the US budget.
In the EU's 27 member states, twelve different types of battle tanks are in use compared to one in the United States (Abrahams), according to a report by the Center for Interoperability of the European Army (Finabel).
Also, 16 infantry fighting vehicles are in use on the old continent, and three in the USA; 12 self-propelled howitzers versus one in the US; 14 different fighter jets, five in the US; four attack helicopters while two in the US; 25 destroyers and frigates, compared to two in the US; ten conventional submarines and five nuclear submarines and four in the USA.
"This duplication of systems hinders cooperation in joint military operations, equipment maintenance and interoperability, weakening European security and defence. Interestingly, market fragmentation is partly influenced by the large number of obsolete systems that remain part of the military inventory. For example, while there are 12 different types of combat tanks (in Europe), the market is dominated by one system, the Leopard 2," the Finabel report states.
According to the High Representative of the European Union for Foreign Policy and Security, Josep Borelj, it could avoid competition for the same products with limited industrial capacities.
"We can have greater negotiating power; we could ensure the interoperability of the armies," said Borelj.
"Cooperation is the exception, not the rule"
However, the benefits of European cooperation in the field of defense have not yet been demonstrated in practice, says Sean Monahan from the Washington-based Center for Strategic and International Studies (CSIS).
"Cooperation remains the exception, not the rule. An extract from the latest annual report shows the current European dilemma: Europe spends more on defense, but cooperates less," says Monahan, adding that in the last decade, cooperation on this front has been significantly declining in the EU.
According to him, this dilemma could not come at a worse time for Europe.
Namely, the Russian invasion of Ukraine requires the strengthening of defense on several points: the continuation of support to Ukraine, the strengthening of its own, European defense in order to deter Russia from continuing its aggression against other countries and to compensate for the inevitable reduction of the US presence since US forces are needed to deter "more and more equipped and a more belligerent China in the Indo-Pacific," says Monahan.
"Strategic Cacophony"
Hugo Mayer, a researcher at the Center for International Relations (CERI) at Sciences Po Paris and Stephen Brooks, a professor at Dartmouth College, call the problem facing Europe a "strategic cacophony" which they define as "profound differences across the continent in all domains of national defense policy, above all in threat perception".
The practical result is the dominance of national and not European interests in defense, which is also stated in the EDA report for 2022.
"Member states implement their [defense] plans to a large extent at the national level. The key drivers remain primarily nationally defined goals," the aforementioned document assesses.
In any case, adjusting to a high-intensity war against an enemy capable of fighting for control of airspace or in the electromagnetic spectrum will require not only time but, as the IISS assesses, a "cultural reset."
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