Can Defense Eurobonds rebalance the acquisitions of European armies?

A few days ago, the Estonian Prime Minister, Kaja Kallas, proposed using Defense Eurobonds to finance a European plan intended to finance the rapid modernization of the EU's armies.

Like the Coronabonds of the Covid crisis, these Defense Eurobonds would make it possible to overcome the budgetary constraints which, today, handicap the European armies in their modernization effort, and the states in the military support provided to Ukraine.

However, this initiative, depending on how it is designed, could also be a valuable tool for expanding and modernizing the European defense industry, in particular by encouraging Europeans to turn much more than they do today. today, towards military equipment designed and manufactured on the old continent.

Only 22% of acquisitions by EU armies concern European defense companies

Indeed, according to a recent report published by IRIS, a French think tank, the share of European-designed defense materials and equipment in the recent acquisitions of the armies of the old continent, would represent only 22%, while the United States, alone, would garner 63% of the overall European investments in this area.

F-35 USAF Elephant Walk
Out of 100 million euros spent by European Armies on the acquisition of defense equipment in recent years, 63 million are spent in the United States, 15 million in non-European countries, and only 22 million within the base. industrial and technological European defense.

In itself, this percentage is not a surprise. Indeed, in recent years, American manufacturers have won the lion's share of arms contracts awarded by European countries, including in areas in which European industries have efficient and competitive offers.

We naturally think of tidal wave F-35, chosen or soon chosen by more than fifteen European air forces, including in countries with a high-performance combat aircraft of local design, as is the case of Germany, Italy, and most likely soon, from Spain, With the Typhoon.

This is also the case in anti-aircraft defense, with the Patriot chosen by 5 European countries, where the European SAMP/T Mamba, at least as efficient and less expensive, is only in service in France and Italy. , the two countries that designed it.

Beyond the United States, other countries have made spectacular breakthroughs in recent years in Europe, in particular South Korea with the K2 tank and the K9 self-propelled gun, or even Israel, with the ATMOS cannon, or even different missile systems, such as the SPIKE anti-tank missile.

Each time, there is at least one, sometimes more, European equipment, with identical or even superior performance, and yet ignored by the European armies and leaders who, at the same time, have validated the European Strategic Compass, aiming to precisely , increase the strategic autonomy of the EU in the field of defense industry.

Putting the purchase of European equipment at the heart of the Eurobonds Defense model

This is precisely where the principle of Defense Eurobonds, proposed by Estonian PM Kaja Kallas, intended to finance the modernization of European armies to face the rapid evolution of the threat, can play a determining and structuring role, in favor of a profound cultural change within the EU armies.

Eurobonds Defense Kaja Kallas
Speaking at the Munich Security Conference 2024, Kaja Kallas, the Estonian PM, supported the idea of ​​launching a €100 billion European fund, intended to modernize European armies, and financed by Defense Eurobonds.

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