The clash has become more pronounced as NATO prepares for a leaders’ summit in Ankara in July. Alliance officials want to put defense industrial policy at the center of that meeting. EU officials say they want the Commission’s policies to be in line with NATO’s defense planning guidelines, standards and strategies.
The EU and NATO are locked in what officials describe as a “turf war” over how to manage a $1 trillion-a-year rearmament program, fueled by Donald Trump’s threats to European security. The US-led military alliance, which has been the bedrock of Europe’s security since World War II, has long opposed Brussels taking on defense powers. But the US president’s demands that allies invest more in their militaries have forced a review of arms production policies, an area where the EU has more expertise than NATO.
“There is a turf war over defense industrial policy,” one of the officials said. “It’s about who will manage the increase in production and what impact that will have on the weapons that Europe will use in the future.”
A key element of the debate is the role that American weapons should play in this rearmament wave, with NATO opposing the EU’s “Buy European” approach to its broader industrial strategy. “Both the EU and NATO agree on the need for Europeans to take the lead in the continent’s conventional defense. But they differ on how to achieve this,” said Giuseppe Spatafora, a research analyst. The EU wants to “promote defense industrial cooperation within Europe… While for NATO, defense industrial policy must remain transatlantic,” he added. European Commission President Ursula von der Leyen is due to meet NATO Secretary General Mark Rutte on Thursday, after also meeting NATO’s Supreme Allied Commander Europe, Alexus Grynkewich. Industrial policy is high on the agenda.
Trump’s hostility toward Europe, including his attempt to take Greenland from NATO ally Denmark, has strengthened the Commission’s belief that “strategic autonomy” in defense production is essential to reducing dependence on the United States, two EU officials said. They added that frustration with Rutte for his opposition to that approach is also growing.
“It is becoming increasingly clear that we need these equipment quickly, in large quantities and at an affordable cost,” said an EU official. “And the way to do that is to produce them domestically.” “NATO can determine what weapons we need. But when it comes to the regulatory and financial means to achieve them, it has very little to offer,” he added. NATO officials have reacted with discontent to recent EU initiatives, including plans for a European air and missile defense system, a “drone wall” for countries bordering Russia and the strengthening of the EU’s central military structures. These efforts are seen as part of von der Leyen’s aim to make rearmament a central part of her political legacy.
A NATO diplomat suggested that the Commission focus on areas where it has expertise: “Let it make good trade deals and not interfere with transatlantic security.” Rutte irritated EU officials earlier this year when he said the continent was “dreaming” if it thought it could defend itself without the US.
“I think Putin will like this. So think carefully,” he told the European Parliament. “There will be a lot of overlap… it will make things more complicated,” he added of the EU’s defense efforts. European defense industry groups have expressed frustration at the “constant friction” between NATO and the EU. “We need to focus on how to organize ourselves to act as quickly as possible. Territory wars do not help,” said Camille Grand. “While the US defense industrial system is overstretched because of the war with Iran and Europe is significantly increasing spending, it is clear that there is room for both NATO and the EU,” he added.
The clash has become more pronounced as NATO prepares for a leaders’ summit in Ankara in July. Alliance officials want to put defense industrial policy at the center of that meeting. EU officials say they want the Commission’s policies to be in line with NATO’s defense planning guidelines, standards and strategies.
There are also signs of cooperation. Last year, the EU exempted defense spending from fiscal rules to help countries meet NATO’s new target of 5% of GDP for the military and related infrastructure. If the 23 EU countries that are also NATO members meet this target, it would translate into an increase of $1 trillion a year compared to 2024. Brussels has also made available 150 billion euros in low-interest loans for arms purchases. The funds are intended to support European industry, but could also be used for American weapons when there are no European alternatives.
Germany, the EU’s most powerful country and biggest defense spender, favors a middle ground. Officials in Berlin believe Europe should fill gaps in capabilities such as long-range weapons, satellite communications and reconnaissance. But they oppose isolation from American systems such as the Patriot and the F-35 fighter jet.
However, Germany is trying to ensure that its companies get the most out of the 550 billion euro defence budget over the next four years. A new procurement law makes it easier to exclude non-EU bidders from defence contracts. “On the one hand, the EU wants to consolidate its role in capacity development, while on the other hand NATO is trying to be more active in industrial matters,” Grand said. “Ultimately, it is the member states that decide where 90% of the money is spent.” (Financial Times)