Neo Institute Europa

Charles de Gaulle Aircraft Carrier © Pascal Subtil / Creative Commons Attribution 4.0 International License / Free for use / Wikimedia Commons

Europe’s ambition to achieve defence technological self-reliance has shifted from a long-standing aspiration to an urgent strategic priority. Russia’s war against Ukraine, repeated disruptions in global supply chains and growing uncertainty surrounding the long-term reliability of the transatlantic security guarantee have exposed the structural vulnerabilities within Europe’s defence posture. In response, the European Union has accelerated efforts to strengthen indigenous defence innovation, reduce dependence on external suppliers and consolidate a European defence technological and industrial base capable of sustaining military capabilities under crisis conditions.

Initiatives such as the European Defence Fund (EDF), Permanent Structured Cooperation (PESCO), the Strategic Compass and the recent Readiness 2030 (previously ReArm Europe), signal a clear political intent to move beyond declaratory ambition. Whether these instruments can generate scale, coherence and operational impact, however, remains an open and increasingly consequential question for Europe’s security and global credibility.

What does defence technological self-reliance actually mean?

Debates on European defence technological self-reliance are often blurred by overlapping concepts that obscure more than they clarify. In EU policy language, strategic autonomy does not imply full self-sufficiency, but rather the capacity to act independently when necessary and with partners when possible. Self-sufficiency, the ability to design, produce and sustain all critical defence technologies domestically, remains neither economically viable nor strategically realistic for a union of fragmented defence markets. Instead, the EU increasingly gravitates toward a model of managed or interoperable dependence, in which reliance on external suppliers is accepted but deliberately shaped to preserve freedom of action under crisis conditions.

This distinction is particularly relevant in the context of dual-use technologies, where the boundaries between civilian and military innovation are increasingly porous. Artificial intelligence, cyber capabilities, space-based assets and advanced semiconductors are developed primarily within civilian markets but have become indispensable to modern military operations. The EU’s defence ambitions are therefore inseparable from its broader industrial, digital and technological policies, including efforts to secure critical supply chains and foster innovation ecosystems. Defence technological self-reliance, in this sense, is less about insulation from global markets than about securing access, control and resilience across them.

The EU’s institutional toolkit

Under the 2021 to 2027 multiannual financial framework (MFF), the European Defence Fund (EDF) received a budget of approximately €7.3 billion (later increased by €1.5 billion following the mid-term revision), marking the first time the European budget was systematically directed toward military R&D. By late 2025, the Commission had committed close to €6.5 billion across five work programmes targeting critical domains including AI, sensors, cyber defence and space. On cross-border cooperation, the record is genuinely strong. EDF consortia typically bring together around seventeen entities from multiple member states, pulling defence SMEs, start-ups and research organisations into collaborative networks that did not previously exist at the European level. The EU Defence Innovation Scheme (EUDIS), a subset of the Fund, has reinforced this through hackathons, accelerators and matchmaking services aimed at lowering entry barriers for non-traditional defence actors. The Fund’s interim evaluation, published in June 2025, confirmed it had driven cross-border defence R&D cooperation at a scale the EU had never seen before, with EDF funding in several smaller member states equalling or surpassing their entire national defence R&D spending.

Its limits, though, are real. An annual allocation of roughly €1 billion remains modest against Europe’s capability gaps. National defence markets remain fragmented, with member states continuing to fund overlapping programmes that dilute the fund’s ability to concentrate resources. More fundamentally, the EDF was built to support research and early development, not procurement or industrial scale-up. No formal mechanism bridges EDF-funded prototypes and national procurement cycles, with administrative bottlenecks (including intra-EU transfer authorisations that have delayed projects by up to a year) further slowing the pipeline. The concern is straightforward; the fund may succeed at generating innovation while lacking the means to turn it into deployable military capability.

On the cooperation front, the Permanent Structured Cooperation (PESCO), launched in December 2017 with twenty-six participating member states and twenty legally binding commitments, was billed as one of the most ambitious frameworks in EU defence history. Its first phase (2017 to 2025) generated eighty-three projects across seven operational domains. Some have delivered: The Cyber and Information Domain Coordination Centre (CIDCC) reached initial operational capability, Cyber Rapid Response Teams (CRRTs) are actively deploying and in the unmanned domain, the European MALE RPAS (Eurodrone) and Next Generation Small RPAS (NGSR) are advancing ISR capabilities. The European Patrol Corvette moved into procurement, with deliveries expected in the early 2030s. A sixth wave of eleven new projects, approved in May 2025, covered air and missile defence, electronic warfare, quantum technologies and medical facilities.

On the whole, though, the record is uneven. Fifteen projects have fallen behind schedule, only half are expected to reach full operational capability by their target dates, and the 2025 Progress Report acknowledged that some projects should be retired or transferred elsewhere. The binding political commitments that once defined PESCO have quietly lost their weight, with limited pressure from capitals to see projects through. The underlying problem is one of design: PESCO was built to be inclusive, prioritising broad participation over concentrated capability outcomes. Member states can join projects without committing the resources needed to complete them. Participation, in other words, was prioritised over integration, and the gap between political commitment and deployable capability remains stubbornly wide.

Critical technology domains and persistent dependencies

Europe’s pursuit of defence technological self-reliance is most visible in a limited number of critical capability domains where EU-level coordination has begun to generate tangible results. EU-supported programmes have accelerated indigenous development in unmanned systems, cyber defence, space situational awareness and command-and-control (C2) architectures, particularly in areas where civilian innovation ecosystems can be leveraged for military use. The growing role of defence SMEs and cross-border industrial consortia, supported by the EDF, has contributed to incremental progress in software-driven capabilities, autonomous platforms and data-enabled military systems.

Yet these advances coexist with deep and persistent external dependencies. Europe remains structurally reliant on non-EU suppliers, primarily the United States, for advanced semiconductors, high-end software, cloud and data infrastructure, key intelligence, surveillance, reconnaissance (ISR) and space-based assets. Such dependencies extend beyond procurement and shape interoperability standards, system upgrades and operational decision-making. Recent supply-chain disruptions, exacerbated by the COVID-19 pandemic, Russia’s war against Ukraine and the recent tensions with the Trump Administration, have highlighted the vulnerability of access to critical components under crisis conditions.

The central challenge, therefore, is not the absence of technological competence but the lack of control, resilience and scalability. Without secure access to foundational technologies, Europe’s progress in higher-level defence systems risks remaining contingent on external political and industrial decisions beyond EU control.

Structural constraints

For all the momentum surrounding EU defence cooperation, fragmentation remains the system’s default setting. National protectionism continues to shape procurement choices, as member states privilege sovereignty and domestic industrial interests over efficiency. The result is a crowded landscape of overlapping platforms, duplicated capabilities and missed economies of scale, which undermines both interoperability and readiness at a time of acute strategic pressure.

This structural inertia is reinforced by a persistent gap between political ambition and industrial capacity. At EU level, initiatives such as the Strategic Compass and the Mario Draghi agenda on European competitiveness argue for bolder integration, joint procurement and a move beyond strict intergovernmentalism. Defence therefore remains intergovernmental at its core, limiting the EU’s ability to translate strategic rhetoric into operational capability. Until authority, resources and incentives are better aligned, fragmentation is likely to continue outpacing integration.

Strategic partnerships

Over the past two years, the European Union has expanded its engagement in security and defence by concluding nine Security and Defence Partnerships with partners ranging from Moldova and Norway to India in January 2026, while discussions are ongoing with Switzerland and Australia. These non-binding agreements have become a key instrument of EU foreign policy, enabling flexible and durable cooperation in an increasingly transnational threat environment. By aligning strategies, resources and industrial capacities, the EU enhances its credibility as a security actor and increases its strategic autonomy, while also recognising that contemporary security challenges cannot be addressed unilaterally.

The EU’s security depends not only on internal capability development through initiatives such as SAFE and Readiness 2030, but also on the multiplication of capabilities through external partnerships. Cooperation with Japan and South Korea has strengthened high-tech and dual-use industries, linking political dialogue with concrete collaboration in areas such as AI, cybersecurity, maritime and space security. Similar dynamics are visible in partnerships with Canada and Norway, which enhance interoperability and crisis-management capacities in key strategic regions, notably the Arctic and the transatlantic space. These agreements have also enabled non-EU partners, such as the UK, to participate in EU defence mobility and industrial programmes, illustrating their practical added value.

The effectiveness of these partnerships, however, remains closely tied to the EU–NATO relationship. NATO continues to act as the primary security anchor for Europe, providing deterrence, operational credibility and strategic coherence, particularly in response to Russia’s war against Ukraine. While concerns over duplication and alliance cohesion can constrain EU initiatives, complementarity with NATO remains essential. EU strategic autonomy can only be developed alongside the Alliance, by reinforcing European capabilities and interoperability in ways that strengthen collective defence rather than undermine it.

From aspiration to capability

Defence self-reliance demands that the EU stop treating defence as a policy silo. The technologies driving modern military advantage (AI, quantum computing, advanced semiconductors, space and cybersecurity) are developed overwhelmingly in civilian markets, governed by industrial and digital frameworks that have long operated at arm’s length from defence planning. The White Paper for European Defence (Readiness 2030), presented in March 2025, took an important step by framing defence readiness as bound up with the EU’s broader industrial competitiveness agenda. In December 2025, the Council adopted a regulation amending five key programmes (the Digital Europe Programme, the EDF, the Connecting Europe Facility, STEP and Horizon Europe) to channel them more effectively toward defence activities, and the Defence Industry Transformation Roadmap proposed opening EU research infrastructures, including JRC facilities, AI factories and semiconductor pilot lines, to defence innovators. These go beyond new funding lines; they signal a shift toward treating defence as a scale problem woven into the EU’s wider technological fabric.

Europe’s most pressing operational deficit is not a shortage of ideas but a failure to move successful R&D into fielded systems at scale. Closing that gap is the ambition of the European Defence Industry Programme (EDIP), adopted by the Council in December 2025 with a €1.5 billion budget for 2025 to 2027, covering the full supply chain from R&D through production and procurement to disposal. Alongside it, the Security Action for Europe (SAFE) instrument, adopted in May 2025, provides up to €150 billion in long-maturity loans for urgent, large-scale procurement of priority defence products. SAFE requires that procurement involve at least two participating countries, forcing convergence and building interoperability into purchasing decisions from the outset. By early 2026, nineteen member states had expressed interest, requesting support beyond the available budget. Whether these instruments can close the structural gap between cooperative R&D and industrial production will depend on execution, but the financial architecture is now in place.

A realistic pathway to defence self-reliance must accept that full independence is neither achievable nor desirable. The question is not whether Europe will depend on external partners, but whether those dependencies are managed deliberately. Three strategic choices define this approach: Co-development, to share the costs and risks of advanced programmes, co-production, to embed European firms in international supply chains on favourable terms and interoperability, to ensure jointly acquired systems function across allied forces without locking Europe into a single provider. EDIP’s requirement that at least sixty-five percent of component costs originate from within the EU or associated countries reflects this logic. SAFE reinforces it by allowing countries with EU Security and Defence Partnerships, including Canada, Japan, South Korea, Norway and the United Kingdom, to participate in joint procurement. The integration of Ukraine’s defence industry into both instruments, including a dedicated €300 million Ukraine Support Instrument under EDIP, takes this further; turning a wartime partnership into a structural element of European defence capacity. Put differently, autonomy does not require isolation. It requires the political capacity to choose who to depend on, under what conditions, and with what safeguards.

The EU is unlikely to achieve full defence technological self-reliance, and framing this as a realistic objective risks obscuring more attainable goals. European security will continue to depend on alliances, global supply chains and external partners, most notably the United States for the foreseeable future. Yet this reality does not rule out credible strategic autonomy, since what it demands is a clearer understanding of power.

Strategic autonomy can emerge through selective dependence, where reliance is managed and diversified rather than denied, as well as through deeper integration that reduces fragmentation and duplication. Achieving this will require hard political trade offs, particularly on sovereignty, procurement and industrial consolidation. The real risk for the EU is not dependence itself, but the illusion that institutional processes, funding instruments and coordination frameworks automatically translate into power. Without political choices that concentrate authority and resources, ambition will continue to outpace capability.

Disclaimer: The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official position of Neo Institute Europa. The Neo Institute publishes contributions to foster informed public debate. While articles may be reviewed and edited, the author(s) remain solely responsible for the claims, interpretations and conclusions expressed. This content is provided for informational purposes. The Neo Institute Europa shall not be liable for any loss or damage arising from reliance on this article.