Stay informed with the latest trends in health, business, tech, travel, lifestyle, and more. Explore expert tips, creative ideas, and global insights—all in one place
AFTER AMERICA announced on March 3rd that it is suspending military aid to Ukraine, it looks increasingly likely that Ukraine will have to depend on Europe. Donald Trump might be persuaded to reverse the suspension, for instance if Volodymyr Zelensky agrees to sign a deal on its minerals industry. A statement by Mr Zelensky on March 4th said that he was ready to sign, and to start peace talks, though it is not clear what Mr Trump’s response will now be. But the events of the last few days suggests that relying on America for weapons is no longer wise. A back-up is surely needed.
Could Europe fill the gap? On March 4th the European Union announced a programme to “Rearm Europe”. And even notoriously cynical financial markets are betting on a response of sorts. The combined market capitalisation of big European defence firms such as BAE Systems, Rheinmetall and Thales has soared by €40bn ($42bn), or 21%, in the past ten days. These firms are expected to raise their capital investment significantly in the next two years. That reflects optimism that defence spending will rise and that Europe’s military-industrial complex will be reinvigorated. Whether all that translates into a substitute for American aid for Ukraine is far less clear.
Start with money. Although it has given Ukraine €132bn in military and financial aid (more than America’s €114bn), Europe’s big countries could afford to do more. Over the past three years Germany and Britain have allocated less than 0.2% of one year’s GDP to Ukraine, about the same as America has. France, Spain and Italy have managed only half that. Christoph Trebesch of the Kiel Institute, a think-tank, points out that Germany spends three times as much subsidising diesel fuel. Europe has frozen €210bn of Russian assets, which could also be seized to help Ukraine.
As well as individual countries signalling a rise in defence spending as a share of GDP, on March 4th the head of the EU Commission, Ursula von der Leyen, announced the Rearm Europe plan. It aims to unlock up to €800bn ($845bn) by relaxing the EU’s debt rules so that members can boost annual military spending by 1.5% of GDP towards a new target of around 3.5%; creating a €150bn loan fund for programmes such as anti-missile systems; allowing more of the EU’s own budget to be spent on defence; and tapping bond markets and allowing the European Investment Bank to finance military projects. The plan will not immediately raise new funds but it could galvanise higher spending in time.
How will more cash change Europe’s defence posture and the course of the war in Ukraine? The good news is that Ukraine is not about to run out of crucial weaponry. Unlike in early 2024, when a freeze on aid by America’s Congress created severe difficulties, Ukraine should be able to keep fighting into the summer without fresh American supplies. An American officer says that the Biden administration shipped a lot of materiel before Mr Trump’s inauguration.
Ukraine is also rapidly expanding its own defence industrial base. During the Soviet era it had a mighty arms industry. Mr Zelensky has claimed that around 40% of battlefield needs are being met through domestic production, often in joint ventures with American and European defence firms, such as Rheinmetall, of Germany and the Franco-German KNDS. Sir Lawrence Freedman, a British strategist, puts the figure even higher. Ukraine’s defence firms focus on producing drones of all shapes and sizes, electronic warfare systems and artillery.
Europe can funnel cash using an approach pioneered by Denmark in which it finances contracts between the Ukraine government and Ukrainian manufacturers. Last year Denmark in this way bought 18 domestically-produced Bohdana howitzers for the Ukrainian army. Ukraine’s defence firms are fast-moving. Nico Lange, a former chief of staff in Germany’s defence ministry, says you can buy three Bohdanas for the price of a French Caesar gun, admittedly a more capable system.
Yet America was until this week still providing a large chunk of Ukraine’s military aid, the elimination of which will gradually cause serious strains. Because Europe emptied its military stockpiles early in the war, it will struggle to give Ukraine armoured fighting vehicles, howitzers and precision munitions. Tom Waldwyn, an expert at the International Institute for Strategic Studies, says: “There is no point in rummaging around in a cupboard that has already been scraped clean.”
Europe’s defence industry is not expanding fast enough to fill key gaps. Sir Lawrence says the kit America has provided, such as Patriot interceptors and HIMARS rocket launchers, “is at the high end in quality”. Along with intelligence and logistics support, this is hard for Europe to replicate quickly. Cranking up complex, multinational programmes takes time. Eric Béranger, the boss of MBDA, a missile-maker that had record order books last year, admits that a system like the Franco-Italian Aster air-defence missile had been “developed in an era where time was not important”. Since 2022, however, “suddenly, brutally time matters”. The delivery time of the Aster has been cut from 42 months, but is still 18 months.
Plugging the gaps by buying off the shelf from abroad, often from American or South Korean companies, is tricky. Mr Waldwyn says that much of South Korea’s production over the next few years is already earmarked either for Poland, which has signed $16bn-worth of contracts since 2022, or for the country’s own armed forces. Good luck persuading Poland, which sees itself as a front-line state and has raised defence spending to 5% of GDP, to defer purchases of tanks and missile launchers.
Buying from America would appear to be the obvious step and one that the notoriously transactional Mr Trump might approve of. But Keir Giles, author of “Who Will Defend Europe?”, warns that if Mr Trump continues to regard Ukraine as the main obstacle to his peace deal, he might refuse American firms export permissions or demand limitations on the capabilities of any weapons they sell.
By far the best bet, says Mr Giles, is for Europe to use its own cash to invest heavily in Ukraine’s own defence companies. They are working at the cutting edge and know how to get new equipment to the front line within weeks or months. As one EU official notes: “Europe realises that it cannot produce the weapons that Ukraine needs. The easiest way to fill the deficit is for the Ukrainians to do it themselves.”
As for western Europe’s own defence, which America no longer seems committed to, the struggle is just beginning. Their armed forces, hollowed out by decades of neglect, have yawning capability gaps that must somehow be filled if America suddenly withdraws critical “enablers”. These include aerial refuelling, heavy lift, logistics and both airborne and space-based intelligence, surveillance and reconnaissance. In addition, Europe is going to have to invest a lot in ground-based precision strike capabilities and air defence. For all of that, the EU’s package is not going to be enough. But it could be a start.
