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Can EU outpace Russia in arms production in near future?
Defence Express analyzes whether it is a realistic goal for the EU to establish a €100 billion Defense Fund with the aim of surpassing Russia in arms production within 1.5-2 years
According to Defense Express, the allocation of 100 billion euros for armaments, as proposed by the European Commissioner for Internal Market, Thierry Breton, is a substantial amount. However, it represents only 2% of the total defense spending for EU countries. Breton suggests that this fund, intended for the defense investment program, could stimulate joint arms procurement and bolster domestic production.
It's important to note that the 100 billion euros figure is the upper limit, with the aim of allowing the EU to surpass Russia in arms production within 1.5-2 years. To achieve such ambitious plans, the fund would need to generate annual revenues of 100 billion euros.
However, the feasibility of these plans is questionable. Creating such a fund would likely require additional contributions from member countries, considering the EU's annual budget is around €170 billion, with only €20 billion allocated to "foreign and defense policy" in 2022.
Examining EU financial reports on defense spending, it's evident that in 2022, member states collectively spent 240 billion euros on defense, marking a 6% increase from the previous period. This spending represents approximately 1.5% of the GDP (15.8 trillion euros in 2022). If all countries were to meet the 2% defense spending requirement, the total spending would be 316 billion euros, an increase of 76 billion.
Notably, not all defense spending is directed towards weapons production; a significant portion is used to maintain armed forces. In 2022, 20% of the total defense spending in the EU, or €48.6 billion, went toward the purchase of military equipment and weapons, and €9.5 billion was allocated for the development of new weapons. This implies that the EU's actual defense spending is expected to increase to around 340 billion euros, exceeding the 2% of GDP threshold and reaching 2.1% based on 2022 figures.
While achieving these figures might be challenging, it signifies a step toward meeting the 2% defense spending norm. Nonetheless, the goal of surpassing Russia's arms production could pose challenges in converting funds into weapons, requiring rapid deployment of new production facilities and expansion of existing ones. The objective might also be achieved through effective sanctions against Russia to impede its economy, rather than solely relying on direct military confrontation.
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