Europe’s ‘euro moment’ for defence: From threat to strategy

Shortly after taking office, Donald Trump stated that the European Union was formed “in order to screw the United States”. Javier Solana, former NATO secretary general, former EU High Representative for Common Foreign and Security Policy, and now president of EsadeGeo, recently reminded audiences that the EU’s early institutions were, in fact, bankrolled by Washington’s Marshall Plan. "This is a fantastic change of parameters”, he warned. Something almost unbelievable not that long ago. 

Washington’s growing hostility towards the EU has jolted Brussels, Warsaw, Madrid, Paris and many other European capitals out of their trusting reliance on the US and catapulted them into the same conversation: strategic autonomy is no longer a distant ambition, but a security necessity. EU experts recently gathered at Esade during The European Union Week, where one theme took precedence: Europe must start addressing defence the way it once treated the single currency—by sharing risk, cash and credibility. 

Beyond the hostile attitude of the US President, as war rumbles on Europe’s doorstep, Russia hovers as a potential threat to EU security. Director of the European Union Institute for Security Studies (EUISS), Steven Everts, noted during his keynote speech: “Europe can only be free if it is strong”. 

Forging unity in unstable times

For Monika Sus, Professor at the Polish Academy of Sciences and Visiting Professor at the Center for International Security at the Hertie School, Vladimir Putin and Donald Trump are to be blamed for the convergence of views among Europeans. Hybrid warfare—cyberattacks, disinformation, energy blackmail—means the threat can be now as relevant to Madrid as much as it is to Warsaw. The response, says Sus, is gathering momentum: Paris is considering extending and sharing its nuclear capabilities, and talk of eurobonds for defence—unthinkable five years ago—is no longer met with dismissal. 

The European Commission has even drafted a €150 billion Security Action for Europe (SAFE) facility: cheap, jointly backed loans to allow member states to jointly buy military kit and keep the orders inside Europe’s factories. 

The price tag nobody likes to discuss

Yet money is only half the struggle. Rearming is expensive, and far-right populist parties thriving across Europe know it. Sus warns that without “a strong and convincing narrative at national and local level”, these actors will try to convince the public that the spending on defence systems is unnecessary and unbearable. 

Despite the growing convergence of views, there is still public anxiety about trade-offs, especially in countries far from the front lines such as Spain or France, where part of the public sees defence spending as coming at the expense of social welfare. Recent Eurobarometer surveys show public support for defence-related spending remains uneven across Europe. 

In this landscape, Brussels is proposing to relax deficit rules for defence investment. Commission president Ursula von der Leyen’s €800 billion “ReArm Europe” vision would let states invoke the Stability and Growth Pact’s ‘escape clause’ to reach their defence spending targets. 

Spending smarter and together

From an industry perspective, Rebeca López, Commercial Director on NATO Affairs at Indra, highlights a key point: “The issue isn’t just how much we spend, but how wisely.” López discusses three imperatives: 

• Integration. Wars are no longer confined to the battlefield—they are fought across multiple domains. Therefore, in this new era, Spanish electronic-warfare kits must ‘talk’ to Polish drones and German satellites. EU countries’ military hardware and software must be linked.
• Standardization. NATO specifications and EU programs, such as the European Defence Fund or ASAP give companies a rulebook. “We’re working hard to standardize as much as possible,” López says. This is the only way to avoid duplicating the kit and the cost.
• Resilient supply chains. Advanced manufacturing, novel materials and AI will shorten life-cycles—weapons and systems will become outdated much quicker. Indra, she notes, “has caught the message” and is ramping up production capacity while “making processes more agile and resilient.” 

A coalition of the willing

If EU countries now agree that Europe has to build up its security systems without leaning on the US, then how can Europe make that happen? Who starts spending first? Will other nations follow as promised? 

Solana’s favorite historical analogy is the decision to switch to the euro as a single currency. In 1999, only six EU members scrapped their national currencies; the rest joined later. “Money and security are the most patriotic issues,” he says—and therefore the hardest to handle jointly at the European level. He recommends that the EU begins by allowing a core group of countries to join together with shared arsenals. Qualified-majority voting should be used where possible, and the UK should be kept in the loop through ad-hoc deals. Unanimity in every EU decision, he insists, “has to be defeated.” 

Winning hearts before ballots

Sus and Solana agree on another point: communication. Defence policy cannot live on Brussels jargon alone. The defence sector needs to build public support among the younger generation.  

In the EU, voters must see security as something that protects their way of life—their data, their borders and their values. The perception that military security is just about bombs dropping on a far-off land needs to be challenged.  

How to pay for Europe’s shield

SAFE loans could be the best first step; then, Eurobonds could be the game-changer. Supporters argue that a common instrument would slash borrowing costs for smaller states and show demonstrable political unity across the EU. Sceptics fear a risk of irresponsible spending from individual countries, leaving others to pay off their debts. Critics allude to the risk of mutualization by stealth, whereby countries would be unwittingly forced to share each other’s debt. For now, capitals are split—but the fact that such an idea is under discussion marks a major shift in Brussels budgeting customs. 

Can Europe stand up for itself?

If Europe once managed to mint a new currency in under a decade, can it now build the national security it craves in even less time, before the next Trump presidency or Kremlin gambit puts it to the test? 

If ministers approve the SAFE regulation this year, the first disbursements could arrive by 2026. Whether that will give EU defence chiefs enough financial muscle to loosen their reliance on Washington remains to be seen.