EU seeks to shift European arms industry to ‘war economy mode’

The European Commission will propose on Tuesday ways for the European Union to boost its arms industry so it can shift to "war economy mode" in response to Russia’s invasion of Ukraine.

Thierry Breton, the European industry commissioner, will lay out proposals to encourage EU countries to buy more weapons together from European companies, and to help such firms increase production capacity, according to EU officials.

"We need to change the paradigm and move into war economy mode. This also means that the European defence industry must take more risks, with our support," said Breton, previewing the package.

Breton, a French former tech company CEO, has also said the possibility of another U.S. presidential term for Donald Trump - who has questioned Washington's commitments to NATO - means Europe has to do more to protect itself.

"In the current geopolitical context, Europe must take greater responsibility for its own security, regardless of the outcome of our allies’ elections every four years,” Breton said.

Russia’s war in Ukraine has prompted many European countries to increase defence spending.

But EU officials argue purely national efforts are less efficient and want EU bodies to play a greater role in defence industrial policy.

Analysts say the war has made clear that European industry was ill-prepared for some major challenges, such as a sudden surge in demand for large amounts of artillery ammunition.

Breton’s proposals include creating a European version of the U.S. Foreign Military Sales scheme, opens new tab, under which the United States helps other governments to buy from U.S. arms companies.

Another proposal would allow the EU to compel European weapons firms to prioritise European orders in times of crisis.

To become reality, the proposals will need approval from the EU’s 27 national governments – which have often been reluctant to cede power on defence and military matters – and the European Parliament.

The proposals will also be studied closely by NATO, which has said it welcomes EU efforts to help European defence but warned they must not duplicate or clash with the transatlantic alliance's work.

Reuters