Europe’s Defense Dilemma: The Gap Between Spending and Strategic Autonomy
Europe is increasing defense spending to Cold War levels via the EU’s 150-billion-euro SAFE loan facility. However, political restrictions on suppliers from the U.S. and Turkey may hinder rapid capability growth, as member states increasingly rely on bilateral deals to bypass EU procurement rules and secure immediate hardware.
The EU’s SAFE instrument provides a 150-billion-euro loan facility designed to build a European defense industrial base and reduce reliance on Washington. This funding arrives as national budgets rise across the continent to achieve strategic autonomy.
Industrial capacity remains a bottleneck. According to the provided report, Europe cannot establish artillery, air defense, and drone capacity within three years because production lines and skilled labor were run down for three decades.
Why is Turkey excluded from EU defense funds?
Turkey is structurally shut out of the SAFE facility because it has not been offered a Security and Defence Partnership with the EU. This partnership is the only way non-members can join joint procurements.
France has pushed to keep SAFE restricted to EU members and block the use of Turkish weapons, including those for Ukraine. Additionally, a 35% cap on non-EU content limits the use of Turkish subsystems.
Turkish firms specialize in high-volume, competitively priced 155mm shells and drones in the few-million-dollar range. This contrasts with the more expensive systems produced by American and European prime contractors.
How are European nations bypassing EU procurement rules?
Many European capitals are using bilateral deals to acquire capacity that the EU’s sovereign fund excludes. A UK-led contract for 20 new Typhoons, valued up to $10.7 billion, was signed in October 2025, with a support deal following in March 2026.
Germany reversed a pause on Eurofighter sales to Turkey under Chancellor Friedrich Merz. Turkey has also joined the German-led European Sky Shield air defense initiative, and the Turkish manufacturer Repkon is building a 155mm shell plant in Germany.
Other bilateral moves include Baykar’s purchase of Italy’s Piaggio Aerospace and a partnership with Leonardo. Turkish industry also beat a bid from Leonardo to sell 30 trainer jets to Spain, while Poland and Romania already operate Turkish drones.
What role does Israel play in German-Turkish relations?
Germany’s defense ties with Israel may constrain its cooperation with Turkey. Günter Seufert, a former head of the Centre for Applied Turkey Studies at the German Institute for International and Security Affairs, notes Germany is the second-largest supplier of arms to Israel, providing about a third of its imports.
Conversely, Israel is Germany’s second-largest supplier, accounting for around 13% of imports between 2020 and 2024. This relationship deepened in December 2025 when the German air force received Israel’s $4.6 billion Arrow 3 system.
Seufert states these arrangements involve long-term production and technology-sharing in submarines and missile defense. He suggests this close cooperation could affect German-Turkish industrial ties, particularly regarding sensitive technology sharing.
What may happen next for European defense?
Incumbent European firms may see orders re-routed or subcontracted if they cannot fill contracts on time. Value is likely to shift toward joint ventures rather than protected prime contractors.
The connective tissue between European primes and Turkish subcontractors could become a primary growth area for 155mm shells and drone volume. However, political risks remain high.
Contracts could be frozen overnight due to Turkey’s conduct, issues with the S-400, or rule-of-law concerns. Similarly, Germany’s commitments to other allies, such as Israel, may stall future German-Turkish deals.
Frequently Asked Questions
What is the EU’s SAFE instrument?
SAFE is a 150-billion-euro loan facility intended to help EU member states build a sovereign defense industrial base and increase strategic autonomy.
Why is Turkey considered a key supplier for Europe?
Turkey is the world’s 11th largest arms exporter and can produce 155mm shells and affordable drones at a volume and speed that European factories currently cannot match.
How does the U.S. benefit from Europe’s pursuit of autonomy?
Despite the rhetoric of autonomy, European capitals continue to purchase American platforms when they need immediate capability, leading to a significant flow of defense spending back across the Atlantic.
How should Europe balance the desire for industrial independence with the immediate need for military hardware?