By Anthony Bell

Russian-Ukrainian conflict gives a dramatic boost to the development of the defence market of the European Union member states. Driven by an arms deficit, which was caused by U.S.-EU military assistance to Ukraine since February 2022, Europe’s arms market drastically needs replenishment of its depleted ammunition and weapon stocks. Moreover, this regional market is estimated to be the most lucrative in the foreseeable future. At the same time, it seems to be overcrowded in years to come.

The United States of America and the European Union bear the main burden of military-technical assistance to Kyiv: as of July 31, 2023, Ukraine has received no less than USD 46.8 billion from Washington, and an amount of some USD 65 billion was sent by European countries.

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It is noteworthy that not only do the Western powers allocate some chunks of money to assist Ukraine, but they also send defence materiel in large quantities. Kyiv is known to have taken the deliveries of the following weapon systems:

  • 113 fixed-wing and rotary-wing aircraft;
  • over 35 medium-altitude long-endurance unmanned aerial vehicles;
  • about 600 main battle tanks;
  • 70 light armoured vehicles;
  • 560 infantry fighting vehicles (both tracked and wheeled);
  • 1,190 armoured personnel carriers (wheeled primarily);
  • about 1,000 mine-resistant ambush-protected vehicles;
  • 1,840 4×4 and 6×6 armoured transporters for mechanized infantry;
  • 430 towed artillery systems (105mm – 155mm);
  • 360 self-propelled artillery systems (122mm – 155mm);
  • 105 multiple rocket launchers (122mm – 227mm);
  • 375 towed anti-aircraft guns;
  • 170 self-propelled anti-aircraft guns;
  • no less than 250 launchers of various ground-based air defence weapons.
  • … and artillery ammunition, small arms and light weapons, fire support systems, etc.

Modern weapons (those produced after the collapse of the Soviet Union and the end of the Cold War) account for no less than 45-50% of the aforementioned numbers (in terms of quantity; when it comes to financial volume, they account for 75-80%). Those weapons need to be replaced urgently.

However, the European defence manufacturers are at their lowest manufacturing rates since 1991. According to various estimates, they will have been capable of replenishing the draining stocks of the European NATO members by 2032-2033. This forecast is the most positive; according to the worst predictions, the weapon systems sent to Ukraine (as well as ammunition stocks) would be replaced and replenished by 2040. Thus, the European arms market, which is considered to be rather lucrative (up to 30-35% of the global arms market at its best), drastically needs new weapons – and needs it yesterday.

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This case might spark fierce and even ruthless competition between European and US arms manufacturers. It is no secret that it is Europe that donates most of its weapons (even those of US origins) to Ukraine. The US assistance (even though it is vital) is limited to IFVs, APCs, some 155mm artillery, ammunition and support systems. Moreover, Washington delivers surpluses, while European countries dispatch linear vehicles right from combat units. The pieces of materiel in service must be replaced.

It is not the first attempt of US defence firms to land in Europe. In 2019, the US tried to ban several European programs aimed at the developing of sophisticated weapon systems. According to a notification issued by the U.S. Department of State and reportedly signed by Ellen Lord, Under Secretary of Defence for Acquisition and Sustainment, the implementation of Europe-driven projects aimed at the development of brand-new weapons would result in some economic and political ramifications.

The adoption of the statute of the European Defence Fund by the members of the European Union also irked Washington: according to the document, the EU countries were granted with the right to involve some non-European countries in defence research and development (R&D) processes, with intellectual property belonging to the EU members. The Permanent Structured Cooperation (PESCO) program, which embraces 25 EU state members is also declared to be non-compliant with US goals by Washington.

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The EU’s plans in the defence area pose a threat to the integration of the Transatlantic defence industry and military cooperation within the framework of the North Atlantic Treaty organization, some Washington officials noted.

According to the aforementioned US letter, the development of the EU-driven defence R&D programs will duplicate non-interchangeable defence systems, which is set to dramatically increase the EU’s military expenditures and ramp up unnecessary competition between Europe and the United States. Washington also required European defence manufacturers to limit involvement of non-EU countries in the development of cutting-edge weapon systems.

As of October 2023, the presence of US commercially available defence hardware is mostly limited to Poland (M1 Abrams MBTs, M142 HIMARS rocket launchers, F-35 Lighting II joint strike fighter); some other European nations (Norway, the United Kingdom, the Netherlands, Denmark, Belgium, Finland, Italy, Switzerland). However, the competition between US and European defence firms will definitely step up.

(The author is an independent military analyst)

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