It is rare for a niche industry conference to dominate global headlines, but the recent Munich Security Conference may be an exception. During the event US Vice President J.D. Vance scolded European leaders for relying too heavily on American military might and claimed Europe needs to ‘step up in a big way to provide for its own defence’. His speech was met by a war of words from many European capitals, but it has set alarm bells off across the continent. And they may have reason to worry.
Are we spending enough on defence?
Commenting at the time, MD One Managing Partner Will McManners was right to suggest that ‘whilst the US have long made clear their position regarding European NATO expenditure; the abrupt manner of delivery, within the backdrop of a highly concerning state of European security, has placed the message at the forefront of the market’.
But European leaders might be looking at the wrong solutions. Despite the Trumpian rhetoric and calls for NATO members to increase defence spending to 5% of GDP, Europe’s weak spot is not capital spending but rather procurement.
Together the EU and UK combined are second only to the US in global defence spending, with a budget significantly larger than Russia’s. Although spending is high, European countries have also struggled to quickly replace depleted weapon stockpiles and deliver on their arms commitments to Ukraine.
This is a problem which afflicts all of Europe. A report by the UK’s House of Commons Defence Select Committee found the British Army ran out of ammunition eight days into a US wargaming exercise. Former Belgian commander Marc Thys has claimed Europe’s defence industry needs between ‘five to seven years’ to deliver at scale and serve as an effective deterrent.
