The European Defence Fund precursor programmes and the state of the European market for defence

ABSTRACT

The fragmentation of the European defence market hampers the establishment of a unified European defence. The European Union (EU) has implemented initiatives like the Coordinated Annual Review on Defence, Permanent Structured Cooperation, and the European Defence Fund (EDF) to address this issue. However, a comprehensive understanding of the European defence market and its consolidation, which is essential for evaluating these programs, remains insufficient. This article aims to observe the configuration of the European defence market and its evolution over time, exploring potential trends towards consolidation. The authors contend that despite the fragmented nature of the European defence market, a few larger companies from four countries hold significant positions. They also identify a positive trend towards consolidation, although institutional incentives perpetuate market fragmentation. To delve deeper, the authors analyze the funding allocation for defence companies through the preparatory programs of the European Defence Fund. Their analysis encompasses 65 projects awarded to 430 companies between 2016 and 2020, supplemented by insights from three focus groups and an expert survey conducted in the Netherlands, Italy, and Sweden. This article suggests avenues for future research on the EDF, emphasizing the need for a comprehensive understanding of market consolidation and the efficacy of current initiatives.

KEYWORDS:

• European Union
• European defence
• consolidation
• European Defence Fund
• EDF precursors

Acknowledgments

This research is part of JEDI – Joint Effort for the Defence Industry, funded under the EIBURS scheme of the European Investment Bank Institute. The authors thank the participants in the European Integration Colloquium at the University of Groningen for their comments on a draft version of the article and the valuable contributions from the anonymous reviewers, which have significantly improved the article. All errors remain our responsibility.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Supplementary material

Supplemental data for this article can be accessed online at https://doi.org/10.1080/14702436.2023.2277440

Notes

1. The EU contribution for the EDIDP and for four of the PADR projects are estimates obtained by dividing the total EU contribution by the number of participating companies.

Additional information

Funding

This work was supported by the European Investment Bank Institute [EIBURS].

Notes on contributors

Francesco Giumelli

Francesco Giumelli, Francesco Giumelli is Associate Professor and deputy head of Department at the Department of International Relations and International Organization (IRIO) of the University of Groningen. Francesco Giumelli is the Chair of the Cost Action Globalization, Illicit Trade, Sustainability and Security (GLITSS) and the coordinator of the Illicit Trade Group (ITG) at the University of Groningen. He is the author of The Success of Sanctions: Lessons Learned from the EU Experience (Routledge, 2013), Coercing, Constraining and Signalling: Explaining UN and EU Sanctions After the Cold War (ECPR Press, 2011) and various other studies on sanctions purposes, effectiveness and implementation. His areas of expertise are international sanctions and illicit trade. He is currently doing research on the evasion and circumvention of international sanctions. He can be reached at [email protected].

Marlene Marx

Marlene Marx, Associate Researcher at the University of Groningen. She can be reached at [email protected].