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European Defence Industry Posts Strongest Growth in Years as Calls Rise to Prioritise Home-Built Equipment
Europe’s defence sector recorded one of its strongest years on record, with industry leaders urging EU member states to favour European-made military equipment as the bloc ramps up rearmament in response to Russia’s ongoing aggression.
According to the annual report released by the Aerospace, Security and Defence Industries Association of Europe (ASD), turnover across its 4,000 member companies rose 10.1 percent in 2024 to €325.7 billion. Defence activities drove the surge, expanding by 13.8 percent to reach €183.4 billion. Civil aviation grew at a slower pace of 6 percent.
The boom in production has been matched by record hiring. Direct employment in the sector increased by 6.9 percent to 1,103,000 workers — the highest figure ever recorded. Defence-related jobs accounted for the bulk of the gains, rising 8.6 percent year-on-year to 633,000.
ASD President and Saab CEO Micael Johansson said the sector’s momentum reflects Europe’s broader geopolitical concerns. “Our sectors are not only vital to Europe’s economy. They are essential for Europe’s security, connectivity and resilience, ultimately for its sovereignty at a time of fast-shifting global dynamics,” he said. He stressed that the EU’s next multiannual budget must prioritise industrial investment to maintain competitiveness and strategic strength.
Defence Spending Surges Across EU
EU member states have sharply boosted their defence budgets since Russia’s full-scale invasion of Ukraine in 2022. Combined defence spending across the bloc reached €343 billion last year, up from €251 billion in 2021. Intelligence assessments have warned that Russia could threaten additional European countries before the decade ends, prompting governments to speed up procurement and expand production capacity.
In response, the European Commission has launched measures to accelerate defence manufacturing, including easing fiscal limits on defence spending and reducing regulatory barriers for companies. The proposal for the EU’s next seven-year budget allocates €131 billion for defence, a significant jump from the roughly €10 billion assigned in the 2021–2027 cycle.
Yet divisions remain among member states over whether to prioritise domestically produced European systems — which often face longer delivery timelines — or to purchase off-the-shelf foreign equipment to boost readiness more quickly. The debate is set to continue at an upcoming EU summit, where leaders are expected to adopt a defence readiness roadmap featuring key “flagship” initiatives such as an Eastern Flank drone wall.
The Commission is currently reviewing applications from 19 member states seeking financing from the €150 billion SAFE defence loan programme, with first disbursements anticipated by the end of the first quarter next year.
ASD Secretary General Camille Grand welcomed rising budgets and closer industrial collaboration but stressed the need for consistency. He warned that sustained investment is necessary to prevent repeating past cycles of underfunding. He added that a substantial share of defence procurement continues to go to non-European suppliers, underscoring the importance of strengthening “supply chain sovereignty” to ensure that European spending reinforces Europe’s own industrial base.
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EU Must End ‘Naivety’ on Trade and Confront China’s Industrial Strategy, Says French Minister
France’s Minister for Foreign Trade, Nicolas Forissier, has called on the European Union to abandon what he described as “naivety” in its approach to global trade, urging a tougher stance on countries accused of distorting markets through industrial policy and trade practices.
Speaking in an interview with Euronews’ 12 Minutes With programme, Forissier said Europe must respond more firmly to what he described as the weaponisation of trade dependencies, warning that China in particular could damage its own long-term interests by undermining European industry.
“The Chinese have to understand that they won’t win anything if they destroy the European industry and then the European market, which is an essential market for them,” he said. “We must no longer be naive.”
His comments come as the European Commission prepares to hold an “orientation debate” next week on how to respond to a surge of low-cost Chinese imports. The discussion is expected to shape possible new trade defence measures, with further talks likely when EU leaders meet in Brussels in mid-June.
Forissier said the shift in thinking was not limited to China alone but applied to any country using commercial leverage to gain strategic advantage. “It is not only China,” he said. “It is all the countries that weaponise trade.”
Among the proposals under consideration is a requirement for EU companies to diversify supply chains, sourcing components from at least three different suppliers in order to reduce dependency on any single foreign market. Asked whether he supported such a measure, Forissier replied: “Yes, we have to.”
Other options include targeted tariffs on sensitive industries such as chemicals, alongside stronger use of anti-dumping and anti-subsidy tools to counter imports priced below domestic market levels. These measures are designed to address concerns over overcapacity in China’s industrial sector and its impact on European manufacturers.
The debate is taking place against a backdrop of widening trade imbalances. EU goods imports from China exceeded exports by €359.3 billion in 2025, marking an increase of nearly 20% compared with the previous year.
China has already warned it could retaliate if the bloc imposes new restrictions, raising concerns about potential escalation in trade tensions between two of the world’s largest economies.
France has repeatedly pushed for a more assertive European trade policy, arguing that state subsidies, export controls on raw materials and industrial overproduction in major economies are distorting global markets.
Forissier stressed that Europe must maintain open dialogue with Beijing while defending its own industrial base. “We try to respect the Chinese,” he said. “The Chinese have to respect us, and this is the message European institutions have to send.”
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