Europe is racing to rearm – but Russia will be ready first

EUROPE

Ukraine’s success exposes a stark truth: Europe may need the urgency of war to overcome the industrial constraints, fragmented procurement and vulnerable supply chains holding back its defence ambitions.

EUROPE plans to pour EUR 800 billion into defence by 2030 in an historic drive to achieve greater strategic autonomy and prepare for a possible war with Russia.

But analysts warn that money alone cannot rapidly create the factories, skilled workers, secure supply chains and political unity needed to turn that ambition into military capability.

Ukraine, meanwhile, has expanded its defence production capacity fiftyfold under sustained Russian attack, offering Europe both a model for rearmament and an uncomfortable warning about what achieving it may take.

But Magdalena Lembovska Young, a Europe analyst at Sibylline and co-author of a new report on the continent’s defence sector, says headline spending figures provide a misleading measure of progress.

“The amount of money itself does not translate into outputs,” she says. “We cannot simply compare how much Europe, Russia or the US is spending because each system is completely different in how it produces defence capabilities.”

Europe’s defence industry was built to meet limited peacetime demand, not replace equipment and ammunition at the rate required by a prolonged conflict.

“Europe’s defence industrial base has operated for a long time on the assumption that we live in peacetime,” Lembovska Young says. “We now need to transform the entire system to prepare for a high-intensity conflict.

“We need to move from ‘just in time’ to ‘just in case’ supply chains.”

European rearmament is also exposed to supply chains extending far beyond the continent. China dominates the processing of several critical minerals used in drones, missiles and electronics, while advanced semiconductors are principally manufactured in Taiwan and South Korea.

The task extends beyond increasing production of existing weapons. Europe remains heavily dependent on the US for intelligence, surveillance and reconnaissance, satellites, strategic airlift, nuclear deterrence and elements of integrated air and missile defence.

Should Washington substantially reduce its contribution to European security, replacing those capabilities could require an additional EUR 302 billion in annual defence spending, according to the report.

Lembovska Young says Europe could continue buying proven American equipment. But strategic autonomy is also about ensuring that reliance on Washington does not restrict Europe’s freedom to act on trade, energy or foreign policy.

“The question is not only whether US capabilities will be available, but at what cost,” she says. “Security dependencies can be exploited to extract concessions, influence policy or keep Europe on its toes.

“Strategic autonomy is not only about whether we can do something on our own. It is about whether we maintain the autonomy to make choices and decisions in other areas.”

Russia’s invasion has already forced Ukraine to undertake the industrial transformation Europe is only beginning to contemplate.

Karan Vassil, a Europe analyst at Sibylline and report co-author, says Ukraine’s annual defence production capacity is estimated at around USD 55 billion in 2026, approximately 50 times its pre-invasion level.

This expansion has taken place despite almost daily Russian attacks on Ukrainian defence facilities. Western assistance has been indispensable, but Vassil says the threat to Ukraine’s survival has allowed battlefield necessity to supersede commercial considerations.

Ukraine has also compensated for its lack of Russia’s geographical depth by forming joint ventures and establishing production outside its borders.

“Russia benefits from the strategic depth of its territory,” Vassil says. “Ukraine is attempting to create virtual strategic depth by establishing production platforms outside the country through joint ventures with Western companies.”

Its domestic success is founded on a decentralised network of smaller manufacturers with close links to frontline troops. Weapons can be tested in combat, modified and returned to the battlefield far faster than would be possible under Europe’s conventional procurement system.

“The journey between battlefield experience, the testing of new technology and its production is very short,” Vassil says. “Ukraine can quickly identify what works, discard what does not and deploy successful systems at scale.”

Europe, by contrast, remains divided among national markets with competing requirements, procurement systems and industrial interests. Governments frequently regard defence spending as a means of protecting domestic jobs as well as acquiring military capability.

The collapse in June of the Future Combat Air System, the fighter programme pursued by France, Germany and Spain, demonstrates the consequences. Disputes over industrial leadership and national priorities ended almost a decade of cooperation, leaving competing European aircraft projects likely to chase the same investment and orders.

“FCAS collapsed after nearly ten years,” Vassil says. “That is ten years lost.”

Competition also prevents manufacturers achieving the scale and predictable demand enjoyed by US counterparts. Although European investor attitudes towards defence have shifted significantly since 2022, smaller companies continue to struggle for private capital.

This matters because start-ups and small and medium-sized enterprises are often better able than established defence primes to exploit rapidly developing drone, artificial intelligence and electronic warfare technology.

“Large companies have competing priorities and must make programmes in which they have invested for years profitable,” Vassil says. “Smaller companies have much greater freedom to embrace new technologies.”

Europe is expected to expand domestic processing and “friend-shore” supplies to trusted partners. But new mines, processing plants and semiconductor facilities require years of investment, regulatory approval and workforce development.

Political support cannot be assumed either. Lembovska Young says voters farther from Russia often struggle to perceive the threat as acutely as those on NATO’s eastern flank. Governments with strained public finances must therefore connect higher defence spending to jobs, investment and wider economic benefits.

She dismisses 2030 as a realistic deadline for strategic autonomy, describing it instead as an ambition that will take decades. Russia, meanwhile, is already conducting grey-zone operations across Europe and would almost certainly use any ceasefire in Ukraine to reconstitute its forces.

“We are talking about being ready by this date or that date,” Lembovska Young says. “But is Russia going to sit and wait for us to get ready?”