This paper examines the role of economies of scale in addressing inefficiencies within the fragmented European defence sector. Despite ongoing geopolitical challenges, Europe’s defence industry struggles with duplicated efforts, inflated costs, and a lack of standardisation due to its decentralised structure. The analysis explores the historical roots of fragmentation, evaluates current debates on defence spending efficiency, and outlines strategies such as aggregating demand, increasing joint procurement, promoting consolidation, fostering cross-border collaboration, and reinforcing European preference in procurement. Theoretical insights into economies of scale highlight the potential for reducing costs and enhancing production capabilities, particularly through unified procurement and joint industrial efforts. The study further investigates the constraints faced by both major defence contractors and SMEs, as well as recent European Commission initiatives, including coordinated R&D at the pan-European level. Concluding with actionable policy recommendations, the paper provides a roadmap for consolidating Europe’s defence industry, emphasising the necessity of strategic integration and collective investment to enhance the continent’s strategic autonomy and industrial resilience.