Written by: Nicola Bonsegna
Supervised by: Philip Sääw & Vittoria Montinari
Edited by: Kostantinos Anagnostakis
On 12 April 2025, the European Union (EU) finance ministers, joined by their counterparts from the UK, Norway, and Switzerland, expressed their support for a joint defence fund aimed at collectively purchasing and owning military equipment. The initiative would bring together EU and selected non-EU countries to streamline defence spending and enhance coordination (Strupczewski & Badohal, 2025). This proposal originates from a report by the Bruegel think tank, commissioned by the Polish Presidency of the Council of the EU. Its premise is the urgent need for the EU to achieve strategic autonomy, reversing decades of economic dependencies and fragmented strategic planning. This is deemed essential to effectively respond to contemporary threats, chief among them, a potential attack from Russia (Bortoletto, 2025; Wolff et al., 2025), following the diminishing reliability of the United States as Europe’s primary security guarantor.
Central to the proposal is the creation of a European Defence Mechanism (EDM). It is an intergovernmental fund designed to coordinate procurement efforts and lay the groundwork for a single European defence market, reducing costs through joint ownership of military equipment and lowering the fiscal burden of rearmament on national budgets (Bortoletto, 2025; Soler, 2025). Importantly, membership in the EDM would entail prohibiting state aid and national procurement preferences that benefit domestic defence firms to the detriment of other members, thereby marking a step toward genuine industrial integration (Gros-Verheyde, 2025). Currently, defence procurement in the EU is highly fragmented, resulting in increased costs, limited interoperability, and lost opportunities for economies of scale (Strupczewski & Badohal, 2025). According to the Bruegel authors, existing EU instruments, are insufficient to address the home biases in procurement or to coordinate investment in strategic enablers (Wolff et al., 2025).
The EDM, modelled after the European Stability Mechanism, would be external to the EU legal framework. This design would avoid the need for unanimity among EU member states, and it opens participation to key non-EU partners (Bortoletto, 2025; Strupczewski & Badohal, 2025). Their inclusion would provide access to advanced defence industries and capabilities. The report also proposes a flexible membership model allowing opt-outs for EU states lacking the political or constitutional readiness for deeper integration (Gros-Verheyde, 2025).
Beyond the EDM, the report calls for strengthening the European Defence Agency (EDA), and for expanding Permanent Structured Cooperation (PESCO) initiatives. These bodies would take on expanded responsibilities and oversee planning, procurement, and funding of strategic enablers such as satellite systems, next-generation fighter jets, integrated air defence, and large-scale logistics; all aimed at reducing reliance on US technology (Soler, 2025; Strupczewski & Badohal, 2025).
To finance the EDM, a market-based borrowing mechanism would be created, issuing joint defence bonds (Strupczewski & Badohal, 2025). As Polish Finance Minister explained, this intergovernmental model offers a more effective response to insufficient national defence spending. Crucially, the debt incurred for defence purchases would be recorded under the EDM’s balance, not national budgets, alleviating concerns of highly indebted states about breaching fiscal constraints.
Despite the initiative’s potential, several key member states, including France, Germany, and Belgium, have raised concerns. These governments argue that existing EU instruments, such as the European Investment Bank, the EDF, and ReArm Europe, should be first considered before creating new mechanisms (Strupczewski & Badohal, 2025). As a matter of fact, the EDM would be established through an intergovernmental treaty. However, as highlighted in a critical analysis of the Bruegel proposal, defence-related treaties are often protracted and unpredictable, given that defence industries are closely tied to national sovereignty (Gros-Verheyde, 2025). Moreover, involving the EU, even indirectly, would still require unanimity among all 27 member states, making the project exposed to potential vetoes.
Furthermore, Gros-Verheyde (2025) also criticises the market-oriented logic underpinning the proposal, arguing that defence is not a conventional competitive market. Adding on that, the report is seen as overly focused on the defence industry, neglecting political, legal, and operational realities. As the critic puts it, defence is about defending a state against real or potential threats, a mission rooted in national doctrine, executed by the armed forces, and accountable to democratic institutions, not merely industrial efficiency. Ignoring these dimensions risks producing unrealistic and ineffective solutions.
If implemented effectively, the EDM could mark a turning point in Europe’s efforts to become a credible and autonomous defence actor. However, its success will depend not just on innovative financing and industrial coordination, but also on navigating legal, political, and strategic challenges. If realised, the EDM could signal the most ambitious step toward defence integration, offering a concrete mechanism to pool spending, capabilities, and industrial strength. Yet, this vision must confront enduring structural constraints. Defence remains tightly bound to national sovereignty, and a shared fund challenges the traditional monopoly of member states over military affairs. This raises questions not only about efficiency but also about strategic coherence, command structures, and political legitimacy.
Ultimately, the EDM should be viewed as a platform to test new models of cooperation, financing, and capability development. Its success will depend on institutional design, political will, and a shared understanding of Europe’s strategic interests. If these conditions are met, the EDM could shift Europe’s approach from a consumer of security to a proactive and sovereign provider of it.
Bibliography:
Strupczewski, J., & Badohal, K. (2025, April 12). EU ministers positive on defence fund to ease debt concerns. Reuters. https://www.reuters.com/world/europe/eu-considers-defence-fund-ease-debt-concerns-military-gear-2025-04-12/
Bortoletto, F. (2025, April 8). Defense: EU opens door to involvement of third countries in European Defense Mechanism. Eunews. https://www.eunews.it/en/2025/04/08/defense-eu-opens-door-to-involvement-of-third-countries-in-european-defense-mechanism/
Soler, P. (2025, April 7). EU mulls new defence funding mechanism with third countries to boost military readiness. Euronews. https://www.euronews.com/my-europe/2025/04/07/eu-mulls-new-defence-funding-mechanism-with-third-countries-to-boost-military-readiness
Gros-Verheyde, N. (2025, April 10). Are the Bruegel report and its European defense mechanism interesting? Answer: No. B2 – The Daily Life of Geopolitical Europe. https://club.bruxelles2.eu/en/2025/04/analysis-what-to-think-of-the-Bruegel-report-and-its-European-defense-mechanism/
Wolff, G. B., Steinbach, A., & Zettelmeyer, J. (2025, April 7). The governance and funding of European rearmament. Bruegel. https://www.bruegel.org/policy-brief/governance-and-funding-european-rearmament
