Europe is embarking on a €1 trillion mobilization to rebuild defense-industrial capacity hollowed out over three decades of peace dividends—a staggering investment that raises fundamental questions about whether the continent can actually recreate the military-industrial base it dismantled after the Soviet Union collapsed.
The price tag, reported by the Wall Street Journal, reflects not just the cost of equipment Europe needs to send to Ukraine and replenish its own depleted stocks, but the infrastructure investments required to produce that equipment at Cold War-era scale.
Brussels decides more than you think. This trillion-euro commitment will reshape European economies, labor markets, and political priorities for a generation.
The challenge is existential. Europe faces an aggressive Russia on its eastern border and an unpredictable United States that may or may not honor NATO commitments. For the first time since 1945, European nations must seriously contemplate defending themselves without guaranteed American protection.
That requires artillery shells, missiles, armored vehicles, fighter jets, and air defense systems in quantities Europe hasn't produced since the Cold War ended. More fundamentally, it requires rebuilding the factories, supply chains, skilled workforce, and institutional knowledge needed to produce them.
Europe spent the 1990s and 2000s slashing defense budgets and consolidating defense industries. What had been thousands of firms across dozens of countries became a handful of giants—BAE Systems, Airbus Defence, Rheinmetall, Leonardo, Thales. Efficient, perhaps. Resilient? Not remotely.
The war in Ukraine exposed catastrophic production shortfalls. Europe's combined defense industries could produce roughly 300,000 artillery shells annually when the war began. Ukraine was firing that many shells every three weeks. Russia, despite sanctions, was producing several million shells per year.
European leaders promised to ramp up to one million shells annually. Two years later, production has increased but remains far below that target. The bottlenecks aren't just assembly lines—they're raw materials, specialized components, skilled labor, and the political willingness to sustain long-term production commitments.
The €1 trillion figure encompasses multiple overlapping initiatives. Germany's €100 billion Bundeswehr modernization fund. Poland's massive expansion of its armed forces, including orders for 1,000 Korean tanks and 600 artillery systems. France's military programming law adding billions for equipment and R&D. EU joint procurement of air defense systems and ammunition.
What's unprecedented is the coordination. The European Defence Industrial Strategy aims to ensure these national investments create a coherent European defense-industrial base rather than 27 incompatible national systems.
That means common standards, joint procurement, and—most difficult—agreeing which country's companies get which contracts. Defense industries are intensely political. Jobs, technology, and national security are all at stake. Getting France, Germany, and Poland to agree on tank production is only slightly easier than getting them to agree on farm subsidies.
The skills shortage may be the binding constraint. Europe doesn't have enough welders, machinists, and engineers who know how to build artillery pieces or fighter jets. That knowledge left with the generation that built Cold War arsenals. Training new workers takes years.
Supply chains are equally problematic. Specialized components—guidance systems, advanced sensors, propulsion units—often come from single suppliers. Scaling up requires those suppliers to invest in expanded capacity, which they'll only do with long-term contracts. Which governments are reluctant to sign because defense budgets are political.
The alternative is continuing to rely on America, which has its own production constraints and an increasingly unreliable commitment to European security. Strategic autonomy—the ability to defend Europe without American permission—requires European defense production. There's no shortcut.
The trillion-euro question is whether Europe's political systems can sustain this commitment. Defense spending competes with healthcare, pensions, education, and climate investment. Voters skeptical of military spending will demand to know why artillery factories get priority over hospitals.
The answer—that Europe faces potential Russian aggression and American abandonment—is stark. But it's also true. And European leaders, even those who spent careers cutting defense budgets, now recognize that reality.
Brussels decides more than you think—and this time, Brussels is deciding that Europe needs to relearn how to defend itself.
