Defence industrial ties within Europe are in a state of limbo, illustrated by half-baked commitments between the EU and the UK to work closely in defence despite deep-seated political divisions.
There is a need for the continent to work together as one to boost its defence market competitiveness and to operate in unison against Russian aggression. This ambiguity is best represented by competition between two sixth-generation fighter programmes.
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The Global Combat Air Programme (GCAP) among Italy, Japan and the UK will develop separately from the French, German, and Spanish Future Combat Air System (FCAS) project.
Surprisingly, the European Commission gave its blessing to the newly formed GCAP joint venture between BAE Systems, Japan Aircraft Industrial Enhancement, and Leonardo in early June 2025.
During a panel discussion on 5 June at the Polish Embassy in London, hosted by the Council on Geostrategy, Dr Michael Martin Richter, head of the London Bureau at the Hanns Seidel Foundation, claimed that there may be political reasons behind the decision but “economically speaking it probably means the wrong move”.
Industry competition
“I think we [continental Europe] should compete with the world around us, especially in critical industries [such] as the defence industry,” Richter contends. “We have to pool our resources, be smart about them, as smart as possible, because there are also economies of scale.”
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By GlobalDataThe UK government has been clear in its position that GCAP is fundamentally a “national endeavour” under Team Tempest, according to the former Minister for Defence Procurement, James Cartlidge, now the Shadow Defence Minister, in an evidence session in 2024.
This perspective was maintained in the UK’s Strategic Defence Review (SDR), published last week, which claimed GCAP supports over 3,500 British jobs, sustaining a skilled workforce for the UK’s combat air industry.
The UK has invested £2bn ($2.72bn) into GCAP as of May 2025. This will also explore a teaming concept between the crewed GCAP fighter alongside autonomous collaborative platforms.
Meanwhile, Airbus, a leading industry player in the European FCAS programme, revealed in Berlin last year that it is internally pursuing a similar integrated concept, leveraging artificial intelligence assistance and a combat cloud platform.
“If we replicate capabilities, if we have different countries focusing on the same issue, they have smaller production capabilities and this also drives the cost,” Richter added.
No political cohesion
However, Europe is making some headway in cultivating a competitive defence market in the past three years since the full-scale Russian invasion began.
In 2024, the EU presented its first ever defence industrial strategy. They plan to increase joint procurement and ensure the value of intra-EU defence trade represents at least 35% of the value of the EU defence market, among other pursuits.
Yet, coordination of collective defence is largely centred around Brussels while there are limits set on cooperation with the UK, which is outside the EU.
As part of the recent EU-UK trade deal, both sides merely agreed to kick the can down the road with no tangible cohesion other than a commitment to negotiate further on Britain’s potential accession into the Security Action For Europe (SAFE) regulation, which could open up a large portion of €150bn ($169bn) in defence loans to the country.
At the same time, the UK still identifies the Euro-Atlantic as its region of focus in a world of global animosity. The SDR identified several areas in which it could work with Europe, including prepositioning British Army resources on the continent and coordinating joint development of long-range systems, albeit at a bilateral level with EU member states such as Germany.
