Brussels has a new buzzword.
A quick look at recent EU discourse shows this clearly. From Niinistö to Draghi and von der Leyen, EU leaders have framed joint procurement as the solution to Europe’s fragmented military landscape. The promised benefits are sweeping: cheaper equipment, better interoperability, and a stronger European defence industry. In the long run, perhaps a Europe independent from the U.S. for its security needs.
Yet, as buzzwords often do, “joint procurement” hides a complex world of intricate, interlinked processes and creative EU-speak acronyms. When Europeans hear that EU states will be “buying together,” what kind of arrangements does that involve? And are they all truly as efficient as EU officials have recently claimed?
In short, what does joint defence procurement really mean? 
Talking together?
Before buying anything, it is probably a good idea to know what is needed. The first stop on the way to true joint procurement is about identifying gaps together—what kinds of capabilities European armed forces collectively lack, and where it makes sense to cooperate.
The EU states already have several tools for this:
- The Coordinated Annual Review on Defence (CARD) compiles national defence plans in 2-year cycles to spot overlaps and gaps.
- The Capability Development Plan (CDP) sets long-term priorities based on changes in geopolitical settings, recently focusing on air defence or cyber resilience.
- Permanent Structured Cooperation programs (PESCO) provide a framework for states to commit to projects together, from medical command centres to next-generation drones.
However, these programs have produced only a few concrete outcomes. With fragmented industry schedules and electoral changes, enforcement of collaborative plans (even those that governments have explicitly endorsed!) is hard to come by. Industry professionals have long called for greater supranational involvement as a key solution to coordination problems.
On the other hand, the most recent CDP shows some promise, with the member states signing formal letters of intent for greater cooperation last year. And the proposal for a centralized Defence Industrial Readiness Board (DIRB) under the Commission shows that the states may be thawing on their opposition to supranational involvement in defence planning.
For now, the old adage holds: talk is cheap.
Funding together?
Thankfully, European action on defence has not been all talk. Another step towards jointness runs through funding mechanisms, which aim to provide financial incentives through collective reinsurance among member states and the European defence industry. In the past few years, the EU has put its money where its mouth is through various financing mechanisms:
- The European Defence Fund (EDF), with nearly €8 billion disbursed directly to selected private companies or consortia involving at least 2 member states, covering up to 100% of collaborative research costs and up to 80% for prototype development.
- The Act in Support of Ammunition Production (ASAP), with a budget of €500 million in grants distributed to private companies active in explosives, powder, shells, missiles, or prototype testing.
- The European Defence Industry Reinforcement through Common Procurement Act (EDIRPA), with a budget of €310 million in grants, disbursed to groups of at least 3 member states aiming to develop a common defence capability.
- The proposed Security Action for Europe (SAFE) fund, with €150 billion in Commission-backed loans for groups of member states procuring European defence capabilities together. Despite early criticism, the fund has received significant interest from the member states.
The programs have been fairly successful, with significant take-up and praise from the industry. It is clear that the appetite for joint funding of defence projects is rising, with possible savings from €18 billion to €57 billion per year.
Yet, there is clear room for improvement. On the financial side, these programs represent a drop in the global waterfall of defence expenditures. On the political side, the programs are only temporary—and hence susceptible to deadlock down the line.
One thing is clear: in Brussels, as in most places, money talks.
Procuring together?
Beyond common fora and collective funding mechanisms, for most people, the term ‘joint procurement’ invokes a model in which contracts are tendered, negotiated, and signed together. In recent memory, Europeans have already had direct experience with the EU’s flagship joint procurement project—Covid-19 vaccines.
In defence, joint procurement projects occur in two distinct models:
- The “lead nation” model, where a country procures on behalf of itself and all other participating states. A recent successful example of such projects is the Common Armoured Vehicle System (CAVS) project, led by Finland on behalf of Nordic countries, Germany, and the UK. A less successful variation of this model is the Future Combat Air System (FCAS), a French-German-Spanish collaboration on a 6th-generation fighter jet, which has struggled with deadlock and delays.
- The “procurement agency” model, where an international organization or institution procures on behalf of its member states. In the EU, the European Defence Agency (EDA) has recently stepped into this role with its Collaborative Procurement of Ammunition, negotiating contracts for 155mm artillery shells on behalf of all 27 member states, Norway, and, crucially, Ukraine. The EDA also provides a forum for programs such as CARD or PESCO mentioned above.
Such arrangements involve centralized, specialized bureaucracies with the power to sign contracts on behalf of the participating states, utilizing collective bargaining power and economies of scale to achieve price-per-unit reductions. With such potential benefits, one must wonder: why doesn’t this happen all the time?
Well, for one, the European system of joint defence procurement is fragmented among multiple procurement agencies, each applying its own complex procurement rules. Besides the EDA, the Organisation Conjointe de Coopération en Matière d’Armement (OCCAR) involves most Western European states (including the UK) and manages some of Europe’s largest collaborative programs. Alongside them is NATO’s Support and Procurement Agency (NSPA), which specializes in off-the-shelf procurement of arms, ammunition, and support equipment.
Any efforts at harmonizing these procurement agencies are hampered by the usual suspect—politics. Attempts at integrating OCCAR as a procurement agency within the EDA were stopped with Brexit. On the other side, the membership of the U.S. and Turkey within NSPA poses an insurmountable challenge for EDA-NSPA integration.
It is also important to understand how the agreements for joint procurement come to be. An integral and widely used aspect of them is principles such as ‘juste retour’ or ‘global balance,’ also known as economic offsets. These are political deals that involve assigning a percentage of the production of a particular joint project to the domestic industry of a participating state. Industry professionals have been highly critical of such agreements, mostly due to their obvious economic efficiency and added administrative complexity. Studies have shown that economic offsets can increase the cost of joint defence projects from 33% to 100% of the initial price, negating a majority of the promised efficiency gains of joint action.
However, the existence of joint defence projects may be entirely dependent on the inclusion of these deals within them. Economic offsets allow the participants to bring important investments and employment to their domestic defence industries. This can be particularly motivating for states that only have a few defence contractors, and as such, they depend on economic protectionism to remain competitive.
Policymakers are hence faced with a crucial dilemma: while they want both the economic efficiency and the domestic benefits of joint procurement, they can only have one at the expense of the other.
Recent rhetoric would suggest that EU leaders are focused on selling joint procurement as a measure of efficiency. However, the distribution of production across national defence industries is likely to remain as a key sticking point in future joint defence projects—as highlighted by the current rows around the FCAS fighter jets. European leaders ought to address this dilemma clearly, or risk repeating the same mistakes again.
Two words, many meanings
When EU leaders discuss joint procurement, they clearly mean very different things—from aligning plans to co-financing projects, negotiating contracts, or even sharing ownership. This complexity reflects the need to tie together the strands of gap analysis, funding, and procurement into a more coherent framework.
The proposed European Defence Industry Plan (EDIP) and plans for a Defence Omnibus may be the answers. For now, understanding the existing distinctions is essential for judging how ambitious the latest proposals really are.
It is undeniable that the geopolitical reality requires the EU to produce more joint action. As this article has shown, it is necessary to question how this action will come about. Is centralization in Brussels the only way to capitalize on “Europe’s moment?” Are the benefits of joint procurement, such as reduced costs, increased interoperability, and a strengthened European defence industrial base, automatic, as many seem to imply?
For now, true joint procurement—in the deepest sense of the word—remains the exception, not the rule. For a safer Europe, this ought to change.
