The European Union’s role in European defence industry policy

The European Union has often been described as an economic giant but a political dwarf. It has a security and defence policy, but it is not a military alliance. Despite this, the defence industry has been on the EU’s agenda for years. This development reached a new phase in 2021 when the EU budget included almost 8 billion Euro in a European Defence Fund, strengthened when the EU in 2022 acted decisively to supply Ukraine with arms and ammunition, and strengthened yet again in March 2024 when it presented a comprehensive European Defence Industrial Strategy and European Defence Industry Programme. At first glance the developments may seem counterintuitive. What makes a mainly civilian organisation develop into an actor in defence industry policy? Departing from four dilemmas arising from the specific challenges with ownership of the defence industry and efforts to create a European defence market, this article identifies the challenges that different EU initiatives try to solve, analyses economic, political and strategic rationales of the development, analyses the four dilemmas in light of the development, and discusses how it relates to the EU’s raison d’être with regard to European defence.