While Europe is debating its new security strategy in Brussels, member states are already busy rearming at home. As a reaction to Russia’s invasion of Ukraine, NATO’s European members have agreed to increase their defence spending and started an unprecedented buying spree on the defence market. While on its own this is a good thing, in some capability areas these national procurement decisions will shape European defence policy whether policy makers in Brussels agree with them or not.

In order to ensure stable transatlantic relations in the post-Cold War era, procurement decisions faced a significant tradeoff. While factors such as capability and availability continue to be considered, others such as the impact on the defence industry were often overlooked. Europe remained a consistent buyer of U.S. defence products; This relationship is no better demonstrated than in the period of 2020-2024, where European NATO members spent 64% of their procurement budget with U.S. suppliers. However, while European countries represented a significant portion of the American defence industry’s international clientele, most cases don’t evolve beyond the transactional buyer-seller stage.

This was not a major concern until the war in Ukraine began to deplete significant amounts of munition and vehicle stockpiles. To further complicate Europe’s changing defence landscape, the Trump administration stated its intention of holding back cutting-edge capabilities from allies and reducing troop numbers in Europe. The political need has risen for sovereign European defence capabilities. While this is a welcome change, some areas of defence will have a harder time to adapt than others due to decades of reliance on U.S. weapons systems and infrastructure.

The European capability gap is quite apparent in exo-atmospheric (above the atmosphere) Ballistic Missile Defence (BMD), where the entire kill-chain runs through U.S.-manufactured systems. In 2025, Russia deployed Oreshnik Intermediate-range ballistic missile (IRBM) systems to Belarus, and conducted a demonstration strike against Ukraine in November 2024 using inert warheads. No European sovereign system currently deployed can intercept an IRBM threat at exo-atmospheric altitudes.

The core of European BMD is the two Aegis Ashore installations in Poland and Romania, complemented by the U.S. Destroyer group stationed in Rota, Spain. Both the ships and the ground-based installations utilise American SM-3 interceptors, with the Aegis Ashore sites holding 24 interceptors each, enough to engage roughly a dozen incoming warheads before needing to be reloaded. The destroyer force has expanded from its original four ships, and expects a 6th destroyer by the end of the year; but it has increasingly been drawn to the Middle East as a response to the ongoing Iran conflict.

The only sovereign capability in Europe is in detection with the SMART-L radar developed and manufactured by Thales Nederland; it can detect and relay tracking data through the NATO communication network, that allows other systems to target and destroy threats. Detection and tracking are part of the ABM kill chain, but defence experts have concluded that there is no European sovereign targeting radar capability above the SAMP/T air defence envelope; for targeting data and interception Europe depends on U.S. systems. This leaves Europe without exo-atmospheric ABM capability of its own. Both the Aegis Ashore installations and Arleigh Burke-class destroyers are operated by U.S. troops, utilising U.S. radars, Command and Control, and interceptors.

The U.S. has been vocal about wanting to reduce its footprint in Europe. The destroyers in Spain providing critical magazine depth and a second mobile layer of ABM in Europe may quickly become part of a U.S. drawdown. Furthermore, SM-3 interceptors are only produced by the U.S. and Japan, and even with elevated production rates the U.S. has been burning through its interceptor stockpiles in Iran at an alarming rate, with some estimates having the expenditure rate as high as 50%. With delivery timelines rising up to a little over five years, replenishment will be no easy task. During this time, the main BMD supplier for Europe will be critically constrained. This is not a theoretical risk in the future; this is the situation that Europe needs to be aware of.

For its next-generation frigates (F127), the German Navy (Deutsche Marine) has selected the AN/SPY-6 radar system equipped with Lockheed Martin’s Aegis command and weapon control system. Germany will be the first foreign integrator of the AN/SPY-6. This will create a decades-long dependency for the German navy on U.S. suppliers. In addition to the Germans, the Dutch navy (Koninklijke Marine), is considering the Aegis and AN/SPY systems. However, unlike Berlin’s decision, domestic producers are also being put into consideration.

The AN/SPY-7 is advertised by Lockheed Martin as “interoperable with major radars and defense platforms”. Independent experts say it is virtually impossible to integrate European missiles with the SPY-6. This immediately moves this technical decision into a defence industrial and strategic question of whether European-made missiles will ever be fitted to Aegis-equipped vessels. The Netherlands faces the question of whether to join with Germany and adopt the AN/SPY-6, and lock itself in with U.S. missile supply, or order the AN/SPY-7, which will provide them future flexibility. This and many other seemingly small decisions are being made in the Ministries of Defence every day, with long-term strategic implications not being discussed on a wider scale.

Using U.S. systems is not inherently an issue; they are capable and battle-tested. The issues come from the buyer-seller relationship Europe has settled into in many areas. Japan also equipped its warships with the Aegis Combat System and was able to negotiate a partnership in co-development of the SM-3 Block IIA. Mitsubishi Heavy Industries produces components of the missiles, and Japan also proposed domestic SM-6 production.

Japan and the U.S. recently agreed to co-develop a new Glide Phase Interceptor against hypersonic threats, with a 50-50 workshare in the final product. Japan will produce critical components for these missiles. By fostering a partner relationship in defence industry, Japan can leverage domestic production and will have leverage when supply is constrained compared to allies who are simply buyers. Europe has secured industrial partnership with the U.S. in certain capability areas before, but rarely as a procurement condition, and never for the naval missile systems it now relies on. Europe is beginning to address an issue Japan solved decades ago.

European sovereign BMD capability is now being discussed seriously. Consortia have formed for detection and endo-atmospheric (within the atmosphere) interception under Permanent Structured Cooperation (PESCO e.g. TWISTER) and European Defence Fund (EDF e.g. HYDEF, HYDIS2 ) frameworks. Five European states signed a letter of intent to establish Bliksem EXO, aiming to create Europe’s first sovereign exo-atmospheric interceptor. A kill vehicle test is aimed for 2027, but there is no confirmed funding, procurement commitment, or in-service date yet. Both HYDEF and HYDIS2 sit around Technology Readiness Level (TRL) 3. An operational interceptor would be TRL 9. The most optimistic timeline for a European endo-atmospheric interceptor is 2035. The exo-atmospheric layer has no confirmed in-service date. The development pace reflects the investment behind it.

The EDF was intentionally designed to be a research instrument, not a procurement one. This was reasonable in 2021, but insufficient for the urgency of 2026. The structural problem is not the total budget, but who is funding it. HYDEF has a total budget of €110 million, €100 million from EU taxpayers through EDF, and €10 million from the five participating member states; industrial investment is absent. The companies that would eventually manufacture and profit from a fielded interceptor have not contributed financially. In commercial R&D, private co-investment in early-stage research signals that industry believes the research will eventually produce something worth pursuing. Private co-investment is not only a funding mechanism; it is a commitment signal.

This is reinforced by the funding structure. EDF reimburses eligible project costs, at a 100% rate for research activities, and at up to 80 to 100% for development activities, with only prototyping funded at a lower rate of up to 55%. For large defence companies, the most rational strategy is to maximise reimbursable costs rather than contribute private capital whose return depends on an uncertain procurement down the line. For SMEs, EDF grants can function as R&D revenue, with participation optimised around reimbursable activities, pushing them towards administrative rather than technological contributions. The result is a project framework optimised for maximum Commission funding rather than producing operational capabilities. The money flows, the projects happen, and no one has capital at risk in the outcome.

When Germany equips its F127 frigates with American interceptors and procures Arrow 3 from Israel for exo-atmospheric defence, it has little incentive to fund European alternatives. Every state that locks into non-European systems reduces the potential market for European programmes. This reduces industry confidence, which keeps private investment low, which keeps TRL low, which keeps the capability gap wide open. The EDF funds the research but cannot break this loop. The letter of intent mechanism requires states to declare an intention to procure the product, but it is not an actual commitment. Without a binding procurement clause attached to EU-funded R&D, European BMD programmes will continue producing research outputs without an operational product. The ambition to build a sovereign European BMD capability now exists at every layer, but the gap between ambition and deployable capability is a decade-wide, and procurement decisions made this year are making it wider.

The post-transatlantic security order that European policy makers now debate will remain a theoretical aspiration if procurement decisions being made today are not addressed. Strategic autonomy cannot be built on American interceptors, fire-control systems and radar architectures. Every SPY-6 decision, every foreign military sale signed without a co-production condition, every EDF programme left without a procurement commitment is a quiet vote against the decoupling that European policy circles argue is necessary. Europe may spend the next decade debating strategic autonomy while silently making it impossible with national procurement decisions. Partners grow together; buyers get left behind.