The defense sector in the EU reaches "peaks" - 4 thousand companies turnover 325.7 billion euros
The turnover of European defence companies rose by 13.8% last year, with direct employment in the sector also rising to the highest level ever recorded, as Europe rushes to rearm to confront a belligerent Russia, a new report highlights.
Turnover for the 4,000 companies represented by the European Aerospace, Security and Defence Industries Association (ASD) totalled €325.7 billion. Meanwhile, direct employment rose by 6.9% to 1,103,000 people, the highest level on record. The defence sector once again accounted for the bulk of this growth, with 633,000 people.
European Union member states have significantly increased their defense spending since Russia launched its full-scale invasion of Ukraine in early 2022, with intelligence reports warning that Moscow could target another European country before the end of the decade.
As a result, member states spent €343 billion on defense last year, up from €251 billion in 2021.
The European Commission is trying to encourage even more investment in the sector with a series of packages that allow member states more fiscal leeway for defense spending.
The bloc's 7-year draft budget also reflects this change, with 131 billion euros earmarked for defense, up from roughly 10 billion euros in the 2021-2027 budget.
But disagreements continue among member states over whether to prioritize European-made equipment, which may take longer to deliver as production lines shift to war production, or to buy ready-made foreign equipment, and over which capabilities need to be urgently invested in.
EU leaders are expected to endorse an action plan on defence preparedness presented by the Commission in October, which outlines four so-called key projects, including a drone wall as part of an East Wing Surveillance, at a summit later this month.
The EU executive is currently examining plans submitted by the 19 member states that have requested funds from the €150 billion SAFE hedge loan scheme, with the aim of starting to distribute the money by the end of the first quarter of next year.
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