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Europe is facing a challenge that no longer allows postponement: it must reinvent itself in Security and Defence in a context of extreme strategic urgency. The clearest proof of that tension is institutional. For the first time, there is a European Commissioner for Defence and Space, while the Treaties — in their ambiguity — continue to assign Defence policy exclusively to Member States.

The paradox is revealing. Strategic reality has moved ahead of the legal architecture. Change is so necessary and so urgent that institutional practice is advancing faster than formal reform.

Andrius Kubilius’ intervention at the Nueva Economía Forum in Madrid on 20 February — introduced by Spain’s Minister of Defence, Margarita Robles, before an audience that included senior military leadership and key representatives of national industry — must be read in that context. It was not a technical speech. It was an acknowledgement that Europe has reached a turning point. And that this time the margin for error is
limited.

A Unique Budgetary Window of Opportunity

Europe’s current necessity is simultaneously an opportunity of a kind it has not had in decades: the convergence of geopolitical pressure, political will and budgetary capacity — primarily national, but also European — to structurally transform its Defence architecture.

Kubilius made it clear: the challenge is no longer merely financial; it is above all organisational.

The increase in resources to which Member States have committed within NATO — and which the EU will support, albeit on a more limited scale — must translate into productive capacity, coherent planning and rigorous execution. This requires acting simultaneously on three levels:

• Industry, which needs scale, stability and predictability.
• Political leaders and public managers, who must structure solid multianual commitments.
• Armed Forces, which must adapt doctrine, planning and demand to a radically different environment.

“The biggest problem is the change of mentality,” the Commissioner stated. The phrase captures the diagnosis. For decades, Europe operated under the assumption that its security was externally guaranteed. That assumption is no longer operational.

Today’s budgetary exceptionalism must serve as a bridge towards the next Multiannual Financial Framework from 2028 onwards. That new cycle will need to consolidate what is currently an urgent reaction into a permanent structural policy. And it must do so under a clear principle: where there is European funding, there must be accountability.

As the Draghi Report highlighted in 2024, Defence can — and must — act as a driver industry for the broader European productive fabric. But that requires European coherence, national backing, strategic vision, discipline and ambition.

National Champions: Integration, Not Concentration

The debate on national champions requires conceptual precision. When asked about them, Kubilius did not oppose their existence. He implicitly acknowledged that size matters in a competitive global environment — particularly when the world’s leading Defence companies are American. But the risk is evident: if not properly articulated, national champions can become bottlenecks rather than integration vectors.

In Spain, this debate is particularly relevant. Indra is positioning itself de facto as a central player in certain strategic domains — especially systems and digitalisation — and plays a key role as national coordinator in European programmes such as FCAS. At the same time, Navantia has consolidated an international reputation as an integrator of complex platforms, demonstrating technological capability and execution capacity in demanding environments. In addition, Spain has a highly competitive aerospace and electronic warfare subsector, with companies and capabilities operating at the core of major European programmes.

The challenge is not to decide who the champion is. The challenge is to ensure that national actors — large and mid-sized — operate within a national and European architecture that promotes scalability and cooperation, particularly in a country like Spain where the industrial fabric is largely composed of highly specialised SMEs.

The paradigm of 27 industries, 27 exclusively national mandates and 27 armies — some of them “bonsais: beautiful, expensive, small and not very effective,” in Kubilius’ own words — is incompatible with European strategic ambition. Fragmentation may have been tolerable in a low-pressure geopolitical environment. Today, it is an operational limit and a structural risk.

The FCAS case, explicitly referenced during the Q&A with mention of Indra’s role and the need to unlock current dynamics, illustrates Europe’s structural difficulty in executing joint Defence programmes with the same effectiveness it has demonstrated in space projects such as Galileo or Copernicus. This is not about assigning blame. It is about recognising that major programmes require robust governance, binding commitments and institutional discipline. Voluntarism is not enough. Every delay is strategic time lost — and time is increasingly scarce.

Ukraine and the Logic of Extended Defence

The war in Ukraine has not only altered Europe’s military balance; it has redefined the very concept of Defence and should serve as a wake-up call for the continent as a whole.

Kubilius recalled that nearly 80% of neutralised targets in the conflict have been destroyed by drones. But the most relevant lesson is not technological — it is organisational: continuous innovation, rapid adaptation and short decision cycles.

The Ukrainian experience demonstrates that Defence can no longer be understood exclusively in terms of traditional platforms. It requires integration between industry, operators and developers; speed in decision-making; and immediate reaction capacity.

This need for continuous adaptation and innovation goes beyond the strictly military sphere.

We are facing a paradigm of Extended Defence. European security no longer depends solely on conventional military capabilities, but also on infrastructure resilience, military mobility — an area in which Commissioner Kubilius is working intensively — the robustness of supply chains and the efficient management of strategic resources (energy, health, essential goods).

Ensuring that European society can function under pressure is the best way to safeguard the integrity of its Member States.

Defence culture must evolve into Defence awareness. Logistics, energy, industry, technology and social cohesion form part of the same strategic ecosystem.

In this context, productivity and delivery agility are not technical variables; they are factors of credibility.

Executive Summary

Where we stand

• In an exceptional moment, with available resources and clear strategic urgency, yet with fragmented structures and processes designed for an environment that no longer exists.

How we got here

• Three decades of external strategic dependence and industrial fragmentation have produced 27 parallel ecosystems with limited operational integration.

What must change

• Turn the current budgetary opportunity into lasting structural reform.
• Integrate national industrial actors into a functional European network, avoiding bottlenecks.
• Provide major programmes with solid governance and institutional discipline.
• Adapt planning and processes to the speed of today’s strategic environment.
• Consolidate in the next Multiannual Financial Framework a Defence industry capable of acting as a driver for the broader European economy.

Europe cannot simply spend more. It must organise better, integrate further and decide faster. And it must do so now.