New report warns of Europe's slow rearmament amid rising Russian military power

A recent report by the Kiel Institute, an independent foundation in Germany, provides a sobering assessment of European rearmament efforts in the wake of the ongoing war in Ukraine. Titled Fit for War in Decades: Europe's and Germany's Slow Rearmament Vis-à-vis Russia, the report uses a newly constructed database, the Kiel Military Procurement Tracker, to analyse military procurement trends in Germany and benchmark them against both Russia's surging military production and historical German military capabilities.

Russian military production surge

The authors find that Russian military production has dramatically increased since 2022, enabling the creation of three new armies with a combined capacity of up to 20,000 troops. Furthermore, at current production rates, Russia could replenish the entirety of Germany's military equipment stock in approximately six months.

The report's analysis of Russian production focuses on key ground warfare systems such as tanks, infantry fighting vehicles, artillery, and air defence systems, which are crucial for both offensive and defensive operations.

• The authors estimate that Russia produces or refurbishes up to 130 tanks per month, significantly exceeding European production levels.
• Production of other essential ground warfare systems, such as infantry fighting vehicles and artillery, has also surged.
• Additionally, Russia's access to North Korean artillery shells has enabled it to maintain a high daily firing rate, exceeding European production capacities.

The report also raises concerns about Russia's growing arsenal of hypersonic weapons, which pose a significant threat to European security due to the lack of effective countermeasures.

Inadequacy of European procurement

In contrast to Russia's robust military buildup, the report finds that European procurement efforts remain insufficient.

• While German military procurement has seen a moderate acceleration since 2022, the quantities ordered are proving slow to address the existing capability gaps.
• For example, at current procurement rates, it would take until 2121 for Germany to replenish its artillery howitzer stocks to 2004 levels, and until 2066 for main battle tanks.
• Furthermore, a significant portion of German procurement has been dedicated to replacing equipment donated to Ukraine, meaning actual German military capabilities have barely increased.

The report attributes the sluggish European rearmament effort to several factors:

• Years of underinvestment in defence: Following the end of the Cold War, European countries, particularly Germany, drastically reduced their defence budgets, resulting in a shrinking defence industry.
• Fragmented European defence market: The report argues that the European defence market remains fragmented, leading to small orders, high unit costs, and a lack of key weapon systems. This fragmentation is attributed to national industrial policy preferences that prioritise domestic producers over cross-border collaboration.
• Bureaucratic procurement processes: The report criticises German government procurement processes as being slow and bureaucratic, hindering agility and speed in acquiring necessary equipment.

The report concludes with several policy recommendations for accelerating European rearmament:

1. Increase the number of units ordered: The report stresses the need for European countries to order larger quantities of key weapon systems to address capability gaps and benefit from economies of scale.
2. Increase defence budgets: Sustained increases in defence budgets are necessary to fund larger equipment orders and provide certainty for the defence industry to expand production capacity.
3. Integrate the European defence market: The report advocates for greater integration of the European defence market to reduce reliance on imports, increase competition, and lower unit costs.
4. Reform procurement processes: Streamlining procurement processes is essential, the report argues, to increase agility and speed in procurement of military equipment.
5. Focus on technological innovation: The report highlights the need for a clear focus on technological innovation, particularly in areas like hypersonic weapons, to address evolving military threats.

These recommendations align with ASD’s calls for a comprehensive rearmament strategy that delivers clear demand signals to the defence industry, fosters a more unified European defence market, and prioritises technological advancement.