EU industry chief urges defence retooling for long Russia standoff

The European Union must adapt its defence strategy for a drawn-out standoff with Russia, EU industry chief Thierry Breton said on Friday, adding that the war in Ukraine is increasingly about which side can muster the most industrial capacity over time.

The European Union must adapt its defence strategy for a drawn-out standoff with Russia, EU industry chief Thierry Breton said on Friday, adding that the war in Ukraine is increasingly about which side can muster the most industrial capacity over time. The European Commission is due to announce next week a European defence industry strategy and a new European defence investment programme (EDIP).

"We're going to need to maintain an industrial balance of power," Breton told journalists in Paris. The EU commissioner added that the determining factor in the war in Ukraine had shifted from which side had the biggest weapons stocks to who has the capacity to produce more. The new strategy, to be announced probably on Tuesday, is aimed at better sharing resources and supply chains among EU members while smoothing out bottlenecks and providing more financing.

The French former tech CEO had suggested in January that 3 billion euros could be squeezed out of the current five-year EU budget running until 2027, but negotiations are still underway. More funds could become available if there is agreement to use the interest income on Russian assets under sanctions in the European Union.

Additionally the plans to be announced next week are likely to call for measures to lift constraints on the European Investment Bank financing defence projects. Breton said European defence spending would far surpass Russia's once EU countries belonging to NATO increase their defence budgets to the 2% of GDP required of the military alliance's members, generating an extra 140 billion euros per year.

He has previously called for additional joint EU financing of 100 billion euros, which Breton said on Friday could be half-focused on building industrial capacity and half on joint projects in areas such as space, aerospace and cybersecurity. While that is a longer-term target, he said that support was building among member states although Germany still had to be convinced to get on board.

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