European defense industry sees record orders amid technological dependency risks

The European defense sector is experiencing a significant surge in activity, with major companies such as Rheinmetall, Leonardo, Airbus, BAE Systems, Thales, and Indra reporting record profits and order backlogs. In the first half of 2026, these industry leaders secured over 83 billion euros in new orders, representing a 50% increase compared to the same period the previous year.

This growth is driven by geopolitical tensions in Ukraine and the Middle East, alongside pressure for NATO members to increase defense spending. Projections suggest European defense investment will exceed 600 billion euros this year, potentially surpassing one trillion euros in the coming decade.

Despite this economic boom, Europe faces critical technological dependencies. While many unmanned aerial vehicles (UAVs) are assembled within the EU, they often rely on American-regulated components, sensors, and targeting systems subject to International Traffic in Arms Regulations (ITAR). This reliance creates operational risks, as the ability to modify or deploy these systems during crises may be limited by external jurisdictions. Achieving strategic autonomy remains a challenge, as the SAFE framework requires at least 65% of component costs to originate from the EU or associated countries, a target difficult to meet due to the continued import of essential subsystems.