Europe’s Rearmament Dividend: Turning Defence into Industrial Renewal

Europe’s defence debate has long been framed as a trade-off: more spending on security meant fewer resources for everything else. Rearmament was treated as a necessary but subtractive fiscal burden. That framing is increasingly misleading. With national defence budgets rising and new EU-level defence funding instruments emerging, the central question is no longer how to finance defence, but how to turn defence investment into military capability while catalysing Europe’s industrial renewal. Realising this opportunity will rely on Europe’s ability to quickly and sustainably expand defence industrial capacity—by repurposing existing civilian and revitalising legacy industrial sites, retaining skilled workforces, and embedding defence production more deeply into its broader economic base.

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