Europe’s defence at a turning point: Guntram Wolff says “Plan B” can’t wait
Monday, 15 December 2025
Europe is facing its most serious systemic challenge in decades. In a new Future is Blue podcast episode, Guntram Wolff warns that Russian aggression, Chinese support for Moscow, and uncertainty about transatlantic ties are forcing Europe to rethink its entire defence model.
Wolff, Senior Fellow at Bruegel and Professor at the Solvay Brussels School of Economics and Management, recently shared his views in SEFO, Funcas’ flagship publication. Speaking with me, he outlined three key messages: Europe has misread Russia’s power, grown dangerously dependent on US high‑tech weaponry, and is moving too slowly to build a credible “Plan B” for its own defence.
[You can listen to our conversation here].A misread Russia and an “axis of autocracies”
For Wolff, this is not just another cyclical crisis but a structural shift shaped by what he calls an “axis of autocracies” — China now effectively aligning with Russia on European security and Ukraine.
“China has sided with Russia,” he notes, making resolution of the war far more difficult given Beijing’s global weight.
Europe, meanwhile, has underestimated Moscow’s strength by using the wrong benchmarks. Economists often contrast Russia’s GDP with Europe’s or individual EU economies like Italy or Spain, Wolff explained, overlooking purchasing power parity (PPP). “In PPP terms, Russia is a bigger economy than Germany,” making it the largest on the continent by that measure — a crucial factor in assessing wartime resilience.
The second misjudgement lies in assuming Europe acts as one. In reality, “European economies are multiple economies,” Wolff said, with no single centre of power. Coordination remains slow and politically complex—especially in hard security, where Europe has relied heavily on NATO and, above all, the United States. With Washington’s commitment now uncertain, Europe’s security foundations look increasingly fragile.
High‑tech dependence on the United States
To quantify Europe’s reliance on American defence systems, Wolff and his co‑authors built a database of US Foreign Military Sales since 2008. Using AI to analyse over 1,200 government notifications, they found a sharp rise in European purchases, especially since Russia’s full‑scale invasion of Ukraine.
In Germany, for example, up to 40% of procurement comes from the US. The real issue, Wolff says, is what Europe buys: “European industries supply low‑ and mid‑tech equipment domestically, while the very high‑end systems are bought from the United States.”
This creates both strategic and economic vulnerabilities. Modern weapon systems depend on software and communications, meaning “you are at risk of dependencies being exploited.” Ukraine’s brief loss of US intelligence support, he recalled, showed the dangers of such reliance.
Economically, Europe also misses out on innovation spillovers. Citing research based on 120 years of US data, Wolff argues that defence R&D creates major growth effects. By outsourcing its most advanced segments, Europe forfeits opportunities to build its own ecosystem of high‑tech firms and dual‑use technologies. “Buying cutting‑edge systems only from the US entails both security and economic disadvantages,” he concluded.
Building a European “Plan B”
So what should this Plan B look like? Wolff is clear: Europe should not abandon the US but must prepare for a scenario where American support wanes. “Keeping the US on board is critical,” he says, “but simply buying more F‑35s is not a sustainable strategy.”
He proposed a dual approach.
First, Europe should focus on emerging technologies such as AI‑enabled systems, drones and autonomous platforms where domestic firms already compete globally. Procurement reform could create predictable demand for European companies — from established players to high‑tech start‑ups in Paris and Munich — simultaneously closing capability gaps and nurturing a continental industrial base.
Second, Europe must tackle its fragmented defence market and rethink financing mechanisms. Today, national procurement still follows a “Germany buys German, France buys French” logic, often defaulting to US suppliers when buying foreign. The result is duplication and limited scale.
An intergovernmental agreement to introduce joint funding, backed by a European‑level fund able to issue debt, should be the way forward. This would reduce the bias for domestic purchases and promote pan‑European projects—particularly in shared infrastructure like satellite systems—where national duplication is wasteful.
“It’s all about creating scale and competition,” Wolff argues. A more integrated market would strengthen Europe’s defence base while lowering costs.
Ukraine as Europe’s frontline
On the politically sensitive question of frozen Russian assets, Wolff is cautious but firm on the principle. “The key is to keep funding Ukraine so it can stay in the fight,” he stressed. European backing has already increased as US support falters, and that trend must continue.
If Ukraine were to lose and come under full Russian control, Europe would face not only Russia but “Russia combined with Ukraine” — armed with newfound military expertise. “The strategic importance of Ukraine for Europe cannot be underestimated,” Wolff warned. His message is clear: “Find a way of funding Ukraine,” even if the legal instrument is still contested.
[The full conversation is available here]