Assessment of Progress and Shortcomings in European Defense

Key Chapter Title List

1. Assessing European Defence
2. Addressing Europe's Hardware Gaps
3. Bridging the Software Gap
4. European Integrated Air and Missile Defence: Slow Progress
5. Transforming European Defence Procurement and Industry
6. Defence Financing
7. Capability Profile: Russia's Military Threat to Europe
8. Capability Profile: Improving Recruitment, Retention, and Force Size
9. Capability Profile: Europe's Military Mobility
10. Capability Profile: Filling the Gaps: Europe's Non-NATO Suppliers
11. Capability Profile: Growing Focus on Supply Chains and Critical Raw Materials
12. Conclusion: Towards a European Defence Roadmap

Document Introduction

This report, published by the International Institute for Strategic Studies (IISS) in September 2025, aims to comprehensively assess the progress and persistent critical shortfalls of NATO's European allies in strengthening their own defence capabilities. The report is set against the backdrop of a dual pressure: the dramatic shift in the security environment caused by Russia's ongoing war against Ukraine, and the pressure from the second term of the US Trump administration for Europe to shoulder a greater defence burden. Europe faces the urgent challenge of countering the Russian military threat in the short term (potentially as early as 2027) while simultaneously reducing its traditional security dependence on the United States. To this end, while European nations have begun the process of increasing defence spending and launching new initiatives (such as the "European Sky Shield Initiative" and the ELSA long-range strike project), the report points out that systemic obstacles still need to be overcome to establish genuine strategic autonomy.

The report's structure revolves around an in-depth analysis of five core capability areas. Chapter One focuses on the "Hardware Gaps," pointing out Europe's severe deficiencies in Intelligence, Surveillance, and Reconnaissance (ISR) platforms, space launch capabilities, and long-range conventional land-attack weapons, particularly the lack of ISR assets survivable in contested airspace and independent heavy space launch capabilities. Chapter Two explores the "Software Gap," revealing Europe's deep dependence on US suppliers in the field of military cloud computing (especially hyperscale cloud computing), as well as the challenges posed by a lack of interoperability standards, despite Europe's relative advantage in command and control software. Chapter Three assesses the slow progress of European integrated air and missile defence capabilities, noting the lack of sufficient systems and numbers to cover the full threat spectrum, particularly against hypersonic threats, and the continued primary reliance on the United States for terminal-phase missile defence.

Chapter Four examines the transformation of European defence procurement and industry. Based on IISS data, the report notes that since February 2022, approximately 53% of defence contracts signed by European nations have gone to European systems, but the aerospace sector remains dominated by US equipment (accounting for about 64% of contract value). Countries are attempting to accelerate procurement and support domestic industry by reforming procurement processes, strengthening intergovernmental agreements, and utilizing new EU tools (such as EDIRPA, SAFE), but issues of national priorities and industrial fragmentation persist. Chapter Five analyzes defence financing, pointing out that although defence spending has increased significantly (nominal spending in 2025 is over 50% higher than in 2022), many allies still face difficulties in meeting NATO's new spending target (3.5% of GDP on defence), and long-term funding commitments and contracts are needed to incentivize industry to invest in expanding production capacity.

The report intersperses several "Capability Profiles," which respectively provide in-depth analysis of the specific composition of Russia's military threat, the challenges Europe faces in personnel recruitment and retention, the logistical and infrastructure challenges of military mobility, the role of non-NATO suppliers, and the growing focus on supply chains and critical raw materials. The final conclusion section states that developing a clear roadmap for European defence is crucial. This requires sustained and sufficient funding, coordinated efforts, procurement reform, and political will to systematically address capability gaps, gradually building a more autonomous European defence capability while maintaining NATO unity.