Europe debates how to build war-ready economy without going to war

European governments face a strategic paradox: how to prepare their defence industries to rapidly produce massive quantities of drones and other armaments in the event of war without accumulating stockpiles that will quickly become obsolete. 

This unresolved challenge was highlighted by Francois Arbault, the European Commission’s director for defence industry, during the Forum Innovation Défence in Parism, Defense News writes.

“How can we be ready, in that we’re ready to embrace the scale that it takes to be at war, or in a conflict of whatever sort, without actually piling up equipment?” Arbault asked. “That’s probably one of the most core questions that we need to be able to answer today. How is it to be defence-ready, when you are not yet at war?”

Despite higher defence spending across Europe since Russia’s invasion of Ukraine, no EU country has reoriented its entire economy toward a “war economy,” including France, whose president first invoked the term in 2022. Several speakers emphasised that Europe’s challenge is partly psychological: unlike Ukraine, European states are not fighting for survival and therefore do not operate with the same urgency.

As Jérôme Cerisier, CEO of Exosens, put it, Ukraine has something “essential and different from us, and that is they have a need to survive. We’re not as confronted as they are by the need to go very, very fast.”

Arbault similarly noted that Ukraine “has no choice but to frantically scramble” to keep pace with battlefield innovation. Yet Europe cannot simply replicate that wartime mode.

Instead, he said, readiness must account for rapid technological turnover: “readiness doesn’t mean piling up thousand or hundreds of thousands of drones in a warehouse, because if one day we’re attacked, those drones will for sure be totally obsolete.”

One proposed solution is to focus on modular industrial “building blocks.” Marie Nicod of Jolt Capital argued for maintaining stocks of components rather than finished systems:

“From there, we have a mass of things, but which are not immobilised stock, and which will be used for many different use cases.”

Companies like Exosens are already scaling production gradually so they can expand quickly if needed, with Cerisier saying, “We really need to talk about the war economy not necessarily in terms of implementation, but already in terms of preparation.”

Industry leaders stressed that preparation requires both investment and planning. Sylvain Rousseau of Aresia urged simulated surge-production exercises to identify bottlenecks:

“What’s stopping us from tripling our capacity, maybe it’s just a single machine, maybe just one piece of technology.”

But many firms cannot assume risk without predictable future orders, and governments are cautious about funding capacity that might go unused.

French officials echoed these concerns. Olivier Lecointe of the DGA emphasised that accelerating production demands new machines, facilities, and staff, but public spending must be justified: “if we purchase production capacity and then orders don’t come in, it’s actually money down the drain.”

By Sabina Mammadli