France and Germany fail to reach an agreement on European defense, and the dispute affects strategic military projects

France and Germany have been unable to reach a common position on the future of European defense, and their differences are beginning to affect strategic military projects. The dispute is unfolding amid Russia’s war against Ukraine, the reduced U.S. military presence in Europe, and China’s growing ambitions.

Paris is calling for European defense funds to be directed primarily toward the European defense industry and is advocating a stricter “European preference.” The European Commission has proposed €131 billion for defense, security and space through the new European Competitiveness Fund. France wants to limit exemptions from the rule that at least 65% of equipment financed through European programs must be produced in Europe.

Berlin argues that EU countries must rapidly strengthen their capabilities and be able to purchase equipment from NATO allies such as the United States, the United Kingdom, Canada and Norway. Germany is cooperating with U.S. industry to produce Patriot systems and Tomahawk missiles under license.

The differences have already had consequences. In June, France and Germany abandoned plans for the FCAS fighter jet, valued at approximately €100 billion. The disputes also cast doubt on the MGCS project, aimed at developing a new generation of tanks, while Berlin is separately developing a satellite communications system worth around €10 billion, competing with the European IRIS2 network.