What may at first appear to be a financial and regulatory impasse in fact reflects a much deeper political and economic divide. To prevent funds allocated by the European Commission to support the defence industry (1) from ultimately boosting the revenues of US companies — particularly under German or Polish banners — the French government, through the Directorate General of Armaments (DGA), is gradually putting in place a fallback strategy that amounts to a form of “opportunistic capability-based minilateralism”.
The geopolitical fault line: Defence procurement as transatlantic life insurance
The current deadlock in Brussels reflects two fundamentally incompatible visions of Europe’s security. From Paris’s perspective, EU defence funding should remain strictly conditional on purchasing equipment designed and manufactured within the EU-27 (2). In the Élysée’s view, this is the sine qua non for building genuine strategic autonomy and strengthening the European Defence Technological and Industrial Base (EDTIB).
Berlin and its allies take the opposite view. Their main argument is operational urgency: responding to the Russian threat, they contend, requires buying equipment immediately “off the shelf”, regardless of where it comes from.
But the underlying motivation is more existential. For countries such as Germany, Poland, the Netherlands and the Baltic states, rearmament is above all a way of meeting Washington’s increasingly insistent demands for greater burden sharing within NATO.
By channelling large shares of their defence budgets towards the US military-industrial complex, these countries are pursuing the same objective: buying themselves a form of political life insurance intended, as far as possible, to preserve the US military presence and security umbrella in Europe. “Reflecting defence policies geared towards reinforcing the transatlantic relationship, these purchases of US weapons are seen as a guarantee of interoperability with the United States and regional allies.” (3)
The industrial Trojan horse: How Berlin is partnering with Washington at Paris’s expense
This geopolitical rationale goes hand in hand with a formidable economic ambition. Germany is no longer simply buying US military equipment. With Washington’s direct support, it is building — largely under licence, since it has little time to develop combat-proven systems of its own — a hybrid military-industrial complex, positioning itself as a major distributor and subcontractor for US defence companies in Europe. This “transatlantic alliance” allows Germany to shore up a manufacturing base weakened by the crisis in its automotive sector, capture neighbouring countries’ defence spending and gain substantial market share at the expense of its competitors, particularly France.
The Patriot air-defence supply chain: Through the COMLOG joint venture with Raytheon, MBDA Deutschland manufactures Patriot GEM-T missiles under licence in Germany. Through Berlin’s European Sky Shield Initiative (ESSI), more than twenty European countries are being drawn towards US and Israeli air-defence systems such as Patriot and Arrow 3, putting intense commercial pressure on the Franco-Italian SAMP/T (Mamba) system.
GMARS artillery: In an effort to outcompete European multiple-launch rocket systems, Rheinmetall has partnered with US defence giant Lockheed Martin to co-produce the GMARS system in Germany, effectively squeezing out any prospect of a sovereign European alternative.
F-35 aerostructures: While selecting Lockheed Martin’s fighter to replace its Tornado fleet, Berlin also secured an agreement under which Rheinmetall is building a state-of-the-art plant in Weeze, North Rhine-Westphalia, to manufacture F-35 centre fuselages for the global market.
Germany is therefore waging a methodical campaign of industrial competition. Under the banner of Atlantic integration, it is revitalising its industrial base by becoming a preferred partner of the Pentagon. From the French perspective, the unacceptable risk is that the European Commission may ultimately legitimise this model by using EU taxpayers’ money to fund German-American programmes that would, in turn, marginalise major French defence groups such as Thales, Dassault and Naval Group.
German and US flags flying at the entrance to a military base in Rhineland-Palatinate / 2019
The end of bilateral illusions: The unravelling of FCAS, MGCS and MAWS
Berlin’s increasingly assertive strategy is also bringing an end to the myth of the Franco-German “engine” in defence. Its flagship joint programmes — launched, admittedly, without sufficient preparation on 13 July 2017 — have steadily run into trouble.
The collapse of FCAS: The Future Combat Air System and its next-generation European fighter, the NGF, which was intended to enter service around 2040, have been undermined by deep industrial and doctrinal disagreements between Dassault Aviation and the German arm of Airbus Defence and Space. Disputes over technological leadership, France’s refusal to transfer know-how relating to flight-control systems, and Germany’s simultaneous purchase of F-35s have pushed the partnership towards a breaking point.
The slow demise of MGCS: The Main Ground Combat System, intended to replace France’s Leclerc and Germany’s Leopard 2 tanks, has run into similar difficulties. Rheinmetall’s entry into the original KNDS partnership between Nexter and Krauss-Maffei Wegmann, combined with Berlin’s commercial push to sell the Leopard 2A8 across Europe, has paralysed the programme and pushed delivery ever further into the future.
The collapse of MAWS (Maritime Airborne Warning System) : This programme was intended to jointly develop a new-generation maritime patrol aircraft by 2030-2035 to replace France’s Atlantique 2 and Germany’s P-3C Orion fleets. As with FCAS, however, the project was abandoned after Germany decided to purchase US-made Boeing P-8A Poseidons. France is now developing its own sovereign solution, the Airbus A321 MPA.
These repeated setbacks have convinced Paris that seeking bilateral consensus with Berlin — like trying to secure a majority among all 27 EU member states in Brussels — leads only to damaging delays and one-way transfers of sovereignty. “When we tried to define a European label, we realised that our interests were not aligned. It was the technical work surrounding the EU’s new financial instruments (4) that exposed just how incompatible our positions were,” says a senior French Ministry of the Armed Forces official, speaking on condition of anonymity. Without naming Germany directly, the official adds: “We came to understand that the objective of our main partners was to secure manufacturing market share, with little concern for sovereignty.”
The DGA pivot: Minilateralism and frameworks outside the EU
The Directorate General of Armaments has therefore embraced a radical change of course: circumventing the European Commission and its Directorate-General for Defence Industry and Space (DG DEFIS), whose limited depth of expertise and bureaucratic constraints are seen as ill-suited to the procurement and management of complex weapons systems, particularly in the context of a wartime economy; and building an agile, intergovernmental defence architecture capable of operating beyond the reach of US industrial influence and the veto of governments opposed to European preference. “The DGA’s new Europe unit (…) is intended to drive this strategy in coordination with its Directorate for International Cooperation and Export. The structure would thus oversee balanced partnerships between European states, on terms shaped by Paris rather than dictated by the Commission.” (5)
This fallback strategy relies on several proven instruments:
Using OCCAR
The Organisation for Joint Armament Cooperation provides an ideal legal framework. As an intergovernmental organisation operating independently of the EU treaties, it sits outside Brussels’ direct control and allows coalitions of willing countries — including non-EU members such as the United Kingdom — to launch major programmes such as the A400M transport aircraft, FREMM frigates and the Tiger helicopter. It also helps limit the geographic “sprinkling” of industrial workshares that can influence the Commission’s allocation of grants and loans to member states and their companies. Under OCCAR, industrial returns are assessed globally and over the long term, providing greater flexibility in allocating industrial workloads and striking the best possible balance among participating states.
Building a network of strategic bilateral treaties
French defence diplomacy is increasingly relying on robust bilateral political agreements: the revival of the Lancaster House Treaties with the United Kingdom, the Quirinal Treaty with Italy, the Barcelona Treaty with Spain, a defence cooperation framework agreement with Sweden, a mutual defence partnership with Greece and an intergovernmental agreement with Belgium (6). Together, these arrangements create capability-based axes of cooperation insulated from what Paris sees as “Atlanticist manoeuvring”.
The diplomacy of “user clubs”
To counter the financial firepower of the German-US axis, the DGA is building on the network of countries already operating French military equipment. By bringing these states together into “user clubs”, France can pool maintenance and operational-support costs while financing future technological upgrades through a more direct framework. The Rafale Club is the clearest example. Faced with the dominance of the F-35, the French fighter has brought together EU member states such as Greece and Croatia, prospective European partners such as Serbia, and major international customers including India, Egypt, the United Arab Emirates, Qatar and Indonesia. This critical mass supports the long-term industrial economics of Dassault, Thales and Safran, while helping fund the F5 standard and its stealth drone without relying on EU financing. The same model is being applied to the Caesar artillery system and the Mistral 3 surface-to-air missile.
ANPC: France’s answer to Foreign Military Sales
At the heart of the DGA’s approach is a sovereign contractual mechanism known as Achat au Nom et Pour le Compte de (ANPC), inspired by the US Foreign Military Sales (FMS) system. Under this model, the French state acts as a purchasing authority on behalf of a partner country through a Framework Arrangement. “Many countries are asking for government-to-government, or ‘G-to-G’, agreements: we make the purchase and then deliver the equipment to the countries that have mandated us. We have carried out ANPC transactions with seven European countries, mainly for Mistral and Caesar systems.” (7)
One major advantage of this system is that government-to-government agreements can legally exempt procurement from the competitive-tendering requirements imposed by the 2009 EU Defence Procurement Directive. Through ANPC, the purchasing country gains direct access to the prices negotiated by the DGA.
Towards a battle-ready defence industrial base
Faced with the prospect of an EU budget that would implicitly endorse Germany’s position and that of other opponents of European preference — by multiplying exemptions to the principle in the name of compromise — France has decided to develop an alternative architecture.
This DGA-led “Plan B” marks a clear break with what officials increasingly see as the previous “religion of cooperation”. Confronted with the fact that many of its partners prioritise US weapons purchases in order to anchor Washington’s security commitment, Paris is unwilling to see the EU budget subsidise the decline of its own industrial base.
By layering a network of pragmatic alliances, operational user clubs and government-to-government contracts on top of EU mechanisms, France is, in effect, choosing to build a parallel European defence structure — one in which the survival of its defence industrial base will depend on its ability to compete in an environment increasingly defined by relentless economic rivalry.
Notes
(1) The Multiannual Financial Framework (MFF) proposed by the European Commission covers the 2028-2034 period. The €131 billion earmarked for defence is included within a €400 billion European Competitiveness Fund.
(2) The European Defence Industry Programme (EDIP), which entered into force in December 2025, had until then imposed the following criteria: 65% of the final value or of the components used in defence products must come from EU member states or associated countries; applicants must have their registered office and executive operational management structures within the EU; the factories, logistics resources and production facilities used to manufacture the equipment must be located in Europe; the entity responsible for the product’s technical and intellectual design — the design authority — must be sovereignly established within the EU; and the equipment developed must not be subject to export-control rights or regulations imposed by non-associated third countries, such as US ITAR restrictions.
(3) Hélène Masson, The US Defence Industry in Europe in the Age of the America First Strategy, FRS, 2026.
(4) EDIP and SAFE (Security Action For Europe)
(5) Matthieu Fauroux, The Élysée Is Ready to Shut the Door on Berlin Over the Defence Budget, La Lettre, 09/09/2026.
(6) The CaMo (Capacité Motorisée) agreement establishes a far-reaching defence partnership. In 2018, Belgium mandated France to procure its entire fleet of Griffon and Jaguar armoured vehicles, while also adopting French Army doctrine, data links and training standards, making the two countries’ land forces fully interoperable. By offering similar turnkey packages to other capitals under pressure to rebuild their arsenals, the DGA is seeking to create fully interoperable capabilities built around French technologies.
(7) Patrick Pailloux, Director General of Armaments, French Senate Committee on Foreign Affairs, Defence and the Armed Forces, 24 February 2026.