23 April 2025
Press Release: Defence Spending Needs a Shake-Up, Says Monopolies Commission
In light of the European Union's "Readiness 2030" goal, the Monopolies Commission is calling for an urgent transformation of defence procurement to remove bureaucratic barriers while safeguarding competition. With €800 billion of planned defence investment at stake, Europe cannot afford procurement processes that stifle innovation and delay the delivery of innovative capabilities. The independent advisory body to the German government calls for cutting red tape, prioritising European solutions and creating fast-track pathways for innovative technologies - all while ensuring robust competition safeguards remain in place.
"Competition is not just a peacetime luxury - it is the fundamental pillar of Europe's economic order and the engine that drives innovation and efficiency in defence procurement as well," said Professor Tomaso Duso, Chair of the Monopolies Commission. "Without a robust competition framework that opens up opportunities for start-ups and innovation in strategic enabler technologies such as AI, cybersecurity and unmanned systems, we risk creating entrenched monopolies that will hamper our security capabilities for decades to come."
In its statement, the Commission presents specific recommendations for ensuring a competition-friendly procurement approach, based on three core demands:
- Stronger European coordination and interoperability
Member States must align and coordinate their procurement strategies to bundle demand, create economies of scale, and prevent fragmentation of the European defence industrial base. Defence systems should be designed with interoperability as a fundamental requirement, not an afterthought, enabling seamless coordination across EU military forces. - Simplification and acceleration of procurement procedures
Current procurement processes often favor established contractors and exclude innovative solutions. By implementing more flexible, innovation-friendly formats, procurement authorities can tap into the agility and creativity of small and medium-sized enterprises (SMEs). This would diversify the supplier base and accelerate technological advancement. - A balanced approach between urgency and innovation
While immediate security needs may require reliance on proven suppliers, the Commission recommends implementing dual sourcing strategies and competitive innovation programs in parallel. This two-track approach ensures both short-term readiness and long-term technological superiority.
The Monopolies Commission further stresses that the allocation of public funds must be firmly rooted in the rule of law. Public procurement and state aid rules should be simplified, but not abandoned. Regulatory authorities must be equipped to effectively detect and address anti-competitive conduct, corruption, and collusion—without impeding innovation.
“Transparent procedures are essential to ensure that the defence sector operates in an innovative, efficient, and publicly accountable manner,” Professor Duso concluded.