Defence Finance Monitor #132
Defence Finance Monitor applies a top–down method that traces how NATO, EU and allied strategic priorities are translated into regulations, funding lines and procurement programmes, and then into demand for specific capabilities, technologies and companies. We use official doctrine as the organising frame to identify where strategic relevance is being institutionally defined and where it is materialising in concrete budgets, acquisition pathways and industrial capacity.
Our working assumption is that what becomes structurally relevant in NATO/EU strategy tends, over time, to become relevant also from a financial and industrial point of view. On this basis, DFM operates as a decision-support tool: it benchmarks investment and industrial choices against institutional demand, clarifies which capabilities are rising on the spending agenda, and maps the funding instruments, eligibility constraints and supply-chain factors that shape real-world feasibility across investors, industry, public authorities and research organisations.
Defence Investment Regulation
The 65% origin rule: tier-by-tier supply chain mapping
The introduction of the 65% origin rule under Regulation (EU) 2025/1106 marks a decisive transition from declarative compliance to enforceable industrial governance. What is at stake is not only eligibility for SAFE financing or the Sovereignty Seal, but the very bankability of defence and dual-use projects over multi-decade horizons. This analysis examines how tier-by-tier supply chain mapping has become a central strategic function, reshaping procurement, corporate governance, and risk management across European industry. By tracing how origin verification propagates from raw materials and software code to financial structuring and institutional validation, the analysis clarifies why supply chain transparency is now a prerequisite for access to sovereign capital and long-term market relevance. Subscribers gain access to the full analytical framework needed to understand how the 65% rule operates in practice, where compliance risks emerge, and how firms can convert regulatory constraint into strategic advantage.
Critical Infrastructure & Corporate Readiness
STEP funds for reskilling: transitioning human capital to dual-use excellence
The transition to a sovereign European industrial base in 2026 is currently facing its most significant bottleneck: a chronic shortage of specialized talent. While the Union has established the financial architecture for technological growth, the human capital required to operate within the “dual-use” paradigm—where civilian technology meets defense requirements—must be systematically reskilled. Regulation (EU) 2024/795, which established the Strategic Technologies for Europe Platform (STEP), provides the necessary funding to address this gap. For civilian firms, this represents a unique opportunity to upgrade their workforce’s competencies at a subsidized cost, ensuring they meet the stringent requirements of “trusted supplier” status. Reskilling through STEP is not merely about technical training; it is about preparing employees to handle classified data, military-grade precision, and high-security protocols. By leveraging these funds, companies can ensure their workforce remains a competitive asset in the new economy of resilience, avoiding the risk of operational exclusion from the European defense market by the 2030 horizon.
Operational & Tactical Priorities
Defence Finance Monitor applies a structured analytical method that moves from clearly defined strategic priorities to operational and tactical priorities, and from there to the assessment of concrete capabilities, technologies, and industrial actors. Within this framework, Defence Industrial Base Strengthening & Munitions Readiness is treated as a core strategic priority, reflecting the reality that deterrence, force credibility, and operational endurance now depend on the capacity of Allied industrial systems to produce, replenish, and sustain materiel at the scale and tempo required by high-intensity conflict. This priority is articulated through a set of tightly interconnected operational layers: industrial capacity expansion as the foundation for sustained output; supply-chain resilience as the condition for securing inputs, logistics corridors, and workforce continuity under stress; ammunition and missile production surge as the mechanism that translates readiness planning into executable warfighting scenarios; and joint procurement and industrial integration as the institutional architecture that aligns demand, standards, and investment across national boundaries. Using this method, DFM systematically identifies the capabilities, technologies, and firms that are becoming structurally relevant within this industrial-operational architecture, and therefore material for decision-makers and investors assessing exposure to defence and dual-use domains aligned with NATO and EU priorities.
Industrial Capacity Expansion (Operational Priorities)
Industrial capacity has re-emerged as a binding constraint on military credibility, as the war in Ukraine demonstrated how quickly stockpiles can be exhausted when production is sized for peacetime assumptions. This analysis examines capacity expansion as a structural requirement rather than an emergency response, tracing how NATO and the EU are translating strategic commitments into new factories, duplicated production lines, workforce pipelines, and multi-year contracting frameworks. The focus is on whether current initiatives are sufficient to align industrial output with the scale, duration, and tempo of high-intensity conflict, and on the bottlenecks that continue to limit expansion despite unprecedented political consensus.
Critical Supply-Chain Resilience (Operational Priorities)
Supply-chain resilience has moved from a background assumption to a formal operational priority for both NATO and the EU, driven by the mismatch between wartime consumption rates and Europe’s pre-2022 production, storage, and mobility capacity. This piece sets out the operational logic behind “resilience” as a programme category: how stockpiles, surge manufacturing, transport corridors, depots, cybersecurity of logistics systems, and industrial workforce constraints combine into a single readiness problem, and how NATO and EU instruments are attempting to convert political intent into durable capacity. The analysis also clarifies how this priority interacts with adjacent effort lines—demand aggregation, standardisation, and capacity expansion—while identifying the recurring bottlenecks that turn industrial scale into a binding constraint on deterrence planning.
Ammunition & Missile Production Surge (Operational Priorities)
Ammunition and missile production has re-emerged as a binding constraint on NATO and EU defence planning, not as an abstract industrial issue but as a determinant of whether collective defence scenarios remain executable beyond the first phase of combat. This analysis examines how consumption rates observed in Ukraine have forced a reassessment of stockpiles, surge capacity, production lead times, and component dependencies, and how these factors are now embedded in Alliance and EU readiness frameworks. Rather than treating industrial output as a background variable, the piece reconstructs how production surge is being integrated into deterrence logic, regional defence plans, and long-term force sustainment assumptions, highlighting where capacity expansion remains insufficient and where policy instruments are attempting to close the gap.
Joint Procurement & Industrial Integration (Operational Priorities)
The post-2022 munitions and sustainment gap has made procurement architecture itself a matter of operational credibility. This analysis looks at joint procurement and industrial integration as a practical mechanism for converting political intent into deliverable capacity: aggregating demand to create bankable production runs, reducing fragmentation that prevents scale, and aligning standards so that inventories, production lines, and replenishment flows can function across national boundaries under stress. The focus is on the institutional mechanics that determine whether “more spending” becomes measurable output: contracting formats, interoperability and certification, stockpile governance, and the integration of SMEs and mid-tier suppliers into cross-border supply chains. Read in full, the piece clarifies where NATO-led coordination and EU instruments converge, where they remain structurally misaligned, and which bottlenecks still prevent economies of scale from translating into sustained readiness.
Company Profiles Database
Defence Finance Monitor continues to expand its proprietary database of over 1200 company profiles, focusing on enterprises that actively contribute to the defence and technological priorities of European, NATO, and allied countries. Each profile is developed using the DFM Strategic-Technological Analysis Framework, assessing how companies align with key objectives—strategic autonomy, technological sovereignty, and cross-border interoperability.
The database highlights firms that reduce dependencies on non-allied suppliers, reinforce industrial resilience, and support interoperable capabilities essential to credible deterrence, force modernisation, and long-term defence planning. It provides a decision-oriented resource for tracking how industrial actors position themselves within the evolving defence ecosystem of liberal democracies.
Recent additions concentrate on German and European defence and dual-use actors with relevance to naval platforms, tactical communications, logistics, protection systems, imaging, propulsion, sustainment, and CBRN capabilities. These include strategic-industrial profiles of Otto Piening GmbH in naval propulsion technologies; Optonaval GmbH in naval surveillance and optronic systems; ODM GmbH as a supplier of tactical communications and autonomous systems; Noske-Kaeser Germany GmbH in naval platform resilience; Nolte Services GmbH in defence logistics; Kidde-Deugra Brandschutzsysteme GmbH in fire-protection systems; Kessler & Co. GmbH & Co. KG in defence mobility systems; Katadyn Deutschland GmbH in water purification and field sustainment technologies; Kärcher Futuretech GmbH in deployable defence infrastructure and sustainment; Kappa optronics GmbH in defence and dual-use imaging systems; JUNGHANS Microtec GmbH in precision components and timing technologies; and JJSolutions GmbH in CBRN protection and dual-use systems.
Access to the full Company Profiles Database is reserved for DFM subscribers.
Without a structured map of the linkages between doctrine, budget and capacity, strategy remains abstract, capital remains misallocated, and industrial readiness remains reactive rather than deliberate.