Defence Finance Monitor Digest #117
Defence Finance Monitor applies a systematic top–down approach. We start from the strategic, operational and tactical priorities as they are stated in the official documents of NATO, the EU and the governments of liberal democracies, and we track how these priorities are translated into funding lines, programmes and procurement plans, and then into demand for specific technologies, industrial segments and companies. In practice, we use these doctrines as a lens to identify which capability areas, technologies, companies and lines of research are being “lit up” as strategically relevant, and we map how this relevance materialises in concrete procurement, financing and industrial capacity, highlighting the assets that sit where strategy, budgets and capital effectively converge.
Our working assumption is simple: what is structurally relevant for NATO and EU strategy tends, over time, to become relevant also from a financial and industrial point of view.
On this basis, DFM functions as a decision-support tool, not as a conventional editorial product. For investors, it benchmarks deal flow against institutional priorities and highlights companies and technologies that solve concrete NATO/EU operational problems, rather than chasing thematic narratives. For entrepreneurs, primes and industrial managers, it shows which capabilities are moving to the top of the spending agenda, how to align R&D and product plans, and which funding instruments and partners are realistically available. For public decision-makers, it translates strategic goals into a structured picture of industrial capacity, innovation pipelines and supply-chain vulnerabilities. For universities and research centres, it shows where their scientific directions match urgent requirements and private capital, helping them position projects for both funding eligibility and effective real-world application.
In short, we translate strategic doctrine into an investable context, turning NATO/EU priorities into a usable map of technologies, companies and research lines that matter. DFM offers a common frame of reference so that each actor can read the same system from their own angle and act before decisions are forced by events.
Defence Investment Regulation
NATO-Allied Exceptions in EDIP and SAFE: How US Capital and Technology Can Enter EU Defence Programmes
European strategic autonomy in defence is often described as a tightening of eligibility and control rules, but the legal architecture is more conditional than absolute. EDIP and SAFE set a default perimeter designed to protect the European Defence Technological and Industrial Base, yet they also embed specific gateways for NATO-aligned cooperation when interoperability and collective defence requirements make exclusion impractical. This piece explains the main mechanisms that can enable US participation without overturning the EU’s core control logic: the interpretation of “control” under EDIP eligibility rules, the role of security and defence partnerships and related instruments, the subcontracting thresholds that preserve access to mission-critical components, and the reciprocity logic that links market access to balanced industrial benefit. The aim is to clarify where the EU framework draws the line, which exceptions can be activated, and what a compliant structure looks like for transatlantic capital and technology in common procurement and capability development.
Public Expenditure & Procurement
EDF 2026: Where the EU Is Placing Its €1 Billion for Defence Industrial Readiness
The 2026 European Defence Fund Work Programme is not only a funding cycle; it is an industrial signal that clarifies what the Union expects to build, scale, and integrate by the Readiness 2030 horizon. With roughly €1 billion distributed across capability-driven projects, forward-looking technologies, and the EUDIS pipeline for SMEs and startups, the programme outlines a de facto prioritisation of supply-chain consolidation, TRL progression, and consortium architecture. This analysis reads the Work Programme as an allocation map for European defence manufacturing capacity: which domains are being accelerated, where the EU is de-risking capital-intensive demonstrators, and where it is deliberately widening the entry points for deep-tech and non-traditional suppliers. The objective is to translate the call structure into industrial implications, identifying how EDF 2026 shapes procurement-relevant technologies, standardisation pressures, and the near-term opportunities for firms positioned along the European capability and component ladder.
European Security & Defence Industry
Strategic Integration and Industrial Resilience: The 2026 Paris Declaration and the Future of EU-Ukraine Defense Cooperation
This analysis assesses the 2026 Paris Declaration as an institutional and industrial turning point in EU–Ukraine defence cooperation. The core shift is from short-term military assistance to a structured partnership centred on co-production, supply-chain resilience, and the build-out of maintenance, repair, and regeneration capacity. Rather than treating security guarantees as purely political commitments, the analysis reads them as a demand and governance signal that can de-risk multi-year industrial investments, accelerate production scaling, and integrate Ukrainian facilities into European capability planning. The report focuses on how the declared framework interacts with EU instruments and implementation channels, and what this implies for contractors, subcontractor networks, and the emerging geography of defence manufacturing in Eastern Europe. The objective is to clarify the operational meaning of “industrial integration” in this context: which functions are being prioritised, which constraints remain binding, and where the most immediate industrial consequences are likely to materialise.
EDTs & Dual-Use Technologies
Quantum Technologies and Alliance Security: An Analysis of PQC Migration, Quantum Sensing, and Secure Communications Pathways
This analysis examines quantum technologies as an emerging set of security and industrial constraints for the Alliance, rather than as a generic promise of future advantage. The core question is practical: how quantum computing risk drives near-term post-quantum cryptography (PQC) migration, how quantum sensing is moving from laboratory performance to deployable resilience in contested PNT and ISR environments, and how quantum-secure communications architectures such as QKD and EuroQCI shape procurement and interoperability requirements. The report focuses on implementation pathways, not abstractions: standards and certification, integration with existing C4ISR and network stacks, component dependencies (including photonics, cryogenics, timing, and secure hardware), and the industrial scaling challenges that determine timelines and costs. The objective is to clarify what “quantum readiness” means in governance and supply-chain terms, and where the most immediate decision points lie for defence institutions, primes, and specialised subsystem providers.
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.