Defence Finance Monitor Digest #93
Defence Finance Monitor is designed to help professionals interpret how NATO, EU and allied strategic priorities are reshaping capability development, industrial policy and technological pathways. Each edition clarifies the structural shifts—rather than the news cycle—that redefine institutional demand, procurement choices and the strategic relevance of companies across the defence and dual-use ecosystem.
DFM provides a coherent analytical layer that connects strategic intent, industrial capacity, technological evolution and capital allocation, allowing readers to understand how these dimensions interact and create long-term effects across the system.
The purpose is to offer a stable, decision-oriented framework for recognising which capabilities are emerging as priorities, which technologies are gaining structural importance, and which enterprises align with the enduring requirements of liberal democracies. Each briefing contributes to this framework, enabling decisions to be anchored in institutional signals rather than fragmented indicators.
Without an integrated perspective, signals from NATO, the EU and allied governments tend to remain disjointed, making it difficult to assess their implications for industrial positioning, investment decisions and long-term capability planning. DFM consolidates these strands into a single interpretive structure.
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The years ahead will be shaped by rapid institutional, industrial and financial decisions; having a clear, reliable view of how these movements align is becoming essential for anyone operating in this domain.
Strategic Context & International Security
Reinforcing Deterrence and Forward Defence on NATO’s Eastern Flank
The strategic orientation of NATO on its Eastern flank has become one of the most consequential frameworks through which European and transatlantic defence, industry, investment and research must now interpret their own decisions. For Defence Finance Monitor, understanding this strategic architecture is not ancillary but essential, because every subsequent analysis of industrial filières, technological clusters, capital flows and research ecosystems derives its meaning from the hierarchy of security priorities defined by NATO, the European Union and key allied governments. Deterrence and forward defence are no longer abstract concepts but operational imperatives that determine the scale of future production, the urgency of technological acceleration and the structure of long-term financial commitments across the Alliance. This document is therefore designed as a systematic guide to the strategic foundations that shape demand, risk perceptions and capability development for the coming decade. It reconstructs the threat environment, outlines the shift from a tripwire posture to a denial-based forward defence model, examines the integrated roles of nuclear, conventional and missile elements, and translates these imperatives into capability clusters that subsequently cascade into industrial, technological, financial and scientific requirements. It presents a coherent map of how strategic priorities propagate across sectors, enabling private and academic actors to position themselves within a rapidly evolving defence ecosystem. Its purpose is not to argue policy but to clarify the strategic logic that will govern budgets, procurement and innovation for years to come.
Defence Investment Regulation
Structural Permitting Bottlenecks Impeding Industrial Investment and Defence Readiness in the European Union
The speed at which the European Union authorises new industrial facilities has become a decisive variable for the continent’s security. In recent years, companies, governments and investors have begun to assess the credibility of European strategies not only on the basis of allocated resources or political commitments, but above all on how quickly projects can move from decision to operational reality. The issue affects the entire industrial spectrum, yet it carries particular weight in the defence sector, where the demands revealed by the war in Ukraine have brought back into focus production capacities that had long been treated as peripheral. Ammunition, explosives, propellants, launch powders and testing infrastructures now form the material foundations of European deterrence, and these are precisely the activities most constrained by lengthy, fragmented and uncertain permitting cycles. As a result, even when dedicated funding and clear political directives exist, the time required to secure environmental permits, industrial authorisations and safety licences continues to determine the actual pace at which Europe can expand its capacity. Understanding how these bottlenecks operate, where they originate and which solutions are being proposed has become essential for evaluating the credibility of the current rearmament phase and its implications for companies, supply chains, investors and research institutions.
Capital Markets & Investment Flows
The Rise of Defence-Thematic ETFs and Europe’s Strategic Investment Shift
The expansion of European defence-thematic exchange-traded funds in 2025 marks a significant moment in the financial institutionalisation of Europe’s strategic transformation. The rapid growth of assets allocated to these vehicles signals that defence is no longer perceived solely as a domain of public budgets and procurement cycles but as an investable sector shaped by long-term policy commitments, industrial restructuring and geopolitical constraints. According to data reported by Cinco Días, thematic ETFs in Europe have grown by 67 % since the start of the year, reaching approximately US$76.4 billion by the end of September, with defence funds absorbing two-thirds of all new thematic inflows. This shift suggests the emergence of a new investment thesis: defence is becoming a structural component of Europe’s economic trajectory, driven by sustained public spending, the rise of dual-use industries and the institutionalisation of strategic autonomy. At the same time, short-term price movements underline that this is a volatile segment where structural trends intersect with political and market sensitivities, creating a complex investment landscape that requires careful interpretation.
Special Reports
Five Years of Defence and Dual-Use Acquisitions in Europe (2020–2025) - 1 -
Europe’s defence-technological landscape has been reshaped by a wave of acquisitions unlike anything seen in decades. Behind the headlines on spending increases lies a quieter but more decisive development: prime contractors are absorbing the capabilities that will determine Europe’s strategic position in the next decade. Artificial intelligence, cyber security, autonomy, space systems, advanced materials and sensor technologies have all been folded into the portfolios of Europe’s largest defence firms, not through gradual internal development but through targeted, strategic M&A. This report examines that transformation with precision: who acquired what, why those deals were pursued, and how they redefine Europe’s ability to develop, produce and control the technologies that matter. For professionals who rely on accurate signals rather than speculation, understanding this consolidation is essential. It reveals where innovation is being internalised, where dependencies are being reduced, and how Europe is positioning itself in relation to the United States. The full mapping is available exclusively to subscribers.
Access to the full DFM system provides a structured environment for interpreting how technologies, industrial actors and financial movements contribute to defence readiness and allied autonomy.