Despite the European Union’s (EU) steps in recent months to boost defence investment, the sector faces structural challenges, not least due to global industrial overcapacities. Large financial investments are being made in the European defence sector, but the EU must now address the structural issues that inhibit the growth of the European defence industrial base. Chinese industrial overcapacities persist as a major issue in the European defence sector, but more policy attention is required to address this concern. 

CSDS Policy Brief 27/2025

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