Heavily Armed EU... Poison or Remedy? [Yang Nak-gyu's Defence Club]

Trump's "Security Free-Rider Theory" Accelerates European Rearmament
Europe's Weapon Imports More Than Double
Shrinking Space for K Defense Industry...
Strategic Collaboration with Europe Needed

The European Union (EU) is uniting. Since the election of U.S. President Donald Trump, security concerns have accelerated military rearmament efforts, raising worries that the niche market for 'K defense industry' exports is shrinking.

EPA Yonhap News

On the 9th (local time), Ursula von der Leyen, President of the European Commission, announced the 'European Rearmament Plan' aiming to mobilize a total of 800 billion euros (approximately 1,258 trillion won) at a press conference held in Brussels, Belgium, proposing a European-first purchasing policy. This effectively declared a 'Buy European' policy. Of the total 800 billion euros involved in the European Rearmament Plan, 150 billion euros will be supported by the EU budget. The remaining 650 billion euros will be raised by individual countries. Until now, the EU has regulated national fiscal deficits to within 3% of GDP to maintain economic and financial stability. However, the priority now is immediate military expansion.

Trump's 'Security Free-Rider Theory' Spurs Heavy Armament Plans

Since his election in November last year, President Trump has openly criticized Europe's security support. He claims that as Europe saves on defense spending, the U.S. suffers losses. This is known as the security free-rider theory. On the 6th of this month, Trump said, "If NATO countries do not pay, I will not defend them." He also vowed, "If Europe does not spend more than 2% of its GDP on defense, I will withdraw from NATO (North Atlantic Treaty Organization)."

The European Union has begun to feel unsettled. The U.S. is absolutely necessary to confront Russia, which is currently at war with Ukraine. Especially after President Trump reprimanded Ukrainian President Volodymyr Zelensky at the White House during last month's summit, asking, "Why don't you thank the U.S. for military support?" and subsequently expelled him, and then temporarily suspended military aid on the 4th, Europe's anxiety has peaked. Europe expresses concerns that it could suffer the same fate as Ukraine at any time.

The European Union plans to increase the budget available for rearmament to reduce strategic dependence on the U.S. Approximately 55-60% of the core weapons held by European countries are American-made. The U.S. is also absolutely necessary to maintain these American weapons. If the EU's rearmament plan proceeds without setbacks, the defense spending ratio relative to GDP of the 23 NATO member countries within the EU will rise from the current approximately 2% to about 3.5%.

Europe's Weapon Imports More Than Double

Over the past five years, Ukraine has imported the most weapons worldwide. During the same period, Europe's dependence on American weapons imports has increased. According to the 'International Arms Transfers Trends, 2024' report published on the 10th (local time) by the Stockholm International Peace Research Institute (SIPRI), a non-profit think tank in Sweden, Ukraine's weapon imports from 2020 to 2024 increased nearly 100 times compared to 2015 to 2019, ranking first globally. This accounts for 8.8% of the world's total weapon imports.

Especially after Russia's invasion in 2022 triggered the Ukraine war, at least 35 countries have been recorded as sending weapons to Ukraine. Among the weapons supplied to Ukraine from 2020 to 2024, 45% were American-made, followed by Germany (12%) and Poland (11%). Amid this trend, U.S. arms exports increased by 21% over the past five years. The share of global arms exports also rose by 8 percentage points to 43%, solidifying the U.S.'s position as the world's top arms exporter.

During this period, NATO member countries in Europe also more than doubled their weapon imports. Notably, the proportion of American-made weapons increased from 52% to 64%, a 12 percentage point rise, indicating Europe's growing dependence on the U.S. Additionally, French and Korean weapons each accounted for 6.5%, followed by Germany (4.7%) and Israel (3.9%).

Narrowing Space for K Defense Industry... Need to Collaborate with Europe

The EU plans to enhance the competitiveness of its defense industry and create jobs through massive funding for rearmament. Since the European market is emerging as a major export market for South Korea's defense industry, such EU policies could impact domestic defense companies.

Domestic defense companies have exported K-9 self-propelled howitzers, K2 tanks, and FA-50 light attack aircraft mainly to Eastern Europe, including Poland, Romania, and Estonia. In particular, in July 2022, a basic contract related to large-scale weapon exports was signed with Poland, and in August of the same year, the first contract worth $12.4 billion (approximately 18 trillion won) was concluded. The first contract included plans to supply 180 K2 tanks, 212 K-9 self-propelled howitzers, and 48 FA-50 light attack aircraft. The second export contract with Poland began in December 2023 with 152 K-9 self-propelled howitzers and is proceeding sequentially. It is reported that a $6 billion (approximately 9 trillion won) contract for exporting 180 K2 tanks may be finalized as early as next month.

European defense industry leaders such as France, Germany, and the United Kingdom are concerned about the 'home market invasion' by Korean defense companies and are strongly trying to counter them. Experts advise that for sustainable expansion into the European market, a strategic approach that seeks mutual benefits with Europe's advanced defense countries is necessary in the long term.

A government official said, "To build a favorable position for 'K-defense' within the European market, we will promote mutual cooperation systems with NATO and the European Union," adding, "We will actively support domestic defense companies to strengthen mutually beneficial defense cooperation through localization efforts such as establishing local factories."