The war is already underway, but what is the state of European defence?

‘We are ready to fight,’ says NATO’s Supreme Commander, US General Alexus Grynkewich. ‘Ready even now, should we come under attack.’ But are we all really ready? Is European industry ready to supply the essential resources – not so much to repel a potential Russian attack, but to sustain what is likely to be a protracted phase of defence and counter-attack? We are ready, as the heads of the special forces who gathered for three days in Rome at the Hotel Cavalieri, atop Monte Mario, have also stated. The SOF (Special Operational Forces) association brings together representatives of the American, European and Western combat elites. Representing Italy were high-ranking figures from the armed forces, as well as Minister Guido Crosetto. Notable among the Americans were Admiral Frank ‘Mitch’ Bradley, former commander of the Navy SEALs, and Lieutenant General Richard Angle, commander in Europe.

The official debate, and even more so the unofficial exchanges of information and ideas, have confirmed certain facts. The first is that war is underway; the conflict – referred to by many names – was initiated by Russia well before the invasion of Ukraine, after which it came out into the open. A long-term challenge with China is underway, but beyond the idle chatter and Trump’s erratic moves, defence circles have no doubts: the enemy today is once again in the Kremlin. Some European countries are already preparing for the worst. The borders of Poland and Romania are being fortified, hospitals upgraded, and the population urged to relocate inland; minefields are appearing, whilst it is now certain that the next Russian incursion – if Putin has the strength and there is no change of course – will take place in Moldova within the next two years. This is an extremely imminent scenario; there is not much time to adapt and strengthen the armed forces. What is happening in the defence industry therefore becomes crucial, and this is where internal conflicts and rivalries emerge, and political and industrial pitfalls open up.

“The most vulnerable area is air defence,” Minister Crosetto told Il Foglio. Dependence on the United States is virtually total. Europe has developed competitive missiles through the MBDA consortium (Airbus, BAE and Leonardo), but it has no defence system akin to Israel’s Iron Dome. The Superjet project aims precisely to fill one of these gaps, albeit in the medium term. Italy, the UK and Japan intend to build a sixth-generation fighter-bomber capable of rivalling the new F-35s. The British government has opened the door to Germany, which found itself isolated after another agreement with the French – the SCAF programme – fell through due to irreconcilable differences between the German-led Airbus and Dassault. At stake is the division of the pie, but above all command, a key issue that also arises in the GCAP programme involving BAE, Leonardo and Mitsubishi, each holding a 33 per cent stake. Berlin does not intend to join as a supplier, but wants its share. Leonardo is not imposing any vetoes, CEO Lorenzo Mariani has stated. However, it is necessary to start from scratch, split the package into four parts and, above all, clarify who does what; it is not just a matter of swapping shares, but of keeping the factories running – a goal with significant political and social implications. The final say, therefore, rests with Palazzo Chigi. What applies to jets also applies to tanks.

Leopards or panthers? In the wild, they are identical, apart from the leopards’ spotted coat and the panthers’ black one; in industry, they are rivals. The contract for the first tranche of the agreement between Leonardo and Rheinmetall has been signed, aimed at developing the entire family of vehicles for the Army – a programme with a total value of around 23 billion euros. The first tranche, currently in the start-up phase, is worth around 5 billion and will begin producing Panthers, whilst the rest of Europe prefers Leopards. Why is that? It all begins with the Franco-German rift that brought the MGCS project for a next-generation main battle tank to an end. The French withdrew and upgraded their Leclercs, whilst the Germans worked on the successor to the Leopard 2. The lion’s share (pardon the zoo of ferocious felines) goes to KNDs, formed from the merger between Krauss-Maffei Wegman and the French firm Nexter Systems; Rheinmetall also plays an important, though not central, role. There is a major difference between the two German defence groups: in KNDs, the Berlin government is acquiring 40 per cent from the Bode and von Braunbehrens families, leaving them with 10 per cent; the French government will hold the remaining 40 per cent. Rheinmetall, on the other hand, is a publicly listed company which, having started out as a major munitions manufacturer, is expanding into a wide range of defence equipment. And it is not prepared to act as a junior partner. This is where Italy comes into the picture.

In 2023, the Meloni government announced its intention to purchase the new version of the Leopard and a number of derivative platforms – between 125 and 250 units – at a cost (which also includes other items) of around 4 billion euros. Documents are signed to set the process in motion – not quite marriage contracts, but not far off. However, in June 2024, the whole deal falls through. Why? The Italian explanation is that the national company, Oto Melara, would have played too minor a role, whilst Giorgia Meloni states in no uncertain terms that the strengthening of defence (rearmament, according to the opposition) must see Italian industry take centre stage. At this point, Rheinmetall steps in. The company is enjoying a boom on the stock market and offers itself as a partner for a different programme: not only the Panther, a high-tech, next-generation tank, but also light vehicles, the Lynx; in short, lynxes alongside panthers – is the zoo expanding?

Quite a few people are surprised by this shift. Is Italy not at risk of abandoning the mainstream – that is, the Leopard tanks – to position itself in an industrial and military niche, regardless of technological considerations or the ‘cat-like’ competition? What market might open up for the new vehicles if a different platform prevails in Europe? Can the Italian tank go it alone? The response from the government, the military leadership and Leonardo is that, with Rheinmetall, Italy has a significantly broader and more technologically advanced role. As for market opportunities, it is not just a matter of looking to European countries – particularly those in Central and Eastern Europe – but to Asia, South America and, in particular, Brazil; in short, beyond the Old Continent. This is not a sovereignist stance, but an openness towards partners who no longer wish to rely solely on the United States and suffer its dominance. Are there already agreements in principle, or are we merely harbouring high hopes?

Rheinmetall’s Panther KF51 will form the basis for the new main battle tank (IMBT) set to replace the old Ariete; Oto Melara will carry out the work in La Spezia. The company’s head office is in Rome. The agreement stipulates that 60 per cent of the work will be carried out in Italy – more than KNDS offered for the Leopard, according to the government. Yet two years ago, it wrote: “Although the programme concerns the acquisition of existing, pre-identified German-manufactured vehicles, its implementation would have a positive impact on Italian small and medium-sized enterprises, creating a supply chain geared towards technological growth.” The document referred to “a long-term international partnership, the possible relocation of component production to Italy and the provision of labour for work at the sites that will house the vehicles”. The overall plan with Rheinmetall, presented to the Defence Committees of the Chamber of Deputies and the Senate, provides for the acquisition of 272 Panthers as well as 1,050 tracked infantry fighting vehicles (the Lynxes). For the time being, funding of 8 billion euros has been allocated – the very same amount that was cut by Giancarlo Giorgetti in the 2027 budget. Market uncertainty is thus compounded by a systemic doubt: is the money actually there? And who is going to pay?