
EU remains ‘highly vulnerable' and dependent on US defence production
Despite recent efforts to boost European defence production, the bloc remains 'highly vulnerable' and heavily reliant on the United States—particularly for major, high-end defence equipment—according to a new analysis by the Brussels-based economic think tank Bruegel.
Trade statistics show that the value of weapons imported to Europe increased from approximately $3.4 billion for the period 2019–2021 to $8.5 billion for 2022–2024 across the 27 member states, with the US leading this increase despite concerns over its capabilities.
'Europe has the industrial production capacities to increase production of tanks and infantry fighting vehicles,' said Guntramm Wolff, Bruegel's senior fellow, during the launch of the report Fit for war by 2030? on Friday morning.* 'What is more concerning is the more modern weapons systems, where we have limited capabilities,' he added.
Bruegel and Kiel Institute for the World Economy researchers have detected that the reliance on the US for certain defence and security domains is very high, including hypersonic missiles, next generation jets, AI integrated systems and intelligence services.
'There has been some increase in various systems—artillery in particular has grown substantially—but these increases are still relatively small compared to the overall demand,' Wolff said.
For example, the report notes that Europe held 1,627 main battle tanks in 2023, while projections suggest 2,359 to 2,920 will be needed in the coming years, depending on the scenario. As for air defence systems such as the Patriot and SAMP/T, stock levels in 2024 stood at 35 units—far below the 89 required.
'Major investments in research and development will be essential,' the authors advise EU policymakers and national governments, especially given Europe's lagging defence R&D compared to global competitors.
In 2023, Europe invested €13 billion in military R&D. By contrast, China invested €21 billion, while the US allocated a staggering $145 billion.
In March, the European Commission unveiled its rearmament initiative—now called Defence Readiness 2030—with a target of mobilising up to €800 billion to address the bloc's most critical defence shortfalls.
Meanwhile, NATO is expected to call on its 32 members to increase defence spending to 5% of GDP by 2032—or potentially by 2035—a target Spain has already criticised as 'unreasonable'.
But simply increasing budgets won't solve the problem, the report warns.
'More military spending will not automatically and immediately translate into military capabilities, especially if the defence industrial base is already under strain,' the researchers argue. The real challenge, they stress, lies in converting funding into tangible capabilities through a coherent, forward-looking strategic and operational plan.
With the European defence market still highly fragmented, greater integration would improve cost-effectiveness. But alongside procurement reform, military planning must also be strengthened.
'This is really about rebuilding the ability to understand war through the lens of peer conflict—and that is just as much of a challenge as disbursing the money,' said Dr. Alexandr Burilkov, assistant director for research at the GLOBSEC GeoTech Center.
According to the researchers' estimates, even the proposed €800 billion may fall short—insufficient to cover the development of missile capabilities, procurement of tanks, artillery, and infantry fighting vehicles, modernisation of forces, and investment in air defence systems.
Russian drones struck the Black Sea port city of Odesa and the northeastern city of Kharkiv overnight, killing at least one person, Ukrainian officials have said.
The attacks against Odesa sparked fires in several apartment blocks, Ukraine's Emergency Service said.
Flames engulfed a four-storey residential building in the city, which partly collapsed and injured three emergency workers.
A separate blaze spread across the upper section of a 23-storey high-rise, leading to the evacuation of 600 residents.
In total, one person was killed and 14 others were wounded in the overnight strikes against the port city, according to Odesa's regional prosecutor's office.
At least eight drones hit civilian infrastructure in Kharkiv, injuring two children and two others, Ukraine's Emergency Service said. A further four people were wounded in a second Russian strike on Friday.
Ukraine's Air Force said Russia launched 80 Shahed and decoy drones overnight, with Ukrainian air defences intercepting or jamming 70 of them.
A Russian missile strike on a nine-storey Kyiv apartment building earlier this week was a sign that more pressure must be applied on Moscow to agree to a ceasefire, Ukrainian President Volodymyr Zelenskyy said on Thursday.
The drone and missile attack on Kyiv early Tuesday, the deadliest assault on the capital this year, killed 28 people across the city and wounded 142 others, Kyiv Military Administration head Tymur Tkachenko said.
'This attack is a reminder to the world that Russia rejects a ceasefire and chooses killing,' Zelenskyy wrote on Telegram, and thanked Ukraine's partners who he said are ready to pressure Russia to 'feel the real cost of the war".
As Russia proceeds with a summer offensive across the roughly 1,000-kilometre front line, US-led peace efforts have failed to gain traction.
Russian President Vladimir Putin has effectively rejected an offer from US President Donald Trump for an immediate 30-day ceasefire, making it conditional on a halt to Ukraine's mobilisation effort and a freeze on Western arms supplies.
Kremlin spokesperson Dmitry Peskov said Friday that the date for the next round of peace talks is expected to be set next week.
Ukrainian officials have not recently spoken about resuming talks with Russia, last held when delegations met in Istanbul on 2 June, though Ukraine continues to offer a ceasefire and support US-led diplomatic efforts to stop the fighting.
The two rounds of brief talks yielded only agreements on the exchange of prisoners and wounded soldiers.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Fashion Network
an hour ago
- Fashion Network
Salomon and Arc'teryx help Amer Sports defy downturn with athleisure bet
In 2020, Carlo Aragon started the 'Salomonology' Instagram page as a fashion moodboard to help him decide whether to invest $150 in a pair of Salomon XT-6s. He bought it, liking how the shoes looked 'unorthodox.' Others did too — the account now has almost 150,000 followers, intrigued by how trail shoes can pair with streetwear. Aragon's Instagram fame mirrors the ascent of Amer Sports Inc., the company behind Salomon. Since its New York Stock Exchange debut in February 2024, the Helsinki-based group, which also owns outerwear brand Arc'teryx and sports equipment maker Wilson, has nearly tripled its market value to $21 billion. It has outpaced peers like On Holding AG, Hoka parent company Deckers Outdoor Corp. and Anta Sports Products Ltd., the Chinese sporting goods giant that owns a 42% stake in Amer Sports. Amer Sports' growth has beaten the consumer downturn by riding the outdoor activity wave. It's among the mid-tier luxury brands offering shoppers high-quality goods that don't break the bank. The bulk of this rally occurred recently, following first-quarter results that defied a rocky global economy. Sales topped expectations, and the company raised its outlook while others cut theirs. Growth of its Technical Apparel and Outdoor Performance divisions — which respectively house Arc'teryx and Salomon — boosted results, Chief Executive Officer James Zheng said in the most recent earnings call, highlighting the brands' potential. While Salomon sneakers surpassed $1 billion in sales in 2024, it's a fraction of the $180 billion global sneaker market, and Arc'teryx is 'very under-penetrated globally,' he said in the call. Amer Sports declined a request for an interview with an executive. Amer Sports wasn't always this successful. Shares remained subdued after the IPO due to high debt, low trading volume, and significant exposure to a lagging Chinese economy, said Laurent Vasilescu, an analyst at BNP Paribas Exane, who rates the stock outperform. Then in December, Amer Sports issued shares to pay down most of its debt. This move reduced leverage and boosted trading volume, alleviating two of the three primary investor concerns, Vasilescu said in an interview. China, which accounts for about 30% of the company's revenue, remains a concern, though sales in the market have bested expectations every quarter since the IPO. Premium sportswear and outdoor market gear is one of the fastest-growing consumer segments in China, attracting younger and female consumers, as well as luxury shoppers, Chief Financial Officer Andrew Page said on the earnings call. Glamping — short for glamorous camping — and gorpcore – wearing outdoor clothes as everyday wear – are currently trending in China, Vasilescu said. Amer Sports is also attracting middle- and upper-income customers who like the 'quiet luxury' aesthetic and the upscale in-store shopping experience of its brands, he added. That's happening in the US too, where celebrities like Timothée Chalamet and Bella Hadid have been spotted wearing Salomon shoes. Sales in its Americas division have grown every year since 2020 – the earliest publicly available results – though at a slower pace than Greater China's, which is estimated to overtake Europe, the Middle East and Africa as Amer Sports' second-largest market by revenue this year. One fan is Gabriella Gonzalez, a 29-year-old stylist who popped by a Salomon store in New York City's SoHo shopping district on a Friday afternoon. She praised the breathability, waterproofing and style of her pink-and-black XT-6 shoes. 'They make my outfits pop,' she said. About half a mile away is Arc'teryx's largest US store. Customer Chris Rojes said he doesn't mind paying more for Arc'teryx's gear over other brands. 'You feel more special in them.' Arc'teryx distinguishes itself from other outdoor apparel brands like Patagonia Inc. and VF Corp's The North Face through a 'much higher level of premiumization,' said TD Cowen analyst John Kernan, who has a buy rating on Amer Sports. Despite higher prices, consumers are willing to pay for Arc'teryx's 'leading innovation.' Declining consumer brand loyalty and a growing desire for variety also creates an opportunity for Salomon and Arc'teryx to gain market share from industry leaders like Nike Inc. and Adidas AG, Vasilescu said. To keep flying high, Amer Sports needs to go global, analysts said, warning that it's an uphill battle. 'We believe that the global brand rollout will not be easy' due to Arc'teryx's high price points and intense competition in Western outerwear markets, said HSBC analyst Akshay Gupta, who has a hold rating on the company. Morningstar analyst Ivan Su, who has a sell rating, believes Amer Sports' would need a compound annual growth rate of 20% over the next five years to support its currently high valuation, which would require 'near flawless execution' globally.


Fashion Network
an hour ago
- Fashion Network
A luxury experience in China: Global high-end brands bet on conceptual stores to revive sales
The stakes are high for the luxury brands, which for years have relied on brisk sales in China to fuel their global growth, and ambitions, but are now facing a slowdown in demand in the world's second-biggest economy. The size of the Chinese market declined more than 18% last year to around 350 billion yuan ($48.80 billion) and sales are on track for a flat performance in 2025, according to estimates from consultancy Bain. Zino Helmlinger, head of China retail at real estate service provider CRBE, acknowledges that the luxury segment as a whole in China has taken "a hit" recently, though he believes the slowdown was expected. 'If you look at the megastars - I mean LVMH, Kering, Richemont, Hermès - they almost tripled their profit within five years," he said. "At some point, there is some counterbalancing, there is only so much you can grow, only so much you can generate." In the first quarter, LVMH's revenue in the region that includes China fell 11% on an organic basis - the Asia-Pacific excluding Japan accounts for 30% of the group's total sales. Chinese consumers, hard hit by broader economic uncertainty and a prolonged property market downturn, have tightened spending on discretionary purchases - luxury branded handbags among them. Shanghai native Natalie Chen, 31, says she already owns enough "stuff" and has redirected a significant portion of the funds she once used for luxury goods to travel. "Truthfully speaking, I don't feel that buying another bag will improve my life," she said, though she has already visited a new restaurant opened by Prada in Shanghai and intends to check out Louis Vuitton's new cafe concept with girlfriends. "It brings a different kind of feeling than just [shopping] in a mall," Chen said, though she was unsure the ship-shaped store would lead her to make any purchases outside of coffee and cake. Still, the luxury brands are sensing a longer term opportunity to pump-prime sales. While appetite for personal luxury goods in China and around the world is declining, hurt by economic pressures and price fatigue, sales rates of "experiential goods" are rising, according to Bain, which highlighted a surge in personalized luxury hospitality experiences and rising fine dining sales in its spring luxury report. In 2024, for example, the overall personal luxury goods market worldwide fell 1% to 3% even as experiential luxury spending rose 5%, Bain said. New research released by real estate advisor Savills earlier this month points to this as a significant new trend in what it describes as China's "evolving" luxury market, in which people seeking out experiences are lured with more experiential luxury brand touchpoints, from restaurants to Salon Privé - private, appointment-only lounges for VIP shoppers. "All the brands are closing stores, but those that can afford to are also opening big flagships or holding some big events or exhibitions to keep their visibility extremely high," said Patrice Nordey, CEO of Shanghai-based innovation consultancy Trajectry, essentially preparing for future success when the market picks up again. Brands from Balenciaga to Chanel, Louis Vuitton and Prada have all closed stores in China since the second-half of last year. Gucci is on track to close 10 stores in the market this year, Helmlinger said. Louis Vuitton's stablemate Dior opened a cafe concept in Chengdu earlier this year, and in March Prada opened a Wong Kar Wai-designed restaurant at its Rong Zhai cultural space in Shanghai. Jeweller Tiffany and Co. recently downsized a large downtown Shanghai store, but in March it also opened a new three-storey flagship in Chengdu. Nordey says that while more people refer to this trend as "experiential" retail, it actually speaks to something much deeper. "I think it's a way of looking at your customer, either as someone that will buy products, or as an individual who is trying to have a more fulfilling life," he said. "If your purpose is not only to feed your client with consumer products, but more than that, you might actually resonate more strongly with them." While high-profile luxury store closures in mainland China have prompted speculation of brands lessening investment in a slowing market, CRBE's Helmlinger says the real story is more nuanced, indicating a strategic realignment of resources, rather than a pullback in the market. "You need to create this concept of rarity, and rarity comes with scarcity," he said. "When you have 80 or 90 stores in one market, it doesn't seem so rare anymore, it seems like it's mainstream."


Fashion Network
an hour ago
- Fashion Network
Hedge fund Parvus holds 5% stake in luxury group Kering, filing shows
Parvus Asset Management, a hedge fund registered in Britain, has raised its stake in Kering, a filing by France's financial regulator showed on Friday, now holding around 5% of the group's share capital. See catwalk The filing comes as Kering is under increased market pressure, with shares down by over 60% in the past two years after a string of profit warnings and designer changes at its Italian flagship label Gucci. Dealing with the London-based fund known for its activist approach adds to the list of challenges of incoming chief executive Luca de Meo, who will take over the helm in September. Kering declined to comment, while Parvus did not immediately reply to a request for comment. The hedge fund has declared that it breached the regulatory threshold of 5% of Kering's share capital, and 3.5% of its voting rights, on Friday, the filing by France's AMF regulator said. It was previously cited as a shareholder with a 4% equity stake and 2.9% of voting rights in Kering's last annual report. The firm, which earlier targeted budget airline Ryanair and Italian bank UniCredit, has recently also built up a stake in Danish drugmaker Novo Nordisk, the Financial Times reported earlier this month. © Thomson Reuters 2025 All rights reserved.