NATO and the EU: An Emerging Alignment of Defence Roles
STRATEGIC QUESTION
How is the division of responsibility between the EU, NATO and national governments evolving as European defence initiatives expand?
SIGNIFICANCE
NATO allies have increased defence spending, committing to invest 5% of Gross Domestic Product (GDP) annually by 2035, including at least 3.5% on core defence requirements and up to 1.5% on defence and security-related spending. The increased spending aims to strengthen forces and capabilities while also creating fairer burden-sharing. To support defence investment, the European Commission created the Security Action for Europe (SAFE) to provide loans to member states for strategic defence investments. The €150 billion loan instrument provides long-term financing to build defence capabilities and strengthen Europe’s defence industrial base through cooperation and joint procurement. For European Union (EU) member states, there are overlapping mechanisms through NATO membership and collective defence planning, alongside their national responsibilities for defence, with national defence investment increasingly supported through EU funding instruments.
NATO’s defence planning provides guidance for national planning while establishing objectives and capability requirements. Allies are assigned capability targets for existing and future capabilities, along with timelines and priorities, with NATO supporting efforts to avoid shortfalls, including through procurement and multinational cooperation between allies. Although Allies receive support, most systems are nationally owned and operated, while some capabilities are collectively operated by NATO. As EU defence financing increases for procurement and defence-industrial development, the EU may increasingly influence how Member States develop and implement capabilities identified through NATO and national defence planning.
KEY JUDGEMENTS
The EU–NATO defence relationship is interconnected through EU funding that supports Member States to meet NATO Capability Targets and defence objectives in procurement, defence-industrial development, and capability development.
The failed launch of the Kallas initiative suggests that some Member States view additional planning mechanisms as potentially duplicating existing structures.
The EU’s influence is increasing through financing, procurement and defence-industrial development, with mechanisms such as SAFE and Readiness 2030 supporting national investments that assist Member States in meeting NATO Capability Targets.
Member States retain control of budgets and procurement, while NATO Capability Targets are incorporated into national programmes, with EU funding able to support implementation.
ANALYSIS
EU foreign policy chief Kaja Kallas had planned to form an advisory group on European defence consisting of former political and military leaders to develop recommendations for closing European capability gaps. Although the panel included experienced figures such as former NATO Secretary-General Anders Fogh Rasmussen, who was reported to be chair, with 150 invitations reportedly sent for the formal launch in Brussels on September 7, the event was cancelled one day prior. Reports that major states objected to the Kallas initiative identify Germany, France and Italy, with a German defence ministry spokesperson stating that NATO is responsible for military capability planning. The failure to launch the Kallas initiative highlights disagreement between Kallas’ diplomatic service and some European Member States, which may reflect concerns over an additional layer of defence planning. Simultaneously, the objection of EU member states may also indicate resistance to EU-level replication of existing defence planning mechanisms.
NATO’s Defence Planning Process (NDPP) provides a framework that includes 14 planning domains for developing Alliance capabilities. The NDPP identifies how Allies can provide the necessary forces and capabilities for collective defence while ensuring these forces are prepared, equipped, and trained. Inside the NDPP, requirements are apportioned to each Ally as Capability Targets, which identify existing and future capabilities alongside priorities and timelines. As part of national defence planning, the Capability Targets are integrated into national plans, with NATO providing support through multinational initiatives. With the existence of the NDPP, EU member states may interpret the Kallas initiative as duplicating existing defence planning while also creating the potential for conflicting advice.
The European Defence Agency (EDA) supports EU Member States in developing defence capabilities, including the Capability Development Plan (CDP). The purpose of the CDP is to provide Member States with an assessment of European defence capability requirements and assist with defence planning, priorities and cooperation. Although the CDP has existed since 2008, it was revised in 2023 to incorporate lessons from the war in Ukraine, with 14 priorities across five military domains identified, with eight further priorities as strategic enablers and force multipliers. The 2023 review was in-depth and assessed military potential and EU capabilities. With the EDA’s CDP responsible for EU defence capability planning, the proposed Kallas advisory group would add another layer alongside EU planning mechanisms and NATO’s NDPP.
To support capability development, the EU conducts a Coordinated Annual Review on Defence (CARD). Since 2017, CARD has identified opportunities for defence cooperation and collaboration and recommendations for capability development and acquisition. CARD works in tandem with the EDA and the European Union Military Staff (EUMS), with recommendations on how to collaborate on capability development, research and technology to strengthen capabilities. Accelerated by the war in Ukraine, greater emphasis has been placed on planning convergence between Member States to increase defence integration and develop projects. As most EU Member States belong to NATO, coordination between the EU and NATO is necessary for interoperability and capability assessments within a formal relationship that has existed since the early 2000s. Further efforts to deepen EU–NATO cooperation are evident in several Joint Declarations in 2016, 2018, and 2023, alongside the NATO Strategic Concept and EU Strategic Compass in 2022. With significant overlap and integration already evident between NATO and the EU, the addition of the Kallas initiative could be interpreted by Member States as another level of defence planning.
The addition of SAFE funding enables greater financing opportunities for Member States to support procurement and address capability gaps. Common procurement is encouraged through projects which generally require at least two participating countries, with at least one being a Member State, while Ukraine and EEA–EFTA countries are able to participate conditionally. Joint projects and procurement aim to increase cohesion and interoperability and strengthen defence capabilities. To address European defence challenges, the European Commission released a white paper in 2025 that presented a defence roadmap titled ‘White paper for European defence – Readiness 2030’. The strategic framework outlined the EU’s approach, identifying investment requirements, objectives, industrial measures, military mobility and readiness. Part of the plan includes legal and financial support mechanisms with the potential to mobilise up to €800 billion in additional defence investment, primarily through increased national expenditure, to strengthen Member States' defence capabilities. Inside the EU, levels of defence planning exist with frameworks and guidelines that support the strengthening of joint and national defence; however, the financial and industrial conditions enable Member States to build capabilities.
Under NATO, national governments still control defence budgets and procurement and maintain ownership of most forces and equipment. Most systems are nationally owned and operated, while some NATO capabilities are collectively owned and operated. With Capability Targets allocated through NATO, governments incorporate the targets into national defence planning, allowing national-level decision-making on how those targets will be met through procurement, national programmes or multinational cooperation. Through SAFE, EU Member States have the potential to request loans, with decision-making on defence loans remaining autonomous, highlighting that defence organisation can be decided nationally, but investment may be increasingly influenced by EU institutions. The failure of the Kallas initiative suggests that Member States may wish to retain national decision-making that is already embedded in an interconnected NATO–EU system while avoiding additional planning mechanisms that may duplicate existing structures.
ASSESSMENT
NATO remains central to European defence through the NDPP, with primary responsibility for Alliance-level collective defence planning and capability requirements. The EU is increasingly developing its own capability-development frameworks, accelerated in part by the war in Ukraine; however, its influence is exercised through financing, procurement cooperation and defence-industrial development. National governments receive Capability Targets through the NDPP; however, they retain decision-making over procurement, forces, budgets and implementation. Given that many EU Member States are also members of NATO, there is overlap and coordination on defence between the two institutions. Rather than institutional competition, the EU–NATO relationship functions more as an interconnected system, with each institution performing different but overlapping roles within European defence, while facing increasing internal and external pressure.
The resistance to the Kallas initiative does not necessarily indicate a rejection of EU involvement in defence but may instead reflect recognition of NATO’s existing role and the current EU mechanisms. EU defence efforts include SAFE, common procurement, industrial development and the Readiness 2030 framework, which Member States are participating in. NATO–EU coordination may be clarifying institutional roles, with Member States receiving EU financing and capability-development support, alongside NATO defence and capability planning. Under NATO planning, Member States also retain national defence decision-making, alongside national ownership of most capabilities; Member States may have concerns over greater EU-level planning reducing national influence or complicating NATO processes. The failure of the Kallas initiative could also suggest that Member States accept existing structures to meet NATO Capability Targets but are more cautious about additional advisory mechanisms that could duplicate existing planning frameworks.
Both the EU and NATO have made significant efforts to increase defence investment, capabilities and interoperability. Overlapping efforts to strengthen defence have reinforced shared EU–NATO aims, with EU financing supporting national investments that can assist Member States in meeting NATO Capability Targets through procurement. EU funding mechanisms have remained largely flexible while allowing Member States to retain decision-making; however, the risk remains that as EU funding increases, so too could its influence expand over national defence investment and procurement decisions through conditions attached to procurement and cooperation. NATO–EU priorities remain broadly aligned, which reduces the potential for tension between their policies and contradictory recommendations.
STRATEGIC INDICATORS
EU–NATO integrated defence objectives
▲ Increasing
EU-Level Defence Planning Authority
► Stable
EU Defence Financing and Procurement
▲ Increasing
INDICATORS TO MONITOR
Diplomatic statements from EU foreign policy chief Kaja Kallas indicating next steps or an alternative advisory group.
Diplomatic statements from NATO on its role in defence capability planning.
Progress on SAFE-funded defence projects and procurement between Member States.
Revised NATO Capability Targets and evidence of EU financing to support implementation.
Statements from Member States on support for or objection to EU-level defence planning.
Further EU–NATO coordination on capability development, procurement and defence-industrial cooperation.
Conclusion
The resistance to the Kallas initiative from large EU–NATO members suggests that it may be difficult to reintroduce the initiative in another form, particularly while the EU and NATO have existing strategies and measures in place. As defence expenditure increases, and with Member States and Allies having specific targets, the central challenge may be to manage institutional boundaries and the relationship between EU funding and the implementation of NATO Capability Targets. While common objectives remain, it is likely that the current EU–NATO arrangement will remain in place in the short term, although the balance of influence within the arrangement may continue to evolve.
SOURCES
NATO
NATO — Defence Expenditures and NATO’s 5% Commitment NATO source
NATO — NATO Defence Planning Process NATO source
NATO — NATO’s Role in Capability Development NATO source
NATO — Relations with the European Union NATO source
European Union and European Defence Agency
European Commission — SAFE: Security Action for Europe European Commission source
European Commission — Future of European Defence / Readiness 2030 European Commission source
European Defence Agency — Capability Development Plan EDA source
European Defence Agency — Coordinated Annual Review on Defence (CARD)https://eda.europa.eu/what-we-do/EU-defence-initiatives/coordinated-annual-review-on-defence-(card)
Reporting
Defense News — EU Abruptly Shelves Kallas-Led Defense Panel After Pushback from Berlin, Paris, Rome Defense News source