1. The Strategic Shift – Europe Moves To A War Economy Logic
Europe is undergoing a profound shift from a peacetime, rules-based industrial model, to something closer to the logic of a war economy.
This shift has not been formally or officially declared. It is emerging through necessity, driven by the Ukraine war and Europe's fear of Russian expansionism, and the recognition that existing systems are unable to sustain the current high-intensity conflict much longer.
Three strands define this transition. First, the problems. Colby’s critique of the fragmentation of the European industrial base. Second, a prototype solution. The ELSA-style attempt at industrial integration. And third, the already functioning drone supply chain centred on Ukraine.
Taken together, they show a clear direction of travel. Europe is moving from fragmented sovereignty towards networked co-production.
War economy - An economic system organised primarily for sustained military production and conflict readiness.
Fragmentation - A condition where multiple national systems operate separately rather than as a unified whole.
2. Colby – The Critique Of European Protectionism
Elbridge Colby, US Under Secretary of Defense for Policy, provides the intellectual starting point. His argument is direct. Europe cannot sustain a modern industrial war because its defence base is nationally siloed, politically protected, and structurally inefficient.
When he calls for the removal of protectionist trade barriers, the meaning is operational rather than ideological. He is arguing for the removal of internal frictions that prevent scale, speed, and integration across borders.
In practical terms, this means cross-border production, shared procurement, and the creation of a unified industrial base capable of producing munitions at volume.
The implication is stark though many would say rather obvious. Europe must behave as a single industrial system or it will remain strategically weak, populated by "bonsai armies".
Colby defence framework - A strategic doctrine associated with Eldridge Colby that focuses on great power competition, especially with China, and emphasises a “denial strategy”, rather than confrontation, supported by large-scale industrial capacity and greater burden-sharing by allies, particularly in Europe. It argues that wars are ultimately decided by production, integration, and the ability of allied systems to operate as a single industrial base.
Protectionism - Policies that favour domestic industries by restricting foreign competition.
Procurement - Government purchasing of military equipment and services.
3. ELSA – The First Concrete Response
The European Long-Range Strike Approach represents an early attempt to respond to this critique in concrete terms.
Led by France and Germany, and involving partners such as United Kingdom and Ukraine, the initiative focuses on developing long-range strike capabilities and integrating missile and drone production across borders.
Its most important feature is institutional rather than technical. It sits outside the formal structures of the European Union. This allows decisions to be taken and relatively quickly, it enables the participation of non-EU states, and it reduces regulatory "red tape".
ELSA is therefore best understood as a prototype. It is not simply a weapons programme but an emerging model for how European defence industry might be organised in the future. Keeping in mind that private sector supply chain integration is well advanced in Europe - examples abound, perhaps the best being Airbus.
Strategic autonomy - The ability to act independently without reliance on external powers.
Mini-lateral - Cooperation between a small number of states outside large institutions.
4. The Drone Ecosystem - Practice Ahead Of Policy
The most advanced form of integration is already operational. This is the distributed drone supply chain centred on Ukraine.
Components are sourced across Europe. Financing and technical support are provided by European states and networks. Final assembly takes place within Ukraine, where systems are adapted rapidly to battlefield conditions.
Recent incidents in Finland and the Baltic states confirm that Ukrainian drones and debris from their operations have entered NATO airspace. This is no longer theoretical. It is documented: drones are launched from Ukraine, they pass into NATO airspace and follow the Polish, Baltic and Finnish borders before entering Russia and striking deep into pre 2014 territory.
At the same time, an important distinction must be maintained. While there is confirmation of Ukrainian drone incursions into NATO airspace, there is no public evidence of deliberate routing through NATO airspace with the consent of NATO governments.
Russia interprets the supply chain itself as evidence of participation. European governments reject that interpretation and maintain a legal and political distinction between support and direct involvement.
The result is a grey zone. Industrial integration is deep and real, but operational responsibility remains contested.
Distributed production - Manufacturing spread across multiple locations rather than a single central system.
Co-belligerency - Being effectively engaged in a conflict alongside another state.
5. The Emerging System - A Europe Outside The EU
When these strands are considered together, a deeper structural change becomes visible. Europe is not reforming its existing institutions in order to meet wartime demands. Instead, it is building a parallel system alongside them.
This emerging system is based on coalitions rather than treaties. It is functionally integrated but politically deniable. It aligns closely with NATO while remaining only loosely connected to EU structures.
The role of the United Kingdom is decisive. Despite being outside the EU, it is central to this evolving system. That alone demonstrates that the future European defence architecture will not be defined by EU membership.
The implication is clear. The real European defence system is taking shape beyond the formal boundaries of the EU.
Parallel system - An alternative structure operating alongside existing institutions.
Industrial integration - The linking of production systems across countries into a unified network.
6. Risks, Tensions And Contradictions
This transition brings both advantages and risks. Greater integration allows faster production, larger unified market and expected reduction in unit costs, and thus improved military effectiveness. At the same time, it introduces political and strategic tensions.
EU cohesion may be weakened as key functions migrate outside its structures to a new Europe-centred military command. Lines of responsibility become blurred, particularly in areas such as drone operations and supply chains. The risk of escalation with Russia increases as European direct involvement deepens and inevitably becomes more blatant.
At the centre of this lies a fundamental contradiction. Europe seeks efficiency through integration, yet nation states remain reluctant to relinquish sovereignty. This tension is unresolved and will shape future developments.
Escalation - An increase in the intensity or scope of conflict.
Sovereignty - A state’s authority to govern itself without external control.
7. Bottom Line
Europe is moving towards a networked war machine economy.
Colby identifies the structural weaknesses. ELSA represents an early institutional response. The drone ecosystem shows that integration is already happening in practice.
The key insight is that this transformation is not being achieved through formal self-reform. It is being achieved through circumvention of an existing fossilised system.
Networked system - A structure in which multiple independent actors are connected into a coordinated whole.
8. References
Section 2 – Colby
- Elbridge Colby speech
https://www.war.gov/News/Speeches/Speech/Article/4461862/remarks-by-under-secretary-of-war-for-policy-elbridge-colby-at-the-ukraine-defe/ - Colby's Strategy http://www.livingintheair.org/2026/04/will-russia-deal-with-ukraines-european.html
Section 3 – ELSA And European Defence Integration
- German Federal Ministry of Defence
https://www.bmvg.de - International Institute for Strategic Studies
https://www.iiss.org
Section 4 – Drone Incidents And Supply Chains
- Reuters
https://www.reuters.com - Royal United Services Institute
https://rusi.org - Center for Strategic and International Studies
https://www.csis.org
Section 5 – Structural Analysis
- NATO
https://www.nato.int - European Commission
https://ec.europa.eu
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