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Defense financing opportunities: what levers can strengthen European sovereignty?

7 April 2025

A historic increase in France's defense budget

The 2024-2030 Military Programming Act (LPM) marks a major change for the defense with a total budget of 413.3 billion euros over seven yearsThis represents an increase of 40 % compared with the previous LPM (2019-2025). Visit Finance bill (PLF) 2025 provides for a budget of 50.5 billion euros for the Ministry of the Armed Forces and Veterans, an increase of 3.3 billion compared to 2024.

Budget priorities for the defense sector in 2025 :

Nuclear deterrence 508 million euros
Space 60 million euros for studies and 870 million euros for capacity acquisition
Information 600 million euros
Cyber defense 300 million euros
Innovation and disruptive technologies sales: 1.2 billion euros, including 450 million for drones and robots (+12.5 % on last year)

The emphasis is on strengthening strategic and technological capabilities, with increased investment in innovative fields.

A dedicated defense fund

In March 2025, the Banque publique d'investissement (Bpifrance) launched a 450 million euro fund dedicated to defense, enabling citizens to invest as little as 500 euros. The fund aims to strengthen the French defense industry in the face of a tense international environment. From public assistance are to be expected in this sector.

Acceleration of armaments programs

President Emmanuel Macron has announced the acceleration of orders for Rafale aircraft and an investment of 1.5 billion euros to modernize a strategic air base, including advanced nuclear missile technologies. This modernization is part of France's strategy to strengthen its nuclear deterrent and optimize the air force's operational capabilities.

A changing Europe of defense

European Defense Fund (EDF 2021-2027)

The EU continues to strengthen its strategic autonomy with the European Fund of defence, with 7.953 billion euros over the period 2021-2027. This fund is divided into two parts:

2.7 billion euros for collaborative defense research
5.3 billion euros for the development of military capabilities (co-financing of prototypes and weapons systems)

The European Peace Facility (EPF)

The European Peace Facility (EPF) is an extra-budgetary financial instrument of the European Union, established in March 2021, aimed at strengthening the EU's ability to prevent conflict, consolidate peace and reinforce international security. Initially endowed with a financial ceiling of 5.69 billion euros for the period 2021-2027, this ceiling has been raised several times to over 17 billion euros.

The EFF has been used extensively to support Ukraine. Between 2022 and 2024, the EU mobilized 6.1 billion euros under the EFF to meet Ukraine's military and defense needs. In March 2024, a reform increased the financial ceiling of the EFF by a further 5 billion euros, creating a specific assistance fund for Ukraine, bringing total financial support to 11.1 billion euros.

The reArm Europe plan: towards European strategic autonomy

In March 2025, France, the UK and Germany launched the reArm Europeto reduce dependence on NATO and the United States over a period of 5 to 10 years. the President of the European Commission, Ursula von der Leyenpresented a 800 billion euro European rearmament plandedicated exclusively to the European defense industry. Key directions include :

A budget flexibility clause allowing member states to temporarily increase their military spending up to 1.5 % of annual GDP without violating EU stability rules;
The use of joint loansfor an amount of 150 billion eurosguaranteed by the European budget. These funds will be used to finance joint strategic capabilities in the fields of cyber defensethe missile defense or even autonomous drone systems.

Artificial intelligence and defense: a revolution in the making

The February 11, 2025At the AI summit in Paris, the European Union announced the launch of the InvestAImobilizing 200 billion euros for the development of artificial intelligence. This investment aims to equip Europe with advanced capabilities in autonomous defense, cybersecurity and AI-assisted strategic operations.

The European and French defense landscape is in a state of flux, with record budgets, gradual autonomy from non-European partners and massive integration of cutting-edge technologies. The period 2024-2030 promises to be a phase of decisive acceleration towards a strategically independent and technologically advanced Europe.