KNDS in European Defence: Consolidation, Governance, and Strategy

European defence is at a turning point, marked by renewed political will to strengthen collective capabilities and reduce fragmentation. NATO remains Europe’s primary defence organization, but the European Union (EU) has developed important regulatory and financial tools (e.g. procurement rules, funding mechanisms) and cooperation frameworks to enhance military capabilities and the defence industrial base. High-level EU initiatives – from the Strategic Compass (2022) to calls for a “Defence Union” – reflect a consensus on the need for greater European strategic autonomy and integrated defence governance. However, the means to achieve this are still debated, and no single “unitary vision” for EU defence has been agreed.

Instead, Europe’s defence cooperation operates in multiple modes: a legislative mode focused on market integration, a coordination mode for joint capability development (e.g. under the European Defence Agency and PESCO), and a financial mode geared to bolstering industry via new funds. These overlapping governance modes mirror divergent member-state interests and illustrate the core challenge: EU governments have not yet collectively decided “what type of defense actor the Union should become”, and many remain hesitant to cede sovereignty in this domain. Within this strategic context, the creation of KNDS (the 2015 merger of Germany’s Krauss-Maffei Wegmann and France’s Nexter) can be seen as a landmark industry-driven response to Europe’s defence integration goals. It brings together two leading land-armament producers under joint Franco-German ownership and governance, directly supporting the EU’s broader political guideline of consolidating the European Defence Technological and Industrial Base (EDTIB).

EU leaders have long warned that Europe’s defence is unsustainable with a fragmented industry and dozens of duplicate systems. Indeed, European armed forces currently operate “29 different types of destroyers, 17 types of main battle tanks, and 20 types of fighter planes” across member states, whereas the United States uses just 4, 1, and 6 respectively. This proliferation of national variants undermines interoperability and economies of scale.