European Defence Commissioner Andrius Kubilius called on member states to curb the market dominance of Europe’s largest defence contractors, warning that national procurement preferences are slowing the growth of smaller, innovative companies.

Speaking at the Eurosatory defence exhibition in Paris on Wednesday, Commissioner Kubilius said Europe’s defence market remains heavily concentrated, with the biggest contractors capturing a much larger share of government procurement than in the United States.

“In the United States, only 40% of procurement goes to the top ten defence companies,” he said. “Here in Europe, it’s between 67% and 90% for Germany, Poland and the UK.”

Kubilius said that up to 80% of defence procurement is awarded directly under Article 346 of the Treaty on the Functioning of the European Union, which allows governments to bypass competitive tenders on national security grounds.

“Direct awards can be necessary for security. But they have become the default. And this is out of balance,” he said.

The widespread use of exemptions has effectively created 27 separate national defence markets rather than a genuine European one, Kubilius argued, limiting opportunities for start-ups and small and medium-sized enterprises (SMEs) to compete and expand across borders.

“We are proud of our primes, but our start-ups and SMEs need space and opportunities too,” he said.

Kubilius went on to describe Ukraine as home to the world’s most innovative defence industry, arguing that battlefield necessity has transformed its military doctrine through the rapid development of drones and other technologies.

He said the European Union should integrate both Ukraine’s armed forces and its defence industrial base into Europe’s future security architecture.

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