Capital is flowing into European defence at a scale and speed that would have been unthinkable five years ago. Governments are raising spending targets, private investors that once avoided the sector are moving in, and a new generation of defence tech companies is attracting venture and private equity funding across the continent.
But the system through which that capital must travel was built for a different world. Procurement systems were designed for an era of relative geopolitical stability, when defence was largely a government monopoly, optimising for cost over speed. Environmental, social, and governance (ESG) frameworks and banking compliance regimes reflected a broader shift in capital markets that steered investment away from defence.
