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Absolute record for military spending, budgets up 17% on the continent and yet factories are not keeping up. A gap has opened between orders and deliveries that public money alone will not fill. The race that has opened is not only industrial: it is financial, and it is happening now.
Never seen before in an arms show
Hall 4 of the Le Bourget exhibition center will welcome bankers from June 15 to 19. Not behind the scenes, not in confidential suites: on stands, facing the public, among armored vehicles and missile systems. Eurosatorythe main world exhibition dedicated to land armaments which is held every two years in Paris, is opening for the first time in its fifty-year history a space entirely dedicated to financing the defense industry. BNP Paribas, Credit Agricole, Société Générale, Credit Mutuel, BPCE et The Postal Bank will appear as full exhibitors. Allianz Holding France and the office Largillière Finance will join them. Private equity funds Weinberg Capital Partners et Apollo Minerva will also be present there.
For several years, the pressure of environmental and social criteria, the famous ESG criteria which today guide the investment policy of most large banks, had led these establishments to publicly distance themselves from the defense sector. Three factors have disrupted this balance in the space of twenty-four months: the war in Ukraine from February 2022, the political injunctions of European governments to financial establishments, and the progressive reclassification of defense financing as a contribution to collective security, and no longer as a risky activity reputational.
On June 17, a day of conferences will bring together the French Banking Federationthe European Investment Bankoffice Bain & Companythe General Directorate of Armaments, Bpifrance and the network of investors Defense Angels. The agenda: remove the obstacles to financing the companies that make up the French and European defense industry.
The figures that measure the delay
$2,718 billion. This is the total amount of global military spending in 2024, according to data compiled by the Stockholm International Peace Research Institute, an absolute record, up 9.4% over one year. Europe accelerated faster than average: its defense spending increased by 17% to reach $693 billion. European members of NATO spent $454 billion over the same period. Eighteen Alliance countries now spend at least 2% of their GDP on their armed forces, compared to just a handful in 2021.
Germany alone provides the most brutal demonstration of this shift. Its defense budget went from $55 billion in 2022 90 billion in 2024. In two years, Berlin has increased its military spending by 64%. No industrial device ramps up at this speed. Since the end of the Cold War, European states have deliberately reduced their military production capacities. Manufacturing runs have become short, stocks have been reduced to a minimum, and for many critical components, a type of propellant powder, a specific alloy, an electronic component, there is often only one supplier in Europe. Rebuilding these sectors takes years, sometimes a decade.
Increasing an order budget therefore does not create factories. NATO member states accumulate 1,506 billion dollars of spending in 2024, or 55% of the global total. Honoring these orders within operationally useful deadlines requires an industrial device that Europe does not yet have in the required volumes. It is precisely this lack that the financial center ofEurosatory 2026 attempts to address.
What banks have changed – and why
The reclassification of defense companies off the exclusion lists for ESG criteria has materially reopened bank balance sheets to this sector, a process which accelerated between 2023 and 2024 in most large French establishments.
For the small and medium-sized businesses that make up most of the defense industry, this banking distance had measurable effects. Borrowing to finance an increase in production rates, secure a stock of components or recruit qualified technicians encountered refusals or prohibitive conditions. Companies holding signed public contracts found themselves unable to pre-finance their own growth.
Weinberg Capital Partners et Apollo Minerva have invested in this segment. These specialized funds offer defense SMEs financing that network banks refused or did not know how to structure. Their presence at Eurosatory 2026 marks formal recognition of this market.
The question that this standardization poses remains without a consolidated public response: according to what criteria do these financiers distinguish, within the defense sector, the companies and technologies that they agree to support from those that they reject?
ReArm Europe: 800 billion on paper
In 2025, the European Commission, the Union’s executive, launched the plan ReArm Europe with a stated objective of 800 billion euros. This figure is not a check: it combines additional national debts that each state may contract, public guarantees and budgetary redeployments, all made possible by a relaxation of European rules which normally regulate state deficits members.
The Union had already deployed several instruments upstream. The program EDIRPAendowed with 500 million eurossubsidizes purchases of military equipment carried out jointly by several member states rather than separately. The program ASAPwith an identical envelope of 500 million eurosfinances the rise in production of artillery ammunition and of missiles. The European Defense Fund has 8 billion euros over the period 2021-2027. There European Peace Facility reached 17 billion euros.
The European defense industrial strategy, adopted in 2024, set two quantified objectives for 2030: 50% of acquisition budgets allocated to European manufacturers, and 40% of equipment purchases carried out jointly between Member States. Neither is achieved today. Each state separately orders similar equipment in volumes insufficient to influence prices, a pattern that European manufacturers designate as their main competitive handicap against the Americans and Koreans, who benefit from massive and consolidated orders.
The General Directorate of Defense Industry and Space of the European Commission will participate in the financing conferences organized on June 17 in Eurosatory. Brussels is no longer content with defining budgetary frameworks: its representatives go down to the level of business ecosystems.
The battle for critical technologies
Behind the question of industrial financing lies a longer and more uncertain race: that of disruptive military technologies, on which the operational superiority of the European armies will depend in ten or twenty years.
Le Hall 5B d’Eurosatory this year welcomes around 60 international start-ups grouped under the name Eurosatory LAB. Their fields: artificial intelligence applied to targeting, terrestrial robotics, cybersecurity, resilient navigation in environments where GPS signals are jammed or cut, new materials. These companies are working on technologies that determine who sees the adversary first, who can still communicate when networks are attacked, who has drones capable of operating without a human pilot.
Financing this type of innovation poses a problem distinct from traditional industrial financing. Military qualification cycles, the process by which a military tests, certifies and integrates equipment, can exceed five years. The markets are regulated, there are few customers, and initial volumes are low. A classic venture capital fund, which expects a return on investment in three to five years, has difficulty adapting to these constraints.
Bpifrancethe DGA et Defense Angels intervene to fill this gap. Bpifrance has financial instruments that allow a start-up to develop without ceding shares of its capital to external investors, loans and repayable advances rather than equity investments. Defense Angels mobilizes private investors with sectoral knowledge of the military field.
The risk that these actors seek to prevent is documented: due to a lack of sufficient European capital, technologies developed in France or Germany end up bought or financed by American funds, which transfers control of intellectual property outside the continent. In the years 2000 and 2010, several dozen European companies specializing in military electronic components followed this path. Their patents, their know-how and their export capacities are today controlled from the United States.
