Europe’s Fighter Jet That Never Flew

Hello! Today is July 6, 2026 and here is your EU news summary for the week. Feel free to share this newsletter with friends and colleagues, and follow us on LinkedIn.

This week’s expert is Juraj Majcin, from the European Policy Centre (EPC) in Brussels. Juraj is a policy analyst focusing on European and transatlantic security and defence, the defence industry and innovation. His analysis has been featured in international outlets including Euractiv, Newsweek, Reuters, CNN, and Sky News. He is from Slovakia.

The Franco-German Future Combat Air System (FCAS) was meant to be the embodiment of European strategic autonomy, a next-generation fighter, drones, sensors and combat cloud that would replace the Rafale and Eurofighter and prove that Europe could build its most complex military systems without the United States.

Its failure shows that Russia’s war against Ukraine has not erased Europe’s old defence divisions. However, the wrong lesson would be to conclude that deeper defence-industrial cooperation is impossible. The project proves that cooperation built around prestige platforms, unclear leadership and incompatible national requirements is unlikely to deliver.

A fighter jet promised for the 2040s will not deter Russia in 2026. Europe needs a more pragmatic approach focused on expanding its defence-industrial capacity for high-intensity warfare, rather than investing in another generation of big-ticket prestige projects.

Lesson 1: Weapons systems are political projects first

Major weapons systems are never just engineering projects. They express national strategy, military culture, industrial power and sovereignty.

France entered FCAS as a nuclear power with an ambition, however constrained, for global military reach. Paris did not see the project simply as an air-superiority fighter. It also needed a platform linked to nuclear delivery, aircraft-carrier operations and export potential. These requirements were connected to France’s nuclear deterrent, its carrier-based aviation, its global military posture and the central role of Dassault in French defence sovereignty.

Germany approached the programme differently. Berlin did not need the same aircraft. Its nuclear role within NATO is tied to US nuclear sharing and the F-35, not to a sovereign French-style nuclear-capable and carrier-capable fighter. Germany’s priorities were closer to NATO air operations, support for land forces and securing a substantial industrial role for Airbus and German suppliers. France and Dassault, however, were reluctant to dilute design authority or share the most sensitive technologies on equal terms.

This created a contradiction at the heart of the programme. FCAS was presented as a European project, but the companies and governments involved remained structured around national priorities, national champions and national definitions of sovereignty. Making a programme “European” does not automatically create a European industrial culture. More often, it creates a more complicated negotiation between national industries, each backed by its own government, each trying to protect jobs, intellectual property, design authority and future exports.

Lesson 2: Europe needs less symbolism and more delivery

The main European security challenge is not the absence of a symbolic sixth-generation fighter. It is the shortage of capabilities that can strengthen deterrence now.

Rather than concentrating political energy and money on flagship platforms that may enter service only in the 2040s, Europe should focus on urgent needs that can be met within the next five years.

This requires a break with the old procurement pattern. Too much European defence spending still flows through national channels, often through direct awards to favoured domestic suppliers. As Andrius Kubilius (the EU’s first Commissioner for Defence and Space) has warned, European governments still award around 80 per cent of defence procurement through direct contracts under Article 346 TFEU, reinforcing national fragmentation instead of building a genuinely competitive European defence market.

The objective should be more open, competitive and coordinated procurement across borders. Joint purchasing should become the norm for systems that already exist, rather than the exception.

Governments also need to provide multi-year orders, clearer funding commitments and support not only for prime contractors but also for the suppliers where many bottlenecks sit — notably engines, electronics, sensors, chips, propellants, energetics, machine tools and specialised components.

What comes next?

The next likely test is the Main Ground Combat System (MGCS), the Franco-German project intended to replace the Leopard 2 and Leclerc tanks. MGCS is still formally alive, but it is already repeating the FCAS pattern: Franco-German rivalry, industrial workshare disputes, different military priorities and timelines that stretch far beyond Europe’s immediate security needs. The strain is now serious enough that Rheinmetall’s CEO has warned a French exit ‘cannot be ruled out’, as Paris is considering sharp funding cuts to the programme.

The Global Combat Air Programme (GCAP) looks more promising — but only comparatively. The UK, Italy and Japan have so far avoided the worst Franco-German traps. GCAP has fewer partners, clearer momentum and a stronger industrial structure. But it is not immune to the same risks. The UK’s fiscal room is limited, and the possible entry of new partners — including Germany — could bring additional money and industrial capacity, but also new workshare politics.

A more positive example is KNDS. Ahead of its planned dual listing in Paris and Frankfurt, Germany is moving to acquire a 40 per cent stake in the Franco-German land-systems group, matching France’s planned 40 per cent holding and giving both governments equal control over a company that produces the Leopard 2 and Leclerc tanks. This is still state-driven industrial policy, but it points to a more practical model of European defence cooperation — consolidated around existing production capacity, rather than relying only on distant prestige projects.

On our radar

IRELAND’S TECH TEST • Ireland assumed the rotating Council of the EU presidency on 1 July, taking charge of legislative files that strike at the heart of its economic model built on hosting US tech giants.

Dublin will chair talks on “tech sovereignty”, telecoms reform and online safety, even as NGOs and some member states warn of conflicts of interest if Ireland shepherds rules affecting its biggest taxpayers.

The government counters that previous Irish presidencies delivered tough compromises on GDPR and banking union, pledging to act as an “honest broker”.

GERMAN TAX RESET • Chancellor Friedrich Merz has announced a €10 billion tax package to jolt Germany’s sluggish economy and reassure Merz’s coalition partners. Families on middle incomes would see several hundred euros of relief a year, while the top marginal rate climbs from 45 to 47 percent to shore up revenues.

The plan also loosens rules on Sunday trading and fixed‑term contracts, framed as a nudge to get more people into work and support small firms. Business groups welcome movement but complain the lack of a structural shift.

SIRI • Apple’s CEO Tim Cook has held what both sides called “constructive” talks in Brussels with EU tech commissioner Henna Virkkunen over how the company’s new “Siri AI” can comply with the Digital Markets Act (DMA). Apple has postponed launching the upgraded assistant in the EU, arguing DMA interoperability rules could force it to expose sensitive device functions to rival AI services.

The dispute comes after a decade of EU tech rule‑making, from GDPR and the DMA to the Digital Services Act and the recently agreed AI Act, which have repeatedly forced Big Tech to delay or adapt products in Europe.

Brussels rejects requests for a de facto “regulatory holiday”, warning gatekeepers must integrate competition and safety by design. A proposed Apple “trusted agent” framework will test whether Brussels can reconcile strict rules with rapid AI rollouts.

DIGITAL SERVICES TAX • President Donald Trump has threatened tariffs of up to 100% on imports from countries that introduce or reinstate digital services taxes aimed at large US tech companies. He argued such levies would sidestep global talks (at the OECD) on taxing digital services and unfairly target American firms, signalling a readiness to override trade deals if needed.

EU institutions have long floated an EU‑wide digital services taxes, but several capitals balk at provoking Washington or undermining OECD efforts on global tax reform.

Several governments are pushing to fold a digital levy into the EU’s “own resources” to help fund the budget without fresh national cheques. France has been the most vocal advocate of an EU‑level digital tax, backed at various points by Italy, Spain, Austria and a group of smaller states that already run or planned national digital services taxes.

Their pitch is that a common digital revenue stream would partly repay joint borrowing and finance new priorities, so national treasuries would not need to increase gross contributions to the EU budget. More budget‑frugal countries in northern and eastern Europe remain wary, fearing US retaliation and a slippery slope towards broader EU tax powers.

• A report by the European Think-tank Network on China, edited by Bernhard Bartsch and Claudia Wessling, argues that Europe’s response to China’s rise as a technology and innovation power remains fragmented.
• While much of Europe’s China debate focuses on chips and traditional manufacturing, the ECFR’s Janka Oertel and Nina Schmelzer warn that biomanufacturing may be the next industrial front, with China catching up fast in a field where Europe still has an edge.