How to avoid EU arms spending spree being lost to corruption and bribery?
By Francesca Grandi and Juhani Grossmann, , The EUobserver, 23 March 2026
Geneva/Basel - Europe is about to spend billions of euros on defence. But what happens if citizens later discover that part of that money was lost to corruption, problematic procurement chains, or poorly supervised contracts?
At a moment when defence spending is rising rapidly, governance and integrity will determine whether Europe’s rearmament strengthens public trust – or erodes it.
Through instruments such as Security Action for Europe (SAFE), the European Defence Industry Reinforcement through Common Procurement Act (EDIRPA) and the European Defence Fund, Brussels is taking a central role in financing Europe’s defence.
But these funds will flow through governance structures built for a very different era — one where funding was scarce, suppliers predictable, and contracts stretched across decades.
That is not today’s defence procurement reality.
Anti-corruption safeguards were not designed for the current scale, urgency, or geopolitical pressure. The gap between Europe’s financial and technological ambitions in defence and its governance capacity is widening.
Exposure to reputational risk
That gap creates risks, but it also creates an opportunity.
For the first time, EU-level borrowing and grant mechanisms will directly underpin member state defence procurement and industrial cooperation.
This significantly expands the EU’s exposure to reputational risk.
Recent corruption scandals are already straining public trust in Europe’s emerging defence architecture.
In this context, governance failures linked to defence spending will be interpreted as evidence that the EU can mobilise resources but cannot adequately supervise their use or protect taxpayers’ money.
But here is the opportunity: if accelerated defence investment is matched by credible safeguards, Brussels can show it is both effective and accountable.
That would strengthen institutional legitimacy at a time when geopolitical pressure is seriously testing it.
Myth safeguarding slow defence production
Scaling up production requires industry to move quickly. Critics argue that stronger oversight is expensive, stifles business, and slows delivery.
Experience suggests the opposite.
Explosive growth without safeguards often leads to governance failures that delay procurement, trigger litigation, create export hurdles and inefficiencies, and undermine quality and safety standards.
Undisclosed conflicts of interest, opaque subcontracting chains, legal disputes over award decisions, or inadequate audit capacity create far greater disruption than clear requirements and structured oversight.
Embedding transparency, conditionality, and oversight in EU defence financing is therefore not only politically advisable, but sound risk management.
In practice, this means:
- clearer and harmonised compliance and reporting requirements for member states using EU funds
- stronger coordination between EU anti-fraud bodies and national audit institutions
- enforceable conflict-of-interest and revolving door standards
-minimum transparency and traceability requirements across subcontracting chains.
Who would argue that these are bad for business?
Effective anti-corruption measures are not free, either for companies or for EU institutions designing defence procurement. But they cost far less than the investigations, delays, political fallout, and reputational damage that corruption and waste generate later.
In many cases, better governance will directly support innovation and fair competition — and with it, the competitiveness that the Draghi report places at the heart of Europe’s future.
One example is clearer supervisory responsibilities when EU borrowing intersects with national procurement systems. At present, there is no single source of information on anti-corruption compliance expectations across EU member states for defence companies.
This creates a de facto regulatory barrier that can exclude agile start-ups — including Ukrainian companies with valuable battlefield-tested technologies — from competing for EU-funded projects.
The result is less competition, higher prices, fewer innovative solutions entering the European defence ecosystem, and venture capital discouraged from stepping in.
The financial scale of Europe’s rearmament also raises a broader political question.
Loans today will be serviced by national budgets tomorrow. Governments are already making trade-offs between defence spending, social programmes, industrial policy, and the energy transition.
Sustained public support for rearmament cannot be taken for granted. It will depend on whether citizens believe resources are used fairly and responsibly.
How will defence companies behave?
It will also depend on how defence companies behave. They stand to benefit massively from the new EU funding streams.
As Brussels encourages joint procurement and cross-border cooperation, expectations around lobbying transparency, internal compliance systems, and subcontracting integrity must rise accordingly.
Governance failures on both sides of defence procurement — public authorities and the firms that benefit — risk eroding that political buy-in.
They also create openings for adversaries seeking to portray Europe’s rearmament as opaque, self-serving, or captured by narrow interests.
The seeds of disinformation are easy to sow where transparency is limited and accountability fragmented. Parliamentary scrutiny, investigative oversight, and civic engagement reduce the space where corruption and foreign influence operations can intersect.
Limiting scrutiny in the name of urgency may accelerate deals and decisions in the short-term, but it weakens efficiency and democratic resilience in the long-term. And that resilience is central to Europe’s security.
Most political debate focuses on how quickly Europe can rearm. The real question is whether it can do so while maintaining strong governance and anti-corruption safeguards.
Those safeguards are key to managing risks and achieving real security. They protect programme continuity, institutional credibility, and fiscal discipline while reducing the risk of costly disruption or manipulation by adversaries.
Europe’s defence surge can and should deliver more than military capability. It must also reinforce the democratic foundations that make European security credible and sustainable.
Whether it does will depend on the choices European leaders make now.
