Europe’s small arms companies struggle for cash despite military spending boom

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Despite rising global military spending, Europe’s small and medium-sized defense companies face challenges securing the financing needed for innovation and scaling production. Barriers include limited access to public funds, bureaucratic hurdles, and banks’ hesitation due to ESG compliance concerns. A 2024 European Commission report advises increasing EU-level funding and easing restrictions on EU financial instruments to bolster defense industrial capabilities. Czech defense ministry official Radka Konderlova highlighted one tech firm that struggled financially while working with Lockheed Martin on an F35 component, only finding support after government intervention. This illustrates the financial barriers smaller defense firms face despite their strategic importance.

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