Europe Builds €72Bn Maritime Shield. Shipbuilders Eye the Prize - EU Perspectives

Europe is attempting to stitch together a joint seabed defence project, but the funding remains remarkably thin.

The European Commission proposed five large-scale European Defence Projects of Common Interest in July, putting the Integrated Maritime and Seabed Defence project at the center of industrial attention. By late September, the Council of the European Union formally adopted the IMSD. The initiative aims to curb the severe fragmentation that plagues the continent’s naval procurement.

For decades, European governments bought custom equipment separately and in small batches. This habit kept production runs short and unit costs high.

Juan Mejino-López and Guntram Wolff of Bruegel wrote that the core purpose is overcoming this structural divide, noting that it should be able to both wage a war and protect whatever business is conducted underwater.

Fincantieri and TKMS saw an opening in this shifting landscape. In September, the two shipbuilders signed a memorandum of understanding to deepen cooperation in submarines and underwater systems. They plan to establish a collaboration framework by the end of 2026, subject to regulatory approvals.

Europe Builds €72Bn Maritime Shield. Shipbuilders Eye the Prize - EU Perspectives

Neither side calls it a merger, and no acquisition is involved. Both companies keep operating independently while existing contracts remain untouched.

Pierroberto Folgiero told reporters that the agreement is designed to leverage complementary strengths and expertise to better serve customers while contributing to the long-term development of Europe’s underwater capabilities. At a time when Europe is called upon to strengthen its defence capabilities, defragmentation represents a concrete and pragmatic path towards a more competitive and integrated industrial base, he said.

Oliver Burkhard pointed to strategy and trust. Our partnership with Fincantieri demonstrates what European industrial collaboration can achieve when it is built on trust and shared technological excellence, he said.

The financial scale of the undertaking dwarfs current commitments. The Commission initially estimated the IMSD project could involve €42 billion to €82 billion until 2045, with a later estimate narrowing the total between €43 billion and €72 billion.

Analysis by the think-tank Finabel stresses that these figures are indicative rather than confirmed EU budget allocations or guaranteed procurement envelopes. The Commission allocated an initial €325 million from the European Defence Industry Programme budget to jumpstart the five projects, leaving a vast gap against a total scale estimated at €270 billion.

Participation spans 22 EU member states, alongside Norway and Ukraine in the broader network. Yet, as of early November, no company-by-company list exists because the IMSD functions as a capability and industrial framework rather than a single signed contract.

The rules governing the initiative favor European primes while sidelining outside competitors. Under the legal basis of the European Defence Industry Programme, corporate beneficiaries must hold full legal and operational power to modify systems or substitute components by 2033.

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They cannot be restricted by non-associated third countries such as the US or China. Analysts note this design authority rule could lock American, British, and Asian firms out of prime positions, pushing them into tier-two supplier roles.

The United Kingdom remains effectively blocked from EDIP eligibility and funding despite commanding large subsea monitoring assets like Atlantic Net and RFA Proteus. Without a clear division of labour, the IMSD could duplicate NATO surveillance and national modernisation programmes.

Common surveillance test-beds managed by the European Defence Agency are scheduled for 2027, and they must use NATO’s STANAG 4817 data standard.

Initial operational capability is targeted for 2030 in the Baltic and Mediterranean basins, with full maturity planned for 2045.