Financial Hurdles for Europe's Defence Innovators

Europe's small and medium-sized defence companies face significant financial obstacles, hampering their ability to innovate and expand despite growing demand from ongoing conflicts. Difficulties in acquiring funding, particularly public financing, and challenges related to ESG regulations are major concerns, pushing firms to seek solutions abroad.

Europe's defence SMEs are struggling to secure financing vital for innovation and production, despite increasing demand from conflicts like the Ukraine war, according to officials and experts.

Public funding hurdles and ESG concerns deter banks from lending, hindering growth for smaller defence firms, says the Czech Defence and Security Industry Association.

The European Commission reported a debt financing gap limiting EU SMEs, urging clarity on ESG criteria to improve financial access, while US firms benefit from greater venture capital support.

(With inputs from agencies.)