Up in the Air: What Could FCAS Mean for Common EU Defence Projects?

CSDS POLICY BRIEF • 6/2026

By Daniel Fiott

4.3.2026

Key issues

• The FCAS project appears to be over, at least in its original incarnation, although technological elements of the project may be salvaged, such as the development of a combat cloud;
• The case of FCAS serves as a cautionary tale for how to develop collaborative defence industrial programmes in Europe, especially when these projects involve large defence firms and member states;
• The failure of FCAS should not hinder plans for joint EU defence industrial programmes, but lessons from the failure of FCAS must be integrated into project planning sooner rather than later.

Introduction

We have no liftoff. The Future Combat Air System, FCAS or SCAF, has been grounded, at least in the eyes of Germany (and Belgium). Speaking in February 2026, Chancellor Merz questioned the military relevance of the project when he stated: “the French need, in the next generation of fighter jets, an aircraft capable of carrying nuclear weapons and operating from an aircraft carrier. That’s not what we currently need in the German military”. Although the main project partners – France, Germany and Spain – had previously agreed to common military requirements, Chancellor Merz made it clear that Germany does not share France’s need for an aircraft that can carry nuclear weapons or operate from an aircraft carrier. This is an interesting about-face given that the FCAS project, initiated in 2017, has always needed to cater to France’s military needs – no country will develop a capability they cannot use. Although the incompatibility of military requirements should have been known – and flagged – sooner, German doubts over FCAS come on the back of months of disagreement over technology transfers and project management.

Although billions of euros had already been assigned to the FCAS project, which resulted in work on early R&T and technology demonstrators, all was not well between the major industrial players, Dassault and Airbus. The major French industrial partner has decades of experience in producing aircraft on its own, and it has the technological “crown jewels” needed to develop an aircraft from start to finish. In this respect, Dassault has long argued that the governance of the FCAS programme should recognise the company’s central role, and that there should be no reason to transfer technology. The fear here was that Airbus and Germany were only interested in FCAS to acquire the technology needed to build aircraft on their own in the future. From Airbus and Germany’s side, the argument was that Dassault wanted Germany to pay for the FCAS’ development without any control or common technology development. A stalemate ensued.

It is this industrial and political impasse that has led to the end of FCAS as we know it. The ramifications of this are, as yet, not fully known. We are still to see whether Germany’s serious doubts about FCAS will result in the termination of the other French-German project, the Main Ground Combat System. Furthermore, at a time of great transatlantic pressure, when Europeans are seeking to take on a greater share of the defence burden, the inability to collaborate on defence projects is not a positive sign. In particular, the European Union (EU) has just embarked on its own defence industrial programme, which will see the creation of common defence projects. In this sense, legitimate questions are being asked about whether the death knell of FCAS means that EU efforts are similarly doomed to fail. This CSDS Policy Brief looks at this very dilemma and shares some preliminary reflections on the lessons learned.

A project for Europe? The effects of failure

Since its inception, FCAS has been more than a next-generation fighter aircraft programme. With a view to having the main project operational by 2040, it was conceived primarily by its main partners, France, Germany and Spain, as a replacement for existing generations of fighter aircraft, while also developing, in parallel, a combat system that integrated unmanned, cloud and space capabilities. FCAS had an important rationale, which was to develop a European fighter programme that could not conceivably be produced by any one nation, not on technological grounds per se, but rather in terms of available finances and added-value. Politically, FCAS was seen as a way to develop the European Defence Technological and Industrial Base (EDTIB), as well as European sovereignty and strategic autonomy. While never officially branded as an EU initiative, FCAS was seen as a test for French-German defence cooperation and the Union’s aspiration to act as a security provider rather than consumer.

At its core, then, FCAS represented an attempt to co-develop a new generation of military capabilities, “Made in Europe”. Yet the significance of FCAS extended beyond its technical specifications. It was, in many ways, a bellwether of European defence industrial cooperation. Since 2016, the EU has helped embed the logic of such cooperation in the European Defence Fund (EDF) and Permanent Structured Cooperation (PESCO). Here, the logic was that European states can pool resources, share risk and consolidate demand to overcome fragmentation in defence markets. In this respect, FCAS had been presented as a flagship endeavour for Europe that followed the tumultuous years following Brexit and the first election of President Donald Trump in 2016.

The relevance of FCAS could also be found in the structure of the EDTIB. Europe’s defence industry remains partially integrated with duplicative platforms, divergent procurement cycles and uneven levels of technological sophistication. FCAS was meant to rationalise this landscape by fostering cross-border industrial integration in the aeronautics sector. Major prime contractors such as Dassault, Airbus and Indra Sistemas were to collaborate across workshares, creating not only a combat aircraft but a template for future European common defence projects. All of this came at a time of transatlantic headwinds and competition from other next-generation aircraft programmes being developed by the United States (NGAD), China and other Europeans (GCAP). Against this backdrop, FCAS was France, Germany and Spain’s bid to remain relevant in aerospace.

The failure of FCAS, therefore, not only poses an industrial setback but also reputational damage. This will feed narratives that Europe cannot deliver its own complex, high-end capabilities and that many European nations will remain dependent on American systems in the future. Yet to equate the fate of broader EU defence industrial cooperation with the experiences of FCAS would be analytically flawed. While FCAS carries symbolic weight, it is not synonymous with Europe’s overall defence industrial trajectory. Indeed, the programme’s flaws highlight structural weaknesses that, if addressed, could strengthen rather than undermine future initiatives in the EU. The central question is whether the EU and its member states can internalise the lessons of FCAS’ shortcomings.

Industrial rivalry, political control

The difficulties surrounding FCAS stem from a combination of industrial competition and political rivalry. These factors are neither novel nor unique, and they are characteristic of European defence cooperation when it relates to major programmes (recall the Eurofighter programme in its early days). What distinguishes FCAS from other cases, however, is the initial scale of ambition combined with the depth of the unresolved political and industrial tensions. Indeed, industrial rivalry has proven corrosive. The distribution of workshare between Dassault and Airbus has been a recurring flashpoint. France has insisted that leadership of the FCAS rest firmly with Dassault, reflecting its experience with the Rafale programme and its doctrinal emphasis on nuclear deterrence and expeditionary/naval autonomy. Germany, conversely, has sought parity through Airbus, framing the issue in terms of balanced industrial returns and technological sovereignty. The result has often been ugly, public and protracted disputes over intellectual property rights and design authority.

These disputes reflect a deeper issue, though. Many large European defence firms remain national champions embedded in domestic political economies. Governments rely on them for employment, technological spillovers and national strategic autonomy. As such, industrial negotiations are seldom purely commercial, and there is rarely any political altruism involved. And we should here reflect on the shifting nature of the French and German defence markets. France maintains an ambition to remain one of Europe’s – if not the – preeminent military powers, but its fiscal situation hampers its defence investment ambitions. Germany is emerging as Europe’s main defence industrial player, and its unprecedented financial expansion means it is in a position to extend its defence industrial power in Europe. The growth of Germany as a military actor has been celebrated by many Europeans, but there are inherent risks in this rise.

Political incoherence has undermined strategic clarity, too. France and Germany still largely differ in their defence cultures, and Russia’s war on Ukraine has altered how these countries view the worth of certain military capabilities. France maintains a tradition of national strategic independence, underpinned by its nuclear force and willingness and ability to deploy globally. Germany, shaped by historical restraint and coalition politics, has often been more cautious in military engagement, although it is undergoing a prolonged Zeitenwende or process of strategic change. These divergences complicate joint projects requiring long-term alignment on operational requirements and export strategies.

Certainly, the geopolitical context has exacerbated tensions, and the geopolitical context present at the initiation of the FCAS project is different today. Russia’s invasion of Ukraine in 2022 reshaped European defence priorities. Immediate needs such as ammunition production, air defence systems and readiness crowded out longer-term capability development. Simultaneously, Germany’s Zeitenwende led to the procurement of American platforms such as the F-35 fighter. What is more, Chancellor Merz’s questioning of the relevance of FCAS was combined with press announcements – that have been apparently falsified by the German government – that Berlin would seek to procure further F-35 fighters. From Paris’ perspective, this appeared to undercut the spirit of European solidarity underpinning FCAS. From Berlin’s perspective, it may reflect urgent capability gaps.

The war in Ukraine continues to animate discussions about what type of military capabilities are required of European armed forces in future. Inescapably, the ethos underlying FCAS and other projects, such as the F-35 fighter, is that single platforms and systems can be created to deal with most military contingencies or needs. This is the “Swiss Army Knife” approach to capability development, but this logic is being questioned with renewed vigour, given the battlefield experiences in Ukraine, where multiple aircraft will be needed to meet the long-term challenge posed by Russia. We have already seen, for example, the former head of Airbus, Tom Enders, question whether a single manned aircraft is the answer to future combat anymore.

Clearly, governance structures in FCAS have proven insufficiently robust. Although FCAS has been politically endorsed at the highest levels, and is routinely the object of discussions between the French President and German Chancellor, coordination mechanisms have struggled to reconcile national ministries, procurement agencies and industrial actors. FCAS remains intergovernmental at heart. This limits the ability of any third-party institution, such as the EU, to arbitrate disputes between national champions and governments or impose any form of discipline. FCAS has faltered not because European cooperation is inherently doomed, but because industrial rivalry, political divergence and weak governance have plagued a programme of exceptional technological complexity.

What lessons can be learned?

Today, FCAS is still just about alive, as no official death certificate has been produced. In fact, politicians in France hold out that FCAS may yet still live, although, perhaps cynically, this can be read as a way of not wanting to be seen to sign FCAS’ death certificate. Either way, what is important is to try to learn some of the lessons from the failure of FCAS. It is also important not to see the failure of FCAS as the end of European defence industrial cooperation more broadly, although its failure naturally raises concerns about how Europe’s leading defence industrial players can collaborate in an effective manner. Indeed, with the EU’s new European Defence Industrial Programme (EDIP), the Union is about to embark on the long-term financing of European Defence Projects of Common Interest (EDPCIs). EDPCIs reflect a growing recognition that Europe needs common defence projects if the Union is to survive in an era of systemic rivalry and protracted war on the continent. Such common projects are a way to move beyond incremental coordination towards structured and scalable capability development. In this sense, EDPCIs seek to align joint development, production and procurement under a clearer governance logic that connects demand with industrial output.

Whereas instruments such as the EDF and PESCO have nudged cooperation forward, EDPCIs aim to scale it up by pooling demand, reducing duplication and reinforcing the EDTIB through more predictable investment cycles. Flagship projects for drones, air defence and space speak directly to Europe’s capability shortfalls, which have been further exposed by Russia’s war against Ukraine and transatlantic strains. However, just like the FCAS experience, these common projects must contend with structural obstacles such as uneven national planning horizons, the question of technology transfers and project management. Expanding EDPCIs into enabling domains such as cyber defence, combat cloud architectures, military mobility or command and control could strengthen Europe’s operational coherence. Ultimately, the credibility of EDPCIs will rest on their ability to deliver deployable capabilities, sustained industrial innovation and more political autonomy. However, the case of FCAS invites EU policymakers to consider how to make EDPCIs work in practice.

First, political alignment must precede any industrial framework in the design of future EDPCIs. Too often, European projects are announced with great public fanfare before underlying threat perceptions and operational requirements are harmonised. Future initiatives should begin with rigorous convergence on doctrine and capability needs. This requires sustained political dialogue. Only when member states agree on what a system is for – and under what conditions it will be deployed in the decades ahead – can industry design programmes coherently. In other words, strategy must drive industry, not vice versa. The risk with EDPCIs is that member states view them only as additional sources of financing for defence, but, as FCAS shows, managing political and industrial expectations from the beginning is crucial. In this way, it becomes even more difficult for member states to pull out of projects on the justification that each partners’ military needs are incompatible.

Second, coherent and robust governance structures are required to ensure a healthy balance between political bodies and industrial actors. FCAS has shown that industrial players and governments were not always on the same page, and this can breed mistrust and suspicion. Intergovernmental cooperation without credible arbitration mechanisms can hamper ambitious political projects, because any disagreement is forced to the highest political levels. Involving Presidents and Chancellors in such disputes can cause more damage, not least because every decision they ultimately take is dictated by momentary political interests and needs. With EDPCIs, however, EU institutions such as the European Commission would help structure and coordinate defence projects. Anchoring such projects in the EU and its wider legislative framework may be seen as a sluggish and overly bureaucratic approach, but the reality is that such communitarian institutions can, in theory, help deflate political tensions and ensure that industrial actors remain focused on their tasks. “In theory”, of course, because the EU is yet to prove itself in this regard. Yet anchoring common defence projects in the EU has political and bureaucratic upsides, including a reduction of harmful zero-sum bargaining and providing continuity beyond electoral cycles and changes of government. Indeed, defence industrial programmes must be insulated from short-term political shifts and electoral profiteering. Defence capabilities unfold over decades, yet European politics operates on electoral cycles. Multi-annual financial commitments, binding intergovernmental agreements via the EU, can provide stability.

Third, unlike FCAS, any EDPCIs should focus on projects that will help Europe develop technology domains that are not already mastered by individual industrial actors. As we have seen, Dassault is already in a position of technological mastery in the aeronautics domain, so any question of technology transfers between partners was always going to be difficult. In this respect, creating a workshare framework based on pre-existing industrial competence and technological leadership is very challenging, although not strictly impossible. While not an exact science, the aim of EDPCIs should be to develop defence industrial programmes where Europe faces technological gaps that can be filled by European companies and innovators developing them together. Again, there is no easy method of ensuring this, but building EDPCIs purely on the legacy of technological mastery may give rise to precisely the challenges witnessed in FCAS. A balance will need to be struck between existing technological competencies in Europe’s defence industry and future technology needs.

Fourth, there might be a political temptation to see EDPCIs as monolithic, symbolic projects, but this would be risky, as FCAS has shown. Instead, it will be important for EDPCIs to encourage technological innovation, modularity and incremental development. Rather than launching all-encompassing programmes, the EU and its member states could adopt phased approaches, which would develop interoperable subsystems that can be integrated over time. This reduces risk and allows for more mutual technological development. This is, in some ways, already the logic of the EDF, which finances modular projects and enabling technologies such as artificial intelligence, sensors and propulsion before full system integration. And here, the voluntary legal structures proposed in the EDIP – the Structure for European Armament Programmes (SEAPs) – can help member states jointly manage the full lifecycle of military technology development, as it provides financial incentives and legal stability, even if SEAPs should only be initiated once partners are clear on their military requirements and objectives.

By building up industrial and technological blocs, Europe might avoid the vulnerability that comes with ambitious projects such as FCAS. Of course, it can reasonably be argued that such an approach is hardly in keeping with the political ambition of developing European defence readiness by 2030. Indeed, part of the logic behind EDPCIs is to launch ambitious industrial projects to plug Europe’s capability gaps and show that Europe can deliver on defence. While these are laudable ambitions, especially in the current climate of transatlantic relations and geopolitical tensions, it is perhaps more important to deliver common defence projects that enhance the Union’s military and industrial autonomy over time. If the long-term trajectory is for Europe to take on full responsibility for its defence, then initiating common defence projects that help mature Europe’s defence technological base and lead to technological autonomy is of paramount importance.

In fact, one of the interesting developments to come out of the FCAS affair is a seeming willingness of partners to continue to develop some of the underlying technologies already being developed in FCAS. For example, the partners may seek to salvage the Combat Cloud that is being developed as part of FCAS to develop a sovereign digital backbone for Europe’s armed forces. Maintaining and developing such a technological building block would be of invaluable benefit to the digitalisation of European defence. In fact, one could see such a technology project as the basis of a future EDPCI. This is not to prejudge how EDPCIs should be governed or what direction they should take. In fact, one of the most valuable exercises that could be conducted presently is to study, in forensic detail, why FCAS failed to deliver. On this basis, it would be possible to develop a better understanding of what industrial collaborative formats work best. Again, defence industrial cooperation is not a science, so no one-size-fits-all approach will result in success.

Conclusion

The failure of FCAS undoubtedly carries symbolic weight. It exposes enduring challenges in European defence cooperation and provides fodder for sceptics who question the feasibility of Europe’s strategic autonomy. Yet symbolism should not be conflated with structural determinism. European defence industrial cooperation does not hinge on a single programme. And it should be said that the end of FCAS does not structurally inhibit deeper French-German cooperation, although both sides need to resist letting FCAS lead to uninhibited defence nationalisation, especially at a time of rising defence budgets. As we have seen with President Macron’s 2026 speech on deterrence, Paris, Berlin and others are seeking new levels of cooperation in the nuclear domain, and this will likely spill over into other areas of defence cooperation. Politically, this is not the time to let FCAS dictate the tempo and dynamic of French-German cooperation, as Europe needs these two main actors to pull in the same direction.

If anything, the challenge of FCAS has illuminated the structural challenges that must be addressed by Europeans seeking to deepen defence industrial cooperation: industrial nationalism, political divergence and the weakness of project governance. By internalising these lessons and adhering to principles of strategic convergence, rationalised workshare, harmonised export policy and robust governance, the EU and its member states can strengthen future common defence projects. Provided that the right principles are embraced, the derailment of one European flagship programme need not derail broader efforts to develop common defence projects. On the contrary, it may yet lay the groundwork for a more coherent, resilient and strategically credible European defence industrial base.

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