European policymakers should make weapons funding available only to those nations that agree to buy arms together as the region boosts its defence spending, according to the leader of Finnish defence company Patria Oyj.
Doing so would help overcome a key hurdle — the fragmentation of its weapons systems, CEO Esa Rautalinko said in an interview. Putting limitations on its joint financial tools, such as only giving access to countries signing up to multinational procurement processes, or creating other such incentives, would ensure more systems are compatible, he said.
“We need to have speed of execution, naturally, but also interoperability and interchangeability,” said Rautalinko. There are about 25 to 30 different systems for 155mm field guns alone, he said, adding that’s “far too many.”
The start of the second term of Donald Trump as US president has been a wake-up call for Europe to rebuild its defences for real. Trump has demanded that members of the North Atlantic Treaty Organization spend 5% of their gross domestic product on their armed forces, a threshold the US itself falls short of, and he has said the US would not come to the aid of countries that did not meet their defence spending commitments.
With Russia waging a full-scale war in Ukraine for the fourth year, many of its neighbours — including Patria’s home Finland — have called the need to rearm as an existential question.
Rautalinko said the sheer speed of the recent shift in US foreign policy likely surprised many, but noted that Trump has long argued that Europe needs to spend more on defence and his warnings to NATO that it could not rely on the US became a recurring theme during his first administration.
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This month, the European Commission proposed a package of €150 billion in loans to boost defence spending in the region, as well as a mechanism that would allow countries to use their national budgets to spend an additional €650 billion on defence over four years without triggering budgetary penalties.
“It’s pretty hard for the industry to navigate at the moment, because we don’t really have any precise information about what’s going to happen and when,” Rautalinko said. “That’s of course withholding necessary investments to a certain extent.”
When it comes to the number of manufacturers in the defence industry, Rautalinko is not a big believer in consolidation, mainly because the market is still very protectionist. The CEO questioned whether it would help or be a problem if the big producers became even bigger, and what kind of synergies would actually materialize.
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Patria manufactures defence equipment, including 6x6 and 8x8 armoured vehicles, surveillance systems and armaments, with new orders jumping more than 30% year-on-year to about €1.26 billion in 2024, according to preliminary figures. The Finnish state owns just over half of the company, with Norway’s Kongsberg Defence & Aerospace AS holding the remaining shares. Patria, in turn, owns half of Nammo AS, a manufacturer of sought-after 155mm artillery rounds.
Barring any additional political decisions, the CEO expects 2025 growth to continue in more or less the same magnitude as last year, adding that the company is “in a pretty good place” with regards to its production capacity. It also licenses technology to some customer nations for domestic production.
The border Finland has with Russia is about 1,300 kilometres (800 miles) long, and makes up more than half of NATO’s Eastern flank after its 2023 accession into the bloc. Neighbouring Sweden joined a year ago.
Europe shouldn’t let its guard down even if a lasting peace is agreed between Russia and Ukraine, Rautalinko said.
“We have at least a couple of decades of work to be done irrespective of what the situation in Ukraine is,” the CEO said. “The danger is not going to be over.”
