Ireland is missing out on the economic benefits of Europe's rapid expansion in defence spending because the country lacks a significant domestic defence industry, Minister of State for European Affairs and Defence Thomas Byrne has admitted.

Speaking in Strasbourg, Byrne confirmed that the government is working to amend legislation and establish a national security clearance system. The measure is intended to enable Irish technology and commercial firms to apply for and secure European defence contracts, ensuring a portion of military spending yields economic returns for the State.

The minister's comments follow briefings presented to government bodies earlier this year that warned Ireland could indirectly contribute billions toward increased European defence initiatives via EU budget contributions while receiving minimal industrial dividend. One briefing estimated Ireland's contribution could reach €7.3 billion over the 2028–2034 Multiannual Financial Framework period.

Asked about the figure, Byrne declined to endorse the €7.3 billion projection, cautioning that such estimates can be speculative. However, he acknowledged the underlying structural challenge, noting that while Irish companies routinely benefit when EU member states increase spending on civil infrastructure, the same advantage does not exist for defence due to Ireland's limited industrial base in the sector.

Byrne also addressed broader debate regarding defence policy, reiterating that European partners exert "literally zero pressure" on Ireland's military neutrality and that the State's non-aligned status remains respected across the European Union.