The chief executives of Airbus, Leonardo and Thales have been lobbying Brussels to approve a merger that would create a pan-European space company capable of taking on SpaceX. Their argument is straightforward: scale matters, and Europe's fragmented industry cannot compete without it. Lorenzo Mariani of Leonardo put it plainly: "Without co-operation, European industries will never reach the critical mass and the capability to really be worldwide champions."

He has a point about industrial heft. But the merger push, and the broader European conversation about space sovereignty, is circling the wrong problem. Europe's deficit is not primarily about the size of its satellite manufacturers. It is about whether the continent can see what is happening in orbit without relying on American data and American technology.

The awareness gap in numbers

Europe accounts for 27.7% of the global space situational awareness market, according to industry figures cited in recent analysis. The United States holds 42.4%. Space situational awareness, or SSA, is the business of detecting, tracking and characterising objects in orbit: operational satellites, debris, and spacecraft whose purpose is unclear. It is the difference between knowing something is up there and knowing what it is doing.

That gap matters more than it did even five years ago. Low-Earth orbit is filling with commercial constellations, military assets and fragments of earlier missions. The ability to monitor that environment, to attribute hostile behaviour and to avoid collisions, is now a prerequisite for any claim to strategic autonomy.

Why mergers will not close it

The three companies pressing for consolidation are large systems integrators. They build satellites, launch vehicles and complex military platforms. The firms actually developing the optical sensors and data-processing tools that underpin modern SSA are, for the most part, smaller and highly specialised. A merger of Airbus, Leonardo and Thales would create a bigger company. It would not automatically create a better one at reading orbital behaviour.

Europe has made genuine investments in sovereign space infrastructure. The EU Space Surveillance and Tracking partnership, known as EU SST, coordinates monitoring across member states. IRIS², the Union's planned multi-orbit constellation for secure communications, has secured backing including a roughly €640 million commitment from Poland. Germany has separately proposed a national low-Earth-orbit military satellite constellation, which could function as either a rival or a parallel system to IRIS².

These are commitments to hardware in orbit. They are not, by themselves, commitments to the sensor networks and analytical capacity needed to protect that hardware.

China's orbital manoeuvres

The strategic context is sharpening. China has developed satellites capable of approaching, inspecting and potentially interfering with other spacecraft. The US Space Force has described these capabilities as "dogfighting in space." Whether that language is precise or alarmist, the underlying capability is real: Chinese satellites can manoeuvre close to other objects in orbit, and doing so gives them the option to gather intelligence, disrupt operations or cause damage.

For Europe, the immediate question is whether it could detect such an approach independently. If a Chinese or Russian satellite were shadowing an IRIS² craft, would European operators know without being told by Washington? At present, the honest answer is: probably not.

Radar tracks position. Optical identifies intent.

Radar remains essential for tracking the position and velocity of objects in low-Earth orbit. But radar tells you where something is, not what it is doing. Optical sensors, mounted on the ground and increasingly on satellites themselves, allow operators to identify a spacecraft, observe its orientation and detect unusual behaviour: a solar panel repositioned, a thruster firing at an unexpected time, a satellite that has moved closer to another without explanation.

As satellites become more manoeuvrable through advances in propulsion and autonomous navigation, and as the line between civilian and military missions blurs, understanding intent matters as much as tracking position. The intelligence that allows operators to distinguish routine activity from hostile preparation underpins collision avoidance, military decision-making and diplomatic response.

The small-firm problem

This is where Europe's industrial structure works against it. The companies building the optical payloads and AI-driven data-fusion tools that modern SSA requires are not the big primes seeking a merger. They are smaller, often start-up-stage firms with deep technical expertise but limited access to the defence procurement chains dominated by the very companies now pressing for consolidation.

Europe has spent decades relying on a handful of large contractors for defence technology. If it continues that pattern in space, it will build bigger companies without building the specialist supplier base that actually delivers the sensors and analytical capacity sovereignty requires. The two need to coexist: large integrators to assemble complex systems, and smaller firms to push the underlying technology forward.

What sovereign SSA would actually require

Closing the awareness gap demands several things that current European policy does not yet prioritise. A denser network of ground-based optical and radar sensors across the continent. More sovereign optical payloads carried on European satellites. Better data fusion, combining inputs from multiple sensors and allied networks. And artificial intelligence capable of processing the growing volume of orbital data fast enough to be operationally useful.

Common standards and interoperability across European nations and with NATO would reduce duplication. Sustained investment, not one-off programmes, would give smaller firms the predictability they need to develop and scale their technology. And SSA would need to be treated as critical infrastructure, not a niche capability.

People mentioned

Organisations

Airbus · Leonardo · Thales · SpaceX · European Space Surveillance and Tracking Partnership