Europe has the money, the tech, the manufacturing capacity and the know-how. There is a reason Europe conquered the world in just a few years; the lady is way too good at war. One of the reasons post WOII we were quite satisfied with the idea of paying the USA with all kinds of privileges and support to their defense industry and have our own defenses knee-capped. War is horrible, we know that all too well.
Reluctantly but surely the wheel has turned now. There are still gaps for intel gathering capabilities (think AWACS), but Saab is already working on alternatives. Also, Europe has to confront its inheritance of fragmentation (in which the USA has played a big role). Just look at all the various types of fighter jets being developed independently across Europe. That is very wasteful.
Also, European armies have to incorporate the lessons from Ukraine. The Germans make the world's best tanks, but the advent of drones on the battlefield has shaken up all old mil. doctrines.
Aside 1: there are quite some areas where European weapon systems are state of the art, but you won't hear about that unless you are more in the know. The US is hurting itself here in a big way. Going alone = $$$$$$$$$$$$
Aside 2: The European Union has been conceived as an 'ever closer union' from the beginning as to lower the likelihood of new wars on the continent; something the USA pushed us to btw post-WOII. Canada and Australia have raw materials, something which Europe doesn't have abundantly. Sharing development costs across the free world is mainly why you see Canada, Japan, Australia etc having a heightened interest in Europe. There is world-wide a lot of interest in the European defense sector, but South Korea and Israel have also interesting defense sectors.