There are some systems like fighters in Europe, that are made by multiple small manufacturers. As a result the build quantities are low and costs high. Old systems are never renewed. They don't do well in export competitions. Some manufacturers are geographically located in one country like Dassault. SAAB is very much in Sweden with some US components.
One solution to this would be to just make each project a large international megaproject, have most of the manufacturers in Europe coordinate. But this kills competition and makes projects complicated. There is a another method too.
Instead, share basic research and build prototypes and share the lessons from those. Have manufacturers form multiple co-operating international alliances to compete for each program. Sustain multiple programs, even if it means some duplicity. Competition and independent capabilities are more important.