Although European governments have agreed to ad-hoc joint defence procurement programmes and EU-level initiatives to source material from the armaments industry, the European defence market remains characterised by a curious mix of inter-state competition and European cooperation. Why do European countries sometimes engage in European defence cooperation, sometimes in ad hoc inter-state military programmes, and in other instances in the form of EU-level policies? I focus on state-level variation between public versus private governance of industrial suppliers. Whether EU countries are characterised by a public or private governance system results from the interplay of the degree of industry's government protection, the degree of interpenetration between public and private sectors, and the degree of autonomy of the procurement agency from the industry's influence. Countries with public governance of defence firms are likely to take part in EU-level projects inter-state collaboration bringing narrow benefits for their own industries, while private governance systems are more likely to participate in inter-state collaboration in which they can realize larger macro-economic and military benefits. I will combine an innovative mixed-method approach with network analysis and comparative case-study research design, to explain British, French, German and Italian preferences towards European defence cooperation.