The EU and Britain could afford a very effective defense force given the collective size of the member state economies. The problem is getting them to surrender national sovereignty as it pertains to defense force planning and procurement. The political and military elites of all member States each want control their own separate and independent armed forces, equipped along lines they choose and trained for missions they regard as a priority. All of them equipped with their chosen weapon and support systems and each with its own independent military ethos and training priorities. Yes there are some big ticket items like the Eurofighter where several nations have come together (because the cold hard reality of paying for them as individual states has hit them in the face) but apart from that its just way to hard to overcome the politics and bureaucratic inertia preventing any such system. (Imagine what the US defense forces would look like if all the state governments in the US had to collectively agree on the size and structure of defense spending every year).
So in a perfect world Europe could afford a centralized defense acquisition system that selected and purchased everything from uniforms to major strategic weapons systems based on the budget allocation it received from its member states together with centralized military planning agency run by senior officers of the major states. Here in the real world - good luck getting something like that up and running in the next few decades.