EU-Budget Constraints and the Broken Dream of European Defence Integration
30 June, 2020
The Covid-19 pandemic has caught everyone’s attention on governments’ and EU institutions’ efforts to contain the spread of the virus and promote economic recovery. But remember that not so old dream (or nightmare?) of a more sovereign Europe on defence matters? As coronavirus brings us into a more unstable and uncertain world, talking about European defence has become trendy again. So, let’s have a look at where we stand and, most importantly, at where we are heading to.
European Foreign and Security Policy: Major Developments
In recent years, a new level of ambition in EU security and defence cooperation resulted in a call to arms for Brussels to be more active in defence issues. On one side, the need for a more integrated and competitive European defence industry was brought forward. On the other side, efforts focused on finding effective ways to strengthen the EU’s strategic autonomy in order to be prepared for new internal and external security threats. Such needs led to a series of elaborate policy initiatives beginning with the publication of the EU Global Strategy by former EU High Representative Federica Mogherini in June 2016. Later that year, two more documents containing tangible actions were published: the Implementation Plan on Security and Defence and the European Defence Action Plan. Further developments followed in 2017 and were designed to prepare the ground for an ambitious European Defence Fund under the EU’s 2021-2027 budget. In particular, the fund should boost member states’ cross-border cooperation and coordination, as well as the defence industry, small- and medium-sized enterprises, and research centres. It should also include a research window providing funding for collaborative defence research projects and a capability development window of defence technologies and products, which will be co-financed by the EU budget. Moreover, the EU promoted further initiatives in line with its global strategy objectives, such as the set-up of the Coordinated Annual Review on Defence (CARD) and the adoption by the Council of the EU of forty-seven projects under revived Permanent Structured Cooperation (PESCO). Finally, the creation of a Directorate General for Defence Industry and Space (DG DEFIS) in the newly born European Commission is a sign of its willingness to increase its agenda-setting power in security and defence matters.
Challenges to European Defence Integration
Despite the lay down of such ambitious commitments from 2016 onwards, the EU currently faces a number of obstacles that risk to nullify earlier progress on the defence portfolio, namely the most recent coronavirus pandemic, and the consequent cuts to European defence funding. Indeed, under the recent European Commission’s budget proposal, two major defence programmes would receive less funding than they were given two years ago. The first one is the very much awaited European Defence Fund, which would be allocated €8 billion, instead of €11.5 billion foreseen in 2018. The second one is military mobility, namely efforts to facilitate the movement of troops and equipment around Europe, which is also a NATO priority. In its most recent plan, the Commission allocated to it €1.5 billion, rather than the €5.7 billion originally proposed. As the Union is busy tackling the coronavirus crisis, it might risk jeopardising the momentum of defence integration. In fact, the pandemic will most likely delay, if not reverse, recent expansions of national defence budgets, as the EU-27 will concentrate their efforts to mitigate the economic downturn generated by the health crisis. With public budgets under strain, member states will be under pressure to distribute resources elsewhere to respond to the health and fiscal consequences of the pandemic. It will thus become extremely hard to convince EU governments to provide substantial contributions to current and new Common Security and Defence Policy (CSDP) missions, if these operations do not mirror countries’ national interests and priorities.
Furthermore, intentions to cut the Commission’s draft defence budget proposal were already present well before Covid-19 hit the continent. For one thing, the departure of the U.K., to date the third largest contributor to the Multiannual Financial Framework (MFF), triggered a general compulsion to economise, which was reinforced by the efforts of four other member states (Sweden, Denmark, Austria and the Netherlands) to spend no more than 1% of their GDP in EU contributions. In addition, even with a conspicuous budget, it was never clear that the Commission’s ambitions would be met, as there seems to be quite diverging defence priorities among the EU-27. The European Defence Fund, for instance, is considered a major step forward for France, which has always been committed to a greater integration of European defence, and cuts to this project are therefore a source of major disappointment for Paris. However, Central and Eastern European countries are reluctant to integration and possible French dominance in this area, and are also afraid that the defence fund would undermine NATO. Conversely, they welcome supplementary spending in military mobility, as investments in civil and military usable infrastructure would facilitate the quick deployment of military equipment on EU’s territory and hence reinforce NATO’s eastern flank, which some member states perceive to be under increased Russian threat, especially after the annexation of Crimea. Not even the U.S. recent decision to withdraw 9,500 troops from Germany has convinced analysts of a possible acceleration of EU defence integration. In fact, the U.S. decision comes late in Trump’s term. Europe’s first move will thus be to wait until the November 2020 elections hoping that a Joe Biden presidency could restore transatlantic relations. Such a posture is indeed less demanding than grappling with the strategic and budgetary implications of a French-style European defence project.
The EU-27 Need Alignment
Before even discussing further European defence integration, the EU-27 need to align their threat perceptions and strategic cultures. Germany’s motivation to create a so-called ‘strategic compass’ process could help. Envisioned as a follow up to the EU Global Strategy, the compass seeks to involve member states in a joint threat analysis in order to reach a consensus on what the EU should be able to do. Similarly, some analysts have suggested that EU governments should first focus on investing in military mobility, a flagship project of EU-NATO cooperation that is hardly contestable. In particular, an incentive in this area could be that the investments done by EU governments into some of the dual-use infrastructure could be counted into NATO’s 2% spending target. These measures could eventually help lay the foundations for greater European defence integration.