Commission to mobilise €40 billion to beef up defence cooperation

The European Commission proposed today (7 June) mobilising €39 billion by 2027 to support the joint development of military capabilities and suggested a NATO-type solidarity clause to respond to cyber attacks.

“Member states have realised that the current state of play is unsustainable”, Commission Vice-President for Jobs, Growth and Investment Jyrki Katainen told a small group of reporters on the eve of the presentation.

As old and new threats keep mounting, and military equipment becomes a more expensive burden on constrained national budgets, he warned that Europe is “chronically lagging behind” on defence.

Even if EU members spent 2% of GDP in this field, a commitment NATO partners try to stick to, “it is not enough unless we do something differently”, Katainen insisted.

As a starting point, the Commission proposed today a European Defence Fund aiming at avoiding duplications in military spending by pooling resources.

The EU executive notes that 80% of procurement and more than 90% of research are run within national boundaries. If resources were pooled, almost one-third of national defence expenditures could be saved.

These duplications and lack of standards hinder the EU’s capability to deploy troops. The US spends twice as much as the EU on its military but it is capable of putting 200,000 soldiers on the ground, while the EU can only muster 40,000 men, according to Katainen.

In order to avoid further divergences and duplications, the Commission will use EU funds to boost member state cooperation on research and the development of new prototypes.

The institution proposed today €500 million in research for 2019 and 2020, when the current multiannual financial framework, the EU’s long-term budget, ends.

For the next MFF (2021-2027), Katainen said the Commission will allocate €500 million per year for research in defence, and an additional €1 billion annually in co-finance to help member states turn potential new innovations into prototypes.

Together with national contributions, the executive expects to mobilise €5.5 billion per year after 2020.

National governments will identify jointly with the European Defence Agency what military capabilities should be prioritised.

The Commission already announced last November that it would dedicate €90 million this year for research on defence.

In total, more than €39 billion will be mobilised over the next decade, which the executive expects will serve as a “catalyst” to “consolidate” the European defence industry.

Ultimately, the EU aspires to take its defence into its own hands, after decades of relying on US protection through NATO.

Katainen said that the proposal was not a reaction to US President Donald Trump’s criticism about Europe’s low spending on defence, or the weakening of transatlantic ties under his administration.

But Trump’s comments made “the case stronger”, the Finnish Commissioner admitted.

Constrained budget

In light of past lessons, the Commission ruled out far-reaching proposals such a European army that could represent a jump forward in EU integration. That could have been the case in the aborted European Defence Community in 1952.

But progress under this incremental approach is far from certain. Member states and the European Parliament would have to approve the increased budget for defence and security in times of a “very constrained” MFF after 2020, Katainen.

A smaller EU budget after the UK’s exit from the EU would have to cope with more priorities.

Katainen argued that it is precisely in the defence cooperation where the EU can prove its added value.

However, political willingness not money is the missing ingredient to achieve real cooperation, Katainen warned.

The Commission also presented a reflection paper that hopes to kick off the process of articulating a political vision on three possible scenarios for the development of nascent cooperation on defence.

The conservative option would be to maintain the existing enhanced cooperation, including the new defence fund.

An intermediary scenario would bring more shared responsibilities in the field of security and defence.

Collective response to cyber attacks

The most ambition option would lead to a space of “solidarity” among the member states, including a mutual assistance clause to respond to external attacks, sharing the cost of expensive military assets, and the EU’s “high-end security and defence operations” with a greater level of integration of national defence forces.

Against this backdrop, Katainen said that an automatic collective defence clause similar to NATO’s Article 5 could be possible without embarking on arduous treaty changes.

“It is doable? Yes” he insisted.

He commented that he didn’t know any reason for not having well-trained force for collectively responding to cyber or hybrid threats.

He clarified that the Commission is not pushing for anything that undermines NATO’s role

But asked if he envisaged a collective counter-attack if one member state was a victim of a cyber attack he said that “everything is possible”.

“It would depend on the member states’ political will”, he said. “Now we need to know what is the level of ambition” in the capitals.