The Brief – Borrell gets his hearing for the defence

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When the EU’s chief diplomat, Josep Borrell, concluded the bloc’s first defence policy review, more than 18 months ago, he warned that “European defence suffers from fragmentation, duplication and insufficient operational engagement.”

Unfortunately, not many were listening.

On Thursday, as he and Internal Market Commissioner Thierry Breton set out their plan to reform defence procurement and identify the gaps in European defence investment, it was clear that little has moved on.

“We have a problem of deep fragmentation and inefficiency in Europe,” said Borrell.

The proof is in the numbers. Borrell and Breton said that over the last 20 years, the European Union has increased its military spending by 20%. During the same period, Russia has increased its spending by about 300% and China by almost 600%.

Prior to the Russian invasion of Ukraine, there was a sense in many capitals that defence spending was a waste, and a well-funded and equipped armed forces an expensive luxury. That explains, in part, why so many European states, most notably Germany, made no attempt to meet their NATO commitment of spending 2% of GDP on defence.

The NATO applications made by Sweden and Finland are not the only consequences of Russia’s invasion.

Since 21 February, 11 EU governments have announced plans to raise defence spending to at least the 2% target, working out at around €200 billion in extra spending. Germany has announced a €100 billion fund dedicated to defence acquisitions.

This is not spending for spending’s sake. Many EU members have provided Kyiv with military equipment that they will need to replace in the coming months and years. The war has allowed a number of central and east European states to finally offload some of their ancient Soviet-era aircraft and other equipment, and make space for more modern weaponry.

And while they’re about to start spending, it does not make sense for EU governments to go it alone. Joint defence procurement projects account for 11% of spending. The Commission says that it should be around 35%.

“Everywhere, we have fragmentation and duplication,” said Borrell. “The US has only one type of battle tank, we have 12.”

The Commission wants to set up a fund to offer financial incentives for European governments to work together on joint defence procurement, although the €500 million proposed by the EU executive this week is far short of what will be needed.

This is more practical than altruistic. The defence sector is a multi-billion euro industry and more spending inevitably means more lucrative contracts for defence firms.

However, around 60% of Europe’s military kit is currently bought from outside the EU and Commissioner Breton wants to establish a ‘buy European’ principle. Germany, Sweden and, in particular France, have the most advanced defence industries and would be the obvious beneficiaries.

Two years ago it was easy to discern the frustration of Borrell and others at the deafening silence that followed any attempt to push on EU defence procurement. It may have taken a war on the EU’s doorstep to persuade governments that they cannot rely only on NATO and the United States but that era of complacency is over.


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Look out for…

  • Commission Vice-President Margaritis Schinas delivers opening speech at the Greek House Davos of World Economic Forum in Davos on Sunday
  • World Health Assembly starts on Sunday
  • Commission Vice-President Margrethe Vestager meets with Austrian Finance Minister Magnus Brunner on Monday
  • World Economic Forum Annual Meeting starts on Monday
  • General Affairs Council meeting on Monday
  • Eurogroup ministers meet on Monday

Views are the author’s.

[Edited by Alice Taylor/Zoran Radosavljevic]

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