Collective defence investment: Europe must do more and at a faster pace

If Europeans really intend to build a common defence industry that will allow them to face the new challenges ahead and become a credible player in the international security arena, they must do and spend more together, and they must do it now, a group of ten defence experts write.

Signatories to the letter include Alessandro Marrone, head of the defence programme at Israel Aerospace Industries (IAI) and Fédérico Santopinto, a senior research fellow at the French Institute for International and Strategic Affairs (IRIS). The full list can be found at the bottom of this letter.

Since the start of the war in Ukraine, most EU countries have announced the intention to increase their military spending. Such increases are estimated at around €200 billion for the next few years.

The rise in national defence budgets by European countries represents both an opportunity and a challenge for the EU.

As we pointed out in an article published last April, member states must avoid rushing into hasty, purely national, decisions and they should not exclusively focus on short-term responses. Of course, the latter is important in order to replenish ammunition stocks and fulfil urgent needs arising from the war in Ukraine.

However, EU countries must also adopt a long-term perspective that can help build up an effective defence within a competitive European Defence and Technological Industrial Base (EDTIB).

To this end, they have to deepen the cooperation and coordination among themselves, as well as with their NATO partners, and the EU must help them do so by strengthening its incentive policies. Otherwise, the new resources available to member states risk further aggravating the fragmentation of the EDTIB.

Faced with this challenge, in May 2022 the European Commission and the European Defence Agency (EDA) jointly proposed to create new financial tools to encourage EU member countries to make joint arms acquisitions.

The first of these tools, the European Defence Industry Reinforcement through common Procurement Act (EDIRPA), is intended for the short term with a budget of €500 million for two years (2023-2024). Its adoption is expected by the end of 2022.

EDIRPA will set the groundwork for a follow-on tool called the European Defence Investment Programme (EDIP), which focuses on the long term with a larger budget. The EDIP is expected to be adopted in 2023 for use from 2024.

There is no doubt that these initiatives are a step in the right direction. However, the fears mentioned in our previous article have partly become a reality. Too often, European states have reviewed their equipment policy almost exclusively in a national framework, with a short-term view to the detriment of a longer-term vision. They have also arguably over-favoured off-the-shelf acquisitions or national development and production.

As a result, and as far as the short-term is concerned, the €500 million provided for by EDIRPA are a meagre incentive compared with the €200 billion that the EU member states are preparing to spend in the coming years to re-equip their armed forces. Such a meagre incentive will be operational ten months after the outbreak of hostilities in Ukraine.

The EU must do more and faster in order to prevent such measures from becoming irrelevant. Despite this, the EDIRPA sets up a mechanism which is the first of its kind: there is no other financial incentive in Europe that can push member states to promote joint acquisitions.

Furthermore, for the medium- and long-term it is also necessary to avoid short-term off-the-shelf acquisitions that dry up necessary funds to develop future programmes. This would only increase European dependency on non-European equipment. Strengthening the EU’s military capabilities: yes; weakening the EDTIB and increasing our dependences: no.

Faced with such a situation, the EU must at least guarantee a substantial financial allocation to the EDIP and increase the European Defence Fund (EDF), which is another key initiative launched in 2017 to support collaborative defence research and development projects.

The mid-term review of the EU Multiannual Financial Framework (MFF) in 2023 offers this possibility. This is all in the hands of member states, however, and the last word on the budgets of the EDIRPA and the EDIP belongs to them.

They must urgently agree on this file, and for that, it would be desirable for the Franco-German engine to resume working. Finally, European countries must also take advantage of these initiatives to immediately launch a joint EU defence programming and procurement process that credibly connects to national capability planning and meets national, EU and NATO military requirements.

In a few words, if Europeans really intend to build a common defence industry that will allow them to face the new challenges ahead, if they want to become a credible player in the international security arena, they must do and spend more together. And they must do it now.

 

A column written by group of scientific advisers to the Armament Industry European Research Group (ARES) and published by Euractiv.