POLITICO - After years of talk, EU plans defense spending spree

  • June 8, 2017

The EU on Wednesday unveiled a multibillion-euro Defense Fund, marking the first time that money from the bloc’s budget will be used to buy military equipment and on joint defense capabilities.

It represents a historic push by the EU into a new phase of cooperation on military and security policy, including on procurement of weapons and new technologies. And it comes at a time when U.S. President Donald Trump has raised doubts about his commitment to NATO’s principle of collective defense, prompting European leaders, including German Chancellor Angela Merkel, to warn that the EU can no longer rely on its superpower ally.

While there is still much skepticism about the defense plan — given the EU’s struggles to better integrate the defense programs and capabilities of individual countries — supporters of closer military cooperation praised the fund as a crucial first step.

“The fact the Commission together with member states are ready to move forward, to have real money and real resources is very positive,” said Urmas Paet, a former Estonian foreign minister and now member of the European Parliament. “It is clearly, of course, a concrete signal.”

Paet, an avid proponent of integration who helped draft the Parliament’s plans in favor of stronger European defense, said the plans “sounds like they’re on the right track, but we don’t yet know all the details. As we all know, there is still resistance to increased military spending in Europe.”

The new fund was unveiled by EU foreign policy chief Federica Mogherini and European Commission Vice President Jyrki Katainen as part of a broader effort by Commission President Jean-Claude Juncker to move ahead with a European Defense Action Plan.

Announcing that plan in a speech in September 2016, Juncker said: “If Europe does not take care of its own security, nobody else will do it for us.”

The new fund has two parts, a senior EU official said: A “research window” to finance collaborative development of defense technologies such as electronics, encrypted software or robotics, for which the Commission has already proposed €25 million in the 2017 EU budget; and a “capability window” which would allow EU countries to share the cost of new military hardware, such as drones or helicopters.

Officials said the annual allocation for the first component could grow to €90 million through 2020. After that, the Commission plans to propose a dedicated defense research program of €500 million per year.

When it comes to the capability window, the goal is to leverage about €5 billion per year in coordinated spending.

One senior EU diplomat said the EU’s ambitions would be judged more on its ability to coordinate security and defense policy and less on its ability to reform the eurozone.

“The real test is going to be on defense and not on the euro,” the diplomat said, noting that if a conflict were to develop in, say, the Balkans, the EU should have the capability to intervene without turning to London or Washington to take the lead.

This ability to put EU boots on the ground will depend heavily on decisions over the next few months on financing for existing EU battlegroups, comprised of approximately 1,500 soldiers, which have never been deployed, mainly because of funding disputes.

Until now, defense cooperation in Europe has existed mainly at the bilateral or regional level. According to a study by the European Parliament, there were nearly 400 ongoing military cooperation projects in Europe in early 2015.

Among the existing partnerships is a joint procurement program for ammunition for an anti-tank system used by Estonia, Latvia, Lithuania, the Czech Republic and Poland.

Despite longstanding skepticism, EU diplomats are voicing fresh optimism given increased support from France, Germany, Italy and Spain. Brexit has also added to the sense of momentum, as the U.K. has traditionally resisted any perceived competition for NATO.

In the private sector, the European defense industry also seems to be sensing a shift.

“The big difference compared to the past is that now EU money will be spent on defense,” said Burkard Schmitt, defense and security director at ASD, the AeroSpace and Defence Industries Association of Europe, which represents many big players.

“This could make a difference in particular in the research phase where cooperation starts, but also in the development phase where research results must be taken forward toward real equipment and procurement,” Schmitt said.

Still, he warned that it “can only become a success if member states are fully engaged.”

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