When it comes to achieving defence readiness, there is no silver bullet for the EU and its member states. Rather, it will be a combination of overcoming indecisions and disagreements, sticking to well-defined strategic goals and acting over time in a concerted manner, including with NATO. Yet, what’s most urgent now, and has the potential to be a real game-changer, is to provide the necessary funding to implement EU ambitions and initiatives.
In March 2024, the European Commission and the High Representative of the European Union for Foreign Affairs and Security Policy presented the first-ever European defence industrial strategy. The document outlines EU’s long-term vision to achieve defence readiness and develop the European defence industrial base.
Russia’s unprovoked aggression on Ukraine in February 2022 has been an impetus to advance the EU’s role in defence, and the EU has come a long way as a security and defence actor in the last two years. Yet, with the return of war on Europe’s continent, conflict in the Middle East, and a potential return of Donald Trump to the White House, Europeans would be well advised not to fall into the “progress illusion” trap. Current headways are insufficient to address today’s and tomorrow’s security challenges.
European security and defence, stuck with member states
In line with the EU’s Strategic Compass from 2022, defence readiness is defined by the European Defence Industrial Strategy (EDIS) as “the ability to act more quickly and decisively when facing crises, secure our citizens against rapidly evolving threats, invest in the needed capabilities and technologies and partner with others to achieve common goals”.
EDIS proposes a long-term strategy to achieve these goals and develop the EU as a defence actor, building on existing initiatives and instruments. The strategy is also underpinned by a new European Defence Industry Programme (EDIP), proposing concrete implementing measures.
Like before, it is not ambitions that are lacking for European defence. However, whether the member states are ready to support and implement this vision, including with immediate significant funding, remains to be seen.
Unsurprisingly, the March 2024 European Council largely dodged the question by tasking the “Council, the High Representative and the Commission to swiftly advance work on the Joint Communication on a European Defence Industrial Strategy”.
EU leaders also underlined the importance of implementing the Strategic Compass as a key element in increasing Europe’s defence readiness. As highlighted by the External Action Service’s second implementation report, there is progress across multiple areas such as crisis management capacity, military mobility, maritime security and space.
The real test, however, is whether major announcements, in this case the EU’s Rapid Deployment Capacity due to be ready by 2025, will effectively see the light of the day as an operational instrument that EU member states can agree to use.
Overcoming pitfalls
EU member states have different visions of the EU’s role as a security and defence actor, owing to differences in strategic culture and threat perception. Some member states (especially on the Eastern flank) perceive the Russian threat as most urgent to tackle, while for others, in the West specifically, there is less urgency at the political decision-making level. Furthermore, some member states are more reluctant to discuss expanding the EU’s role in defence fearing that it might undermine NATO. There are also important differences regarding the level of European military ambition due to different operational cultures, such as between France and Germany for instance.
These are hardly new issues, yet unless member states are ready to step out of their old trenches, the EU’s future role will remain limited to the lowest common denominator. In this regard Estonia and France’s recent rapprochement, jointly pushing for EU defence ambitions is a first step in bridging past divides.
Secondly, there is the dilemma of striking the right balance between short-term needs and long-term goals. In the short-term, the main priority at the EU level must be to replenish ammunition stocks, increase production capacity and acquire urgently needed military equipment to send to Ukraine. In the long-term, the aim is to develop the European defence industrial base and to procure a significant part of the capabilities needed jointly within the EU.
Synchronising the two is a difficult exercise. The EU must not confuse long-term goals with short-term needs that require urgent acquisitions of ammunition and equipment from wherever they are available, be it in the EU or third-country partners. At the same time, Europe will never become a capable actor in its own defence without a solid defence industrial base, which requires that a bigger share of orders be passed to European industry. Today, acquisitions from outside the EU account for 78% of EU countries' 2022-2023 commitments, with the US alone representing 63%.
Thirdly, significant funding committed both at the national and the EU level is required. The current level of funding at the EU level is well below what is needed. The next EU Multiannual Financial Framework (MFF) 2027-2034 will require a significant envelope for defence to support the implementation of EDIS and other objectives set out in the Strategic Compass. However, due to competing priorities, negotiations to agree on a substantial figure for defence will be an uphill battle.
The decision taken at the March European Council to push for an expanded EIB role in financing defence-related activities and the subsequent decision of its board of directors to waive restrictions on dual-use investments is a welcome step forward. It will benefit European defence innovation ecosystems and smaller companies, but it is also little more than a fig leaf and no proper substitute for common spending at scale on defence programmes.
The way forward: EU defence bonds next
With the European Parliament elections looming, security and defence ambitions are now prominent in Europe’s political debates. The next EU Strategic Agenda (2024-2029), set to be approved by the European Council in the summer, will likely put a premium on defence, and the next European Commission will designate it as a core priority.
Commission President von der Leyen’s suggestion to nominate a defence commissioner in the next mandate reflects the growing role and ambition of the EU and the European Commission in defence matters. It is a welcome development. However, to be more than a political campaign trick – much like former President Juncker’s announcement of a ‘European Army’ ten years ago – a clear definition of this portfolio and a debate regarding the structural changes it will require in practice are needed.
As a first step, given the criticality of more financing to meet short- and long-term needs, EU leaders must break the defence bond taboo at the next European Council in June. This requires winning over Germany and other frugal states to plans pushed by Estonia and France.
Wars were never won by scrimping and saving on essentials. In today’s world, EUropean defence ambitions, in full complementarity with NATO, are no longer just an option, but a dire necessity.
Mihai Sebastian Chihaia is a Policy Analyst in the Europe in the World Programme.
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