European defence: is it finally out of the starting blocks?


Peace, Security & Defence

Picture of Jamie Shea
Jamie Shea

Senior Fellow for Peace, Security and Defence at Friends of Europe, and former Deputy Assistant Secretary General for Emerging Security Challenges at the North Atlantic Treaty Organization (NATO)

Back at the turn of the century I worked for one of the more colourful secretary generals of NATO, Lord George Robertson. He often liked to say that he had three priorities: “capabilities, capabilities and capabilities”, to which he inevitably added: “you can’t take a wiring diagram into a crisis”. By this he meant that fancy organigrams of how the Brussels institutions would attempt to communicate with each other were all very well, but they were no substitute for the well-equipped and deployable armed forces that alone allowed NATO and the European Union to project power and defend their vital interests in the world’s hotspots.

I was reminded of Lord Robertson’s dictum the other day as I moderated a panel discussion at a seminar organised by the Portuguese Ministry of Defence and the Portuguese Presidency of the EU. It was convened to review the progress of the EU in building up its military capabilities and achieving its goal of having a full spectrum of capabilities: from trainers to high-tech combat units by the middle of the decade. My panel, taking its inspiration from resilience to COVID-19, was titled: ‘Is European defence vaccinated against crises?’ This title, although still a question mark, certainly hinted at progress when we think of Europe’s all too apparent military weaknesses and non-existent crisis management capabilities just a few decades ago. Then wits and detractors may have been tempted to turn the question around and ask: are crises vaccinated against European defence? This time round optimism was in the air that the EU is finally taking its defence responsibilities seriously and bringing its efforts more into line with its ambition.

Over the past few years, we have been bombarded with eloquent strategy papers and planning documents from the EU External Action Service, the European Commission and the European Parliament. An updated EU Global Strategy was produced in 2016, a European Defence Agency established in 2004, and a new Directorate-General in the Commission dealing with defence industry and space was set up in 2019. The EU has launched the Permanent Structured Cooperation (PESCO) to stimulate more multinational capability projects and a European Defence Fund (EDF) to promote cross-border cooperation in innovation and military R&D. An annual review of the quantity, and more importantly the quality, of Europe’s defence forces and their armaments and equipment (CARD) will give a more detailed and realistic overview of where things stand. This is because it is all very well to count battalions, tanks and fighter aircraft on paper but if they are not ready and cannot be deployed, they are not much use. We can also mention a Capability Development Plan and a European Defence Industrial Development Programme without coming close to exhausting the list.

We are seeing a US administration which is reluctant to get involved in new crises

EU officials like to refer to these strategy documents and action and implementation plans as ‘game changers’ in driving Europe’s quest for military relevance forward. Together, the policy initiatives are intended to break through the logjams that have long prevented the EU from having the kind of well-equipped, deployable and sustainable over distance armed forces that its economic and diplomatic heft on the world stage would seem to require. They are too dependent on the United States within the NATO alliance, hampered by inadequate spending and then wasting the money that is available through too many overlapping and small-scale programmes. There is too little consolidation of the fragmented EU defence market and too little investment in innovation and R&D, undermining the EU’s strengths in science and research by not being able to commercialise the results and bring new products to the market.

Finally, the EU has had notorious difficulty in persuading its member states to open their defence procurement to cross-border competition and to agree on common specifications for equipment produced in multinational programmes. NH90 helicopters in over 20 different models or the Boxer infantry vehicle with the Dutch and Germans insisting on different control systems and internal layout are but two of a litany of bad examples.

So, are we now seeing something more serious in terms of building the ‘Defence Union’ alongside the ‘Security Union’, dealing with domestic threats like terrorism, which EU aficionados hope to realise by the decade’s end? A number of factors do indeed suggest a new momentum.

In first place is the transatlantic context. Progress usually happens when there is a mix of risk and opportunity. Pressure to change is not sufficient if countries and institutions do not see a clear way ahead. Yet now we have a Biden administration in Washington that has recommitted to the NATO alliance, but which has also made clear its priority of fixing America’s gaping problems at home. It is dealing with the pandemic, reviving the US economy and overcoming racial and political divisions which is driving Biden’s high popularity ratings and helping his re-election in four years’ time, not investing in Europe’s security. Biden could echo Gladstone when he said that “my foreign policy is good government at home”.

Thus, even Biden’s recent pledge to reduce US carbon emissions by 50% by 2030 was presented as a driver of US jobs and infrastructure investments rather than as a contribution to curbing global climate change. As a result, we are seeing a US administration which is reluctant to get involved in new crises. It is withdrawing all its troops from Afghanistan and left to Egypt the task of negotiating a ceasefire between Israel and Hamas after the recent flare-up in Gaza. Washington has largely left the response to the recent outrage of Belarus hijacking a civilian aircraft to get its hands on a prominent political opponent to the Europeans, as it has the diplomacy vis-à-vis Ukraine, Libya and the Sahel.

This is a big step forward in preparing the EU’s forces for likely future operations

This is not to say that Washington will not respond vigorously when it is attacked directly, as it showed in the financial sanctions imposed on the Kremlin after the Solar Winds cyber-attack and Russian interference in the US election. But Europeans are going to become more used to handling crises in their neighbourhood alone, and they will need their capabilities such as space-based observation, armed and reconnaissance drones, intelligence, special forces, air-to-air refuelling, air transport and logistics supply for which they have traditionally relied on the US. In return, the EU can request more support from Washington for its goal of strategic autonomy, provided that it can demonstrate that it is serious about making the right investments and is interpreting this initiative as a way of taking more responsibility in NATO and the neighbourhood and not setting up a protectionist arrangement that will shut out US industry or transatlantic collaborative programmes. Here the recent EU decision to allow the US, as well as Canada and Norway, to participate in the PESCO project on military mobility sends the right signal.

In second place is money. Surprisingly, given the economic impact of the COVID-19 crisis, European defence budgets have been going up. Non-US defence budgets in NATO have increased by $150bn since the NATO Wales Summit in 2014 adopted the Defence Investment Pledge to allocate 2% of GDP to defence. Last year the overall increase, excluding the US, was 4.2%. Over half the NATO allies now spend at least 20% of their defence budgets on investment and modernisation. EU funding for its own institutional defence programmes has also increased by over €10bn in the latest seven-year financial framework. It is true that the budgets for the European Defence Fund (EDF) and military mobility were cut from €13bn and €6bn to €8bn and €1.5bn respectively. Yet this is still much more than what the EU had before and it is enough to function as seed money to get multinational collaboration moving forward.

Moreover, given the increasing role of civilian research, dual use technologies and space in modern military organisations, the fact that the Commission now has a formal role in defence industry will help to identify synergy between the EDF and the EU’s new Industrial Strategy and space programme. Space has a budget of €13bn and the Horizon fund for civilian research is five times higher than the EDF fund. So, if these various programmes can be made to federate to equip Europe’s armed forces for the new data driven and AI enabled environment, EU defence should have real financial fire power.

The next positive development is the EU Strategic Compass, an exercise in mapping the threat landscape around the EU which should be completed by the French EU presidency in the first half of 2022. The advantage of this process is that it has produced the first EU collective threat assessment rather than the very generic and abstract ‘illustrative scenarios’ of the past which were used to develop an EU catalogue of forces for different types of mission, for instance humanitarian relief to forced entry and peace enforcement. So now PESCO projects and EDF-funded R&D can be assessed and supported according to whether and how they help the EU’s member state armed forces deal with the identified threats. Finally, the EU has linked its capability requirements to its operational planning in a way that NATO has been doing for many years with its defence plans tied directly to its capability targets and minimum military requirements. This is a big step forward in preparing the EU’s forces for likely future operations in concrete regions and against defined adversaries.

As EU defence finally moves forward, four conditions of success will determine the ultimate outcome

We can also welcome the fact that PESCO and the EDF are finally up and running. There are currently 47 projects approved for PESCO and most EU member states have stepped up to lead at least one project and participate in or be observers in 10 or more of the others. Last year there was the first PESCO review to weed out non-functioning projects and launch a new cycle for the 2021-2025 timeframe. At the beginning, many PESCO projects were not new but putting an EU label and granting EU funding to already existing initiatives. For instance, the setting up of already planned training centres or the numerous European short and medium range drone programmes. Yet today the projects are more ambitious and cutting edge and more driven by EU capability goals top down rather than based mainly on what member states have had in the pipeline for years. The EDF has already benefited from a precursor kick-start programme with €90mn, which enabled three initial research projects to be launched.

A further positive development is that the new Directorate-General for Defence Industry and Space (DG DEFIS) in the Commission and the European Defence Agency are building new partnerships with industry and reaching out in particular to the small and medium sized enterprises (SMEs) which are responsible for much of the innovation in the high-tech sector. In the area of cyber security this level is as high as 80%. These new partnerships can help industry to have a longer-term vision of the EU’s future capability requirements and to propose different solutions. For instance, replacing an obsolete reconnaissance aircraft with a more modern version of the same is not always the most cost-effective option if the same requirement for ground observation can be met by a combination of drones, helicopters and satellite sensors.

SMEs in Europe have often not looked to the defence sector for business opportunities and have not had the resources to participate in trials, demonstrations and experimentation exercises. Here, the EU can bring them fully into the game by offering modest seed money and a structured dialogue to identify promising new technologies and then helping SMEs to take them forward and develop market scale. Critical here will be the ability of EU Commissioner Thierry Breton and his new DG DEFIS to work effectively with Jiri Sefivy, the Executive Director of the European Defence Agency, which comes under the umbrella of the EU’s High Representative. Both are now dealing with industry and innovation and they need to avoid duplication and establish a clear division of labour.

Yet, as EU defence finally moves forward, four conditions of success will determine the ultimate outcome.

Europe has to innovate more

First is the NATO-EU relationship in the area of capability development. The two institutions have come a long way in talking to each other and in signing two Joint Declarations to reinforce their cooperation. The principle that capabilities developed by one organisation can be used by the other has been established and some EU initiatives, such as the multirole tanker refuelling aircraft based on an Airbus 320 conversion, are of real value to the alliance. The operation in Libya in 2011 underlined Europe’s dependency on US tankers in this regard. Yet the NATO-EU dialogue on capabilities can go much further. There is much that they can learn from each other. The EU’s focus on civilian and innovative technologies, as well as on space exploitation, can benefit NATO which tends to work more with the traditional large scale defence contractors through its NATO Industrial Advisory Group (NIAG). Now that NATO has declared space as an operational domain, the alliance will have a keen interest in how the EU develops its future satellite constellations and its partnerships with the private sector.

On its side, NATO has a lot to teach the EU about operating major programmes and platforms. For instance, its Alliance Ground Surveillance programme based on US procured Global Hawk drones. Here, a consortium of allies has acquired the drones but the ground terminals, personnel and operating systems, based at Signonella in Italy, are commonly funded by NATO. Another example is the consortium operating C17 transport aircraft from the Papa airbase in Hungary. This gives NATO a standing airlift capability, which is useful for rapid deployments in crises. PESCO is not focused on these big-ticket items, often referred to as ‘enablers’ as they are the multinational support functions that all armed forces need for high intensity operations, but few nations can afford to buy or operate alone. Where Europeans embark on these major acquisitions, such as in the Future Combat Air System involving France, Germany and Spain, they do this outside the EU structures.

A second condition of success is innovation. At a time when European defence budgets have been going up, the percentage devoted to innovation has been going down. Yet military planning is all about balancing equipping a force for immediate contingencies while preparing the force for new types of warfare in 20 years’ time. History is replete with examples of military powers that dominated one decade but whose armed forces were obsolete by the time of the next. Mussolini’s Italy in the 1920s is a case in point. Its FIAT built tanks were then the most advanced but stood no comparison with German Tigers and Panzers or Soviet T34s by the advent of the Second World War.

So, Europe has to innovate more. The EDF is a good step forward but its budget was cut from €13bn to €8bn, and its seed money has to attract matching funds from the member states if the research projects are to get off the ground. Therefore, EU member states have to increase the percentage devoted to innovation in their national budgets from the current average of 8%. Moreover, 81% of the EU’s defence innovation is funded by just 12 member states. It is thus a lopsided situation requiring innovation to be mainstreamed across the union. Some have suggested that the EU needs a Defence Advanced Research Projects Agency (DARPA), like the one established by the Pentagon, or an EU equivalent of NATO’s Allied Command Transformation. Yet, as mentioned already, the EU has created plenty of new structures of late. So, it makes sense to get the maximum value out of them first and foremost.

Physical capability has to be complemented by intellectual capability

Next is increasing multinational cooperation among EU member states. Only 16% of military procurement is filled by multinational programmes. With most defence equipment being bought at home, or from suppliers outside the Union as 40% of this equipment comes from non-EU sources, there is too much duplication of research and production and too little cross-border competition. The EDA has set a target of 35% for the level of overall procurement going to multinational contracts by the end of the decade. The more EU armies use the same equipment, the easier it will be for them to be interoperable, and the cheaper maintenance should be. The EDA has proposed a code of conduct to encourage member states to advertise their defence contracts multinationally and to accept tenders from other member states. Yet, there is still a lot to do to enforce the principle of open competition in a single defence market and this is one area where the EDA and the new DG DEFIS could apply their collective muscle.

Finally, the efforts of the EU in building more capable and multi-role military forces have to always be seen in the broader context of which missions those forces are being asked to perform. As far as the CSDP is concerned, this is never to simply defeat an enemy on the battlefield, but rather to help international and local civilian authorities to stabilise countries and build local capacity. So, physical capability has to be complemented by intellectual capability. This means fostering a civil-military culture whereby military operations create an environment of security for effective governance and economic development to take root. Training and mentoring local security forces to take over primary responsibility for security is part and parcel of this process. Unless the international/local and civilian/military dimensions are fully joined up and integrated into a realistic and coherent strategy, even the best equipped armed forces will not achieve their mission. So, the new EU Peace Facility with a €5bn budget offers an additional instrument for the EU to assist its regional and local partners. It builds on the previous EU Africa Peace Facility (€3.5bn) but adds the ability of the EU to supply military equipment as well as mentoring. So, EU defence capabilities will henceforth be measured in terms not only of the full spectrum combat power of EU armed forces but also of their ability to transfer something of that military operational art, discipline and organisation to their partners in the European neighbourhood, Africa and the Middle East.

As I wound up my panel at the Portuguese seminar last week and pondered the pandemic analogy of a session entitled ‘Is European defence vaccinated against crises?’, I was minded to conclude as follows. The EU certainly has a much better track and trace system when it comes to identifying its critical gaps and vulnerabilities. The Union has developed a good vaccine to build more resilience and capacity in its armed forces and all its recent initiatives and new resource allocations are akin to administering the first dose of the vaccine. Yet, just as we all need two jabs to be protected against the COVID-19 virus, the EU needs to maintain the momentum over time and create the integrated defence market which is the gateway to real strategic autonomy.


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