Conflict and Defense

European Defence: NATO and own defence industry

Europese defensie: de NAVO en eigen defensie-industrie - Shaping Europe

An overview of recent developments in European defence.

The defence issue is one of the most important themes that worries both European politics and European citizens. The European Parliament elections in June 2024 showed that citizens are concerned about security and defence and that politicians are trying to provide answers to this. European politicians agree that Europe must be able to protect itself, although there are different views on how this should be done. The media often discusses the question of whether a ‘European army’ should be established. However, this will not happen in the short term. Defence is a competence of the Member States, and they will not easily transfer their sovereignty in this area to the European Union (EU). In addition, a European army is difficult to realise from an organisational point of view. Therefore, a real European army will not be established anytime soon, but the EU can contribute to defence and security in many more ways.

An earlier article – following the American withdrawal from Afghanistan – discussed the necessity of a European army and the other options to improve European defence. In another earlier article, the growing momentum for further defence integration was discussed. In recent years, the field of European defence developed, but now the discussion on defence has become even more urgent. The war on the European continent, the conflict in the Middle East, the presidential elections in the United States (US) in November with possible re-election of Donald Trump, and other geopolitical shifts have made the call for better European defence increasingly louder. But how can the EU achieve this? This article first discusses the urgency of European defence. It then discusses two frequently mentioned opportunities to strengthen European defence: more intensive cooperation through NATO and a better-aligned defence industry. 

The urgency of European defence

The war in Ukraine has given new urgency to a strong European defence. In response to the Russian invasion of Ukraine, German Chancellor Olaf Scholz spoke of Eine Zeitenwende, a historic turning point. Following this speech, a historic change in German foreign and security policy happened, and German defence spending was significantly increased. A similar response was also seen at the European level. The EU had already created the so-called European Peace Facility: a (financial) instrument to increase the EU’s capacity to prevent conflicts, build and preserve peace and strengthen international security and stability. This European Peace Facility was used to support Ukraine. Between 2022 and 2024, the EU mobilised €6.1 billion to meet Ukraine’s urgent military and defence needs. The financial ceiling of the European Peace Facility was also increased by €5 billion via a special Ukraine Assistance Fund. The increased defence spending shows that there are major concerns about the security of the continent.

These security concerns are also reflected among European citizens. War often felt ‘far away’ to many Europeans, but citizens are more concerned since the war now is so close to the EU’s borders. The Eurobarometer of July 2024 shows that almost two-thirds of Europeans are concerned about the EU’s security in the next five years. ‘The war in Ukraine’ is seen as the EU’s biggest challenge at the moment. ‘Security and defence’ and ‘the war in Ukraine’ rank third and fourth respectively among issues the EU should address as ‘priorities’. In six Member States, respondents even give ‘security and defence’ the highest priority (including Estonia (52%) and Lithuania (51%)). This shows that the European defence issue also raises concerns among European citizens. During the European elections in June, almost all parties responded to these concerns. Even though there are differences between left-wing and right-wing parties, since the beginning of the war in Ukraine, most parties believe that a higher defence budget and better cooperation at the European level are needed.

After the elections, Ursula von der Leyen even created a post for a European Commissioner for Defence and Space in her new European Commission. Andrius Kubilius, former Prime Minister of Lithuania, has been put forward for this post. In addition, the candidate for the position of High Representative for Foreign Affairs and Security Policy is the Estonian Kaja Kallas; she previously advocated for heavy sanctions against Russia. The EU thus seems to realise that something needs to change regarding ​​defence.

Cooperation within NATO

The North Atlantic Treaty Organisation (NATO) is highly important to the EU in terms of military cooperation. Since the Russian invasion of Ukraine, NATO has again played a crucial role on the world stage. NATO, founded in 1949 to ensure peace and security, celebrated its 75th anniversary this year. The cooperation between the currently 32 countries still proves to be of great importance. Therefore, the EU and the individual Member States need to continue to focus on NATO. By working together within NATO, the Member States maintain their sovereignty, which is an important condition for defence cooperation for Member States. Cooperation between the EU and NATO still deepens. In January 2023, for example, NATO and the EU signed the third Joint Declaration on EU-NATO Cooperation. This declaration contains the most up-to-date vision of how the EU and NATO work together against common security threats. In addition, the statement states that the EU and NATO are strengthening their cooperation in areas such as ‘growing geostrategic competition’ and ‘foreign information manipulation and interference’.

Nevertheless, Europe will have to make more efforts to continue working together successfully through the military alliance in the future. The US is still the largest power within NATO. If they withdraw further, Europe will also have to be able to stand on its own two feet. Some European countries are accused by the US of ‘free-riding’. In other words, this means not meeting the financial obligation, – NATO members must spend 2% of their gross domestic product (GDP) on defence – but still relying on NATO. In particular, former President Donald Trump spoke out about this. That is why many people in Europe are worried about Trump’s possible re-election. In his previous term, he threatened to stop protecting countries that do meet the financial obligation. More concretely, this means he does not want to comply with Article 5 of NATO – allies help each other when one of the members is attacked – if a country does not meet the guideline. He also said that he “encourages” Russia to do whatever it wants with NATO countries that do not meet their financial obligations. Kamala Harris noted shortly afterwards (as vice president before she became the Democratic presidential candidate) that the American commitment to NATO is “ironclad”.

Apart from the possible re-election of Trump, Europe must also be prepared for a further orientation of the US towards Asia. America has been shifting its focus to the Indo-Pacific for several years; this so-called ‘pivot to Asia’ was already initiated under President Obama. Due to the changing balance of power in the world, the priorities of the US have been in Asia for some time now and China in particular is seen by the US as a threat to the international order. Although NATO is of huge importance, the EU will have to take into account that the relationship with the US may change.

To guarantee efficient cooperation, Europe will have to increase defence spending in order to, on the one hand, make itself more independent of the US, and on the other hand, take away any irritation in its relationship with the US. This way, the so-called ‘European pillar’ within NATO can also be strengthened. This year, the 2% guideline was achieved by a record number of 23 members. There are, however, differences between NATO members: Poland (4.12%) and Estonia (3.43%) spend the most on defence in terms of percentage, and Slovenia (1.29%) and Spain (1.28%) the least. However, this guideline is also criticised because not all defence expenditure directly contributes to ‘better’ defence. In addition, some argue that defence expenditure should not be based on GDP but rather on the current security threat.

European defence industry

The EU itself can make an actual difference regarding industrial policy and the coordination of the European defence industry. The Russian invasion of Ukraine again showed that the European defence industry is very fragmented. Since defence is a competence of the Member States, there are many differences in their approaches. This complicated rapid European (military) support for Ukraine. In addition, it turned out that approximately 80% of European defence procurements come from outside the EU. In order to be able to respond more adequately to these types of situations in the future, the European Commission wants a harmonised European defence industry. Despite the fact that defence is a competence of the Member States, the EU does have competences in areas such as the internal market and research. This way, the Member States maintain their sovereignty in the field of defence, while at the same time, there is a coordinated approach at the European level regarding the defence industry.

Therefore, in March 2024, the European Commission presented the European Defence Industrial Strategy (EDIS). This is a framework to strengthen the European defence industry by investing “more, better, together, and European”. It also aims to make the European defence industry “stronger, more responsive and more innovative”. The strategy contains three main goals for 2030. First, “the value of intra-EU defence trade should represent at least 35% of the value of the EU defence market”; second, “at least 50% of Member States defence procurement budget should be devoted to procurement from the European Defence Technological and Industrial Base”; and third, “Member States should procure at least 40% of defence equipment in a collaborative manner”. To this end, also a new European Defence Industry Programme (EDIP) was introduced at the same time. This is a Commission regulation to implement the measures of the EDIS and includes financing possibilities of €1.5 billion for the defence industry.

The recently published report by former President of the European Central Bank Mario Draghi confirms the need for a better defence industry as well. Draghi argues that the EU’s competitiveness (in more areas than just defence) is not doing well. Regarding defence, Draghi says that although the EU’s defence industry is still globally competitive in several sectors, there are also several weaknesses. He explicitly mentions ‘overall public spending’, ‘industrial footprint’, ‘coordination and product standardisation’, ‘international dependency’, ‘innovation’, and ‘governance’ as weaknesses. Draghi has also set several EU goals with regard to defence, including strengthening the defence industry to ensure long-term sustainability and technological and industrial competitiveness. Furthermore, Draghi argues for more investments in research and development. Draghi’s research results can contribute to the actual design of the defence industry, which will have to be built in the coming years.

Future of European Defence

As results from concerns in politics and among EU citizens, the EU must work on the defence issue. Recent years have shown once again that integrated and coordinated cooperation is necessary. Despite the fact that a real European army will not be created anytime soon, the EU can improve a joint defence strategy. Further European defence cooperation via NATO is essential for the EU. However, this requires more money. Therefore, European NATO members will have to invest more in defence and thus strengthen the European pillar within NATO. At the same time, the EU must work on the European defence industry. There are several proposals at the moment, which will have to take shape in the coming years. The European defence industry also strengthens NATO and can create a more equal relationship between Europe and the US. The two options are complementary and will therefore be implemented simultaneously. In addition, Member States will continue to work on other types of cooperation, in which not all Member States are involved. An example of this is the cooperation between the Netherlands and Germany with regard to the integration of Dutch and German combat brigades.

In any case, the defence issue will be worked on in the coming mandate. Once the hearings of the European Commissioner for Defence and Space have taken place, he will be able to start coordinating the European defence industry. In the coming mandate, a lot of investments will also have to be made to ensure security in the world, and, in particular, on the European continent. In short, European defence is a topic to keep an eye on because many developments will (have to) take place to improve European defence.

Hanna Krijgsman van Spangenberg holds a master’s degree in Political Science from Vrije Universiteit Amsterdam and a bachelor’s degree in European Studies from the University of Amsterdam with a major in European history.

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