Lowering down US concerns over Europe’s Defence Take

The U.S has many times voiced concerns over the Europeans’ will to develop a strategic autonomy in recent years. Arguably, the different defence initiatives the EU is undertaking could undermine NATO’s strength by creating duplications and discrimination between EU-NATO countries and other member states of the Alliance, thus hindering the transatlantic bond.

On May 2019, two U.S defence undersecretaries sent a letter to High Representative of the Union for Foreign Affairs and Security Policy, Federica Mogherini, stressing their concerns over both the “unnecessary competition between NATO and the EU” and the participation of third-states within the PESCO and European Defence Fund (EDF) framework. Europeans must avoid duplications and they should not shape the EDF and PESCO in a too exclusive manner, as it could arguably undermine interoperability between EU and non-EU-NATO allies according to the U.S.

In the light of different facts, these different arguments should however be mitigated, and even questioned. In fact, U.S concerns over the EU’s increasing role within the defence field might rather be guided by a desire of keeping political influence and military technological hegemony on the European Continent. As Europeans are trying to consolidate their fragmented defence market, the U.S would arguably be willing to obtain lenient treatment for its defence industries before last adjustments of the European Defence Fund and PESCO are settled down.

Developing a European strategic autonomy does not mean becoming independent, and the EU “will not enter into collective defence” as Diego de Ojeda, European Commission Representative to the Political and Security Committee, said in a recent Summit organized by Beyond the Horizon end of October. On the contrary, the EU is trying to reconcile ends and means to enhance its contribution to NATO’s fair burden sharing. In that sense, the EU is working on pooling and sharing the resources of its different member states’ restricted defence budgets in a more coherent and optimal manner. Elsewhere, the EU is strengthening its ability to undertake crisis management as well as other issues that fall out of NATO’s scope.  

The EU is stepping up its efforts to enhance its contribution towards NATO, and it would be misleading to claim EU’s defence approach weakens NATO. As seen with the Military Mobility, the EU is in some cases in a better position to address key issues also relevant to NATO, as it has a regulatory power that the Alliance does not possess. The EU is also very attentive in avoiding any unnecessary duplication vis-à-vis NATO. For instance, the EU’s Capability Development Plan takes into account NATO’s Defence Planning Process (NDPP) in regard to capability shortfalls to provide complementarity on future developments that need to be addressed. Moreover, PESCO “aims to make member countries’ militaries much more integrated with each other” which should ease standardization and interoperability on the European Continent.

However, although PESCO should in the long term provide a full-spectrum package, its members will surely continue acquiring high-end military equipment on another basis. Even though 34 projects have so far been unveiled, PESCO has not yet reached the level of ambition desired. Furthermore, capabilities emanating from PESCO will belong to its member states, and not to the EU. Capabilities provided within this framework, could therefore be of use under the UN or NATO umbrella. Moreover, it seems very unlikely that participating member states (pMS) could in practice be forced out of PESCO in case they might not hold their obligations. Consequently, U.S. concerns over possible duplications arising from PESCO as well as Europeans’ ability to develop full spectrum capabilities on their own should be weighed.

On the other hand, the upcoming European Defence Fund (EDF) set for the period 2021-2027 which will need some adjustments under the new Von der Leyen Commission needs to be put into perspective. The EDF is a major step concerning the EU’s posture towards defence matters, but its aim is certainly not to build a Fortress Europe nor to be a direct competitor vis-à-vis the U.S defence industry. The EDF will rather be an enabler directed at incentivizing EU states to invest in fundamental research and more ambitious defence capability projects that they would not consider without the financial help provided by the EDF. In that regard, the EDF will share the investment risk – which in some cases can go up to 100% for research and design phases – thus encouraging Europeans to launch more ambitious projects together. The fund will comprise, one research window which will allocate 500 million € per year and a capability window that will provide 1 billion € per year.

However, despite having the possibility of getting funds from the EDF, many states might choose to develop projects out of it, if they argue the conditions set by the Commission are too slow and heavy for the projects they are willing to develop. Working on an intergovernmental level out of the EU realm or buying off-the-shelf military equipment therefore remains a strong possibility. This is specifically true considering R&D budget on both sides of the Atlantic. In 2016, the U.S invested up to 78 billion $ (± 70 billion €) in R&D while the aggregate number for Europeans amounted to 6,1 billion €. In the future, the EDF will be able to narrow the gap with the US, but only to a limited extent. Consequently, higher R&D budgets will allow U.S companies to have an edge over Europeans when it comes develop state-of-the art equipment and disruptive technologies, thus allowing them to be more competitive on the defence market.

Accordingly, EU countries will surely continue purchasing U.S military equipment not only because they provide their national forces with higher readiness but also because they believe buying U.S military equipment is key to ensuring U.S security guarantee on the European Continent. The U.S. for example utilizes the European Recapitalisation Incentive Programme, to provide former-soviet equipped countries – some of which are EU members – US military material, in many cases at the expense of European defence industries. Considering the aforementioned factors, the EU’s shift towards defence matters does not seem to pose a threat neither to NATO’s strength nor to the U.S industry. On the contrary, the defence trade balance is very much favourable to the U.S, and “around 81% of international contracts go to US firms in Europe today” declared Federica Mogherini. It is totally understandable the U.S wants to secure its access to the EU defence market, but not by pretending the EU defence initiatives are discriminatory towards its industry.

The EU has no equivalent to a “Buy American Act”, nor has it an International Traffic in Arms Regulations (ITAR). Actually, the European Defence Market is much more open than its American counterpart, and third states will be able to participate to PESCO projects on an ad hoc basis, and non-EU owned companies will be able to get funds from the EDF under certain conditions. In regard to the EDF, the only criteria driving the conditions set by the Commission is that “[they] are security based, they are objective and there are transparent, and they do not impose any requirement on non-EU controlled entities that is not imposed, or that EU controlled entities do not have to comply with” when operating out of the EU Diego de Ojeda said. Furthermore, he added that equipment and technologies produced within the EDF framework should primarily benefit the EU. In that sense, non-EU owned companies should not be able to undermine ongoing projects or restrict the freedom of use of developed capabilities.

Washington decisionmakers should not be worried about the EU’s increasing role within the defence realm. They should rather perceive the above-mentioned initiatives as the best and only way for Europeans to mutualize their efforts regarding both their own security and NATO’s burden-sharing. As seen in a previous article on Europe’s two competing next generation fighters, Europeans still very much conceive defence industrial matters through a national prism. It might therefore take some time before Europeans are able to give up a part of their sovereignty to build a real European Defence Technological and Industrial Base, capable of truly competing against the U.S defence industry. Finally, the new Von Der Leyen Commission will make the lasts adjustments as to third states participation within the EDF framework. In any event, the US will be able to continue working on bilateral or multilateral basis to export or develop military equipment with European Union member states.

Scriptum Post: A third batch of 13 new PESCO projects has been unveiled on November 12 as we write these lines

* Defence Analyst