Five reasons driving European defence integration after the Ukraine invasion

On 18 May, the European Commission released a new set of proposals that aim to put some forward movement into the European defence ‘project’. Nothing new there, you might think: the past quarter-century is littered with the wrecks of repeated previous efforts to get member states to match their words with action. So far, the irresistible force of the arguments for greater European defence integration – “spend more, spend better, and spend more together”, in the time-honoured mantra – has made little headway against the immovable object of national inertia and vested interests. Could this time be different?

The proposals (a Joint Communication by the Commission and European Defence Agency) respond to a tasking from EU leaders at their 11 March emergency summit at Versailles, in the wake of the Russian invasion of Ukraine. The instruction was to “put forward an analysis of the defence investment gaps by mid-May and to propose any further initiative necessary to strengthen the European industrial and technological base.”

Analysing the capability gaps will have been relatively easy – after all, the agency has been pointing out what is missing for years. As the head of the agency and European Union’s high representative, Josep Borrell, observed at the proposals’ launch, “The European Defence Agency has been working in the last years to explain these gaps, to explain how we can and should fill these gaps. But to tell the truth, we have not gotten a lot of success and nobody was listening to us.” The emerging lessons of the war in Ukraine have mostly confirmed the earlier analysis, while highlighting the particular urgency of restoring air superiority (air defence has been neglected, and drones underutilised), countering Russian long-range artillery, and developing new systems for command and control, surveillance, and data-sharing upon which effective all-arms combat depends.

But it is not just the shock of Ukraine and the attention of European leaders (alas, history shows that such attention can be short-lived) that give hope that, this time, people may listen. Other reasons for optimism include:

1. Many of the old reasons for sterile dispute among member states have fallen away. Europeanists and Atlanticists need no longer argue about whether the focus should be on expeditionary warfare or territorial defence, or whether the point of it all is a stronger NATO or European “strategic autonomy”. The prospective accession to NATO of Finland and Sweden will further minimise the differences between NATO and EU membership; and everyone now agrees that European militaries need to make themselves more of a match for the Russians. (It would be unhelpful, and perhaps premature, to suggest that, after Ukraine, the Russians may need a longish period to lick their wounds before they again become much of a threat to anyone.)
2. Whether by good luck or judgment, the Versailles tasking focuses on the ‘back office’ of European defence. Capabilities and industry are less susceptible to theological disputes than the ‘front office’ issues of operations and deployments, which give rise to all that angst about European dependency on the Americans. (The unspoken but widely understood truth is that eventually the Americans will refocus on the Pacific, expecting Europeans to take on more and more of the burden of their own defence – but that the Americans can probably still be relied on to dictate the timing and methodology of this transition, which will help avert intra-European rows.)
3. Defence budgets are growing, with more and more allies achieving or targeting the NATO target of 2 per cent of GDP spending on defence. That means budgetary headroom – just how are the Germans going to spend their new €100 billion defence fund? – which in turn means scope for new projects, quite possibly shared with other Europeans. (The reverse effect was evident in the years of defence budget cuts following 2008: far from defence ministries embracing more pooling of resources and efforts to get more bang for their depleted euros, defence spending was renationalised and collaboration fell off a cliff.)
4. The new proposals frame what is needed in a sensible, manageable way, with three phases envisaged. First comes restoration of combat readiness – taking training seriously, and “refilling the shelves”. This relates to not just replenishing ammunition, equipment, and spares sent to the Ukrainians, but also to the “hollowing out” that always affects unused militaries – the practice of concentrating resources on maintaining a full “shop window” of apparent assets even if that means running down inventories of ammunition and spares (it is little use having, say, a squadron of a dozen aircraft if a majority are unserviceable at any given moment). The second phase is to augment existing forces and capabilities by attending to the most pressing of the capability gaps identified, and beefing up numbers where necessary. Third is the need to address the future by putting in place a longer-term modernisation agenda, requiring the integration of new technologies.
5. Finally, the Commission is proposing to deploy extraordinary financial firepower. It is offering to take charge of a coordinated war-stock replenishment exercise in the way it did with covid-19 vaccines – with €500m on offer as subsidy to incentivise member state participation. Beyond that, it proposes that member states interested in collaborating on a new equipment capability should form themselves into European defence capability consortia – which, under a new Commission regulation, would be VAT-exempt. And this tax exemption would apply not just to the initial procurement, but also to all through-life costs (operation, maintenance, and decommissioning). The Commission has further suggested that the European Investment Bank may feel moved to increase its support for the European defence industry and joint procurement (€6bn is mentioned).

This new cascade of ‘incentives’ comes on top, of course, of the more than €1bn per annum already on offer for shared R&D projects through the European Defence Fund (EDF) – which, the Commission makes clear, it also aims to increase. With so much ‘free’ money on offer, even the most blinkered national defence ministry must surely now join the queue, however counter-cultural the condition of having to collaborate with others may feel. (Hopefully national finance ministries will fail to spot that such generous recourse to the EU budget means that member states are actually being bribed with their own money.)

So – could this truly be a turning point on the long and weary road to a more coherent European defence effort? The Commission clearly believes so, and that it will be in the driving seat – they “envisage” a future European joint programming and procurement function (that is, the centralised coordination of European defence investment planning and acquisition), to be built on their EDF and joint procurement programmes.

Time will tell whether this confidence is justified, or whether member states will manage to help themselves to the subsidies and then revert to their old, solipsistic ways. But it is certainly not unreasonable to hope that, once lured into experiencing the benefits of “spending better and spending more together”, the EU’s national defence establishments might finally succumb to doing the right thing.