On the Way to a European Defence Union
‘Europe is an economic giant, a political dwarf and a military earthworm.’ This is how the then Belgian Foreign Minister Mark Eyskens described the role of the EU and its institutions in the wake of the Balkan wars of the early 1990s. Twenty years later, when asked to put things into perspective, Eyskens noted that, while it was no longer accurate to describe the EU as a political dwarf, the bloc remained ‘completely negligible’ in military terms.
Military insignificance—the EU’s unavoidable destiny?
There are many reasons for this situation. Let me elaborate on two of them. First, and most obvious, there is NATO with the mighty US as an ally. Why should Europeans care for (costly) autonomous defence structures and capabilities when NATO can do the job? Secondly, European leaders were so busy managing successive crises—financial, migratory and health-related—that they paid little to no attention to defence issues for over a decade, and even less to ensuring a decent level of defence capabilities. Even when they realized that the largely asymmetrical defence relationship with Washington could come at a high price (under George W. Bush), that U.S. strategic interests had pivoted from Europe to Asia (under Barack Obama), and that transatlantic security guarantees were fraying (under Donald Trump), they preferred to wait. Until Russia invaded Ukraine.
In February 2022, Europeans were brutally confronted with the inconvenient geopolitical truth that European armies were completely unprepared for a war on their doorstep or the defence of their own territory. As a result, European security and defence has since been undergoing a massive upheaval. This is evident, among other things, in the significant increase in defence spending across Europe. Likewise, many countries have fundamentally reconsidered their security and defence priorities and policies. Take, for instance Denmark, Finland and Sweden whose approach to participating in existing defence structures—namely the EU (Denmark) and NATO (Finland and Sweden)—has profoundly changed.
Europe’s geopolitical coming of age
Importantly, much has also happened at the EU level as a result of the bloc’s awakening to harsh geopolitical realities. Indeed, in response to the war in Ukraine, several EU institutions have taken decisive action, using an innovative combination of intergovernmental and supranational instruments to meet security and defence challenges. In addition to adopting more than a dozen sanctions packages against Russia, opening accession negotiations with Ukraine and creating a special financial support instrument for the reconstruction of Ukraine (the Ukraine Facility), the EU and its Member States have adopted a raft of defence-related measures to deal with the situation.
Many of these defence-related developments at the EU level and their broader implications go, however, largely unnoticed. Therefore, this post sets out to offer an—admittedly eclectic—account of what has happened in the last two and a half years, and fleshes out future challenges. I will zoom in on two aspects. Firstly, I will demonstrate that the EU’s military support for Kyiv under the Common Security and Defence Policy (CSDP) is novel in terms of its nature, financing, and implementation modalities. Secondly, I will unpack defence industrial developments within the EU under the internal market umbrella and show that a series of legislative innovations related to the production and procurement of armament has made the European Commission (Commission) a central defence integration actor. (For a more comprehensive discussion of actors and instruments by the author of this post, see here).
Delivering lethal weapons to Kyiv: a watershed moment for the EU
Let us start with the EU providing military support for Kyiv. In this context, the Council of the EU, that is the meeting of Member State representatives at ministerial level, has taken measures that represent a paradigm shift in the EU’s CSDP in several respects.
The first paradigm shift relates to the nature of the assistance offered to Ukraine, which includes both non-lethal and lethal military equipment and platforms. Commission President Ursula von der Leyen called this ‘a watershed moment’. Contrary to previous practice, lethal weapons are being supplied through EU channels to a country engaged in armed conflict. In order to fulfil the unanimity requirement and considering different national preferences , the Council adopted the relevant decisions with some Member States (Austria, Ireland, and Malta) constructively abstaining—which is an absolute rarity in CSDP decision-making.
Paradigm-shifting funding and training arrangements
The second paradigm shift in military support concerns the way in which it is financed, namely partly by EU money (but not through the EU budget). Indeed, the Council made (and still makes) extensive use of the European Peace Facility (EPF) to refund national authorities for the delivery of weapons systems to Kyiv, raising the facility’s importance to an unparalleled level in terms of scope and content. Created in 2021 through a Council decision as a successor of the Athena mechanism and other funding streams (i.e. the African Peace Facility), the EPF is to contribute to conflict prevention, peace-building, and the strengthening of international security by financing operational actions under the Common Foreign and Security Policy (CFSP), to which the common defence policy (CSDP) belongs. The EPF serves as an extra-budgetary financing mechanism for CFSP actions with military or defence implications, including the supply of arms to strengthen the security sector of a third country. That is because, in accordance with Article 41(2) TEU, CSDP operations with military and defence implications cannot be financed from the EU budget. In the wake of the Russian aggression, the EPF has hence turned into a de facto security assistance fund. So far, € 11.1 billion have been earmarked for military support to Kyiv under the assistance pillar of the EPF.
The third paradigm shift relates to operational activities. Let me focus here on the military mission in support of the Ukrainian armed forces, EUMAM Ukraine, which was launched in autumn 2022. Firstly, said mission includes the training of forces involved in an ongoing international conflict, which represents a departure from traditional CSDP practice. Secondly, this training takes place not in Ukraine but on EU territory, which is a notable innovation. In principle, Article 42(1) TEU provides for CSDP activities to take place outside the EU—not within the EU. But the Council invoked the exceptional circumstances to justify that EUMAM Ukraine takes temporarily place on EU territory. Thirdly, the EPF plays a central role in funding support measures related to military systems designed for the use of lethal force, on which EUMAM trains members of the Ukrainian armed forces.
The Commission as key defence integration actor
In parallel, the Commission has begun to reshape defence industrial structures and procurement arrangement to prepare for a less peaceful present and future. Indeed, the Commission has played (and continues to play) a central role in closing the EU’s defence capabilities gap and in promoting industrial cooperation in the field of defence, which has become much more important in light of the Russian invasion of Ukraine. In this context, it does not come as a surprise that Andrius Kubilius has been designated for the brand-new post of European Commissioner for Defence and Space.
Institutionally speaking, then, one of the main consequences of the current war is the increase of the Commission’s remit in the field of EU defence. The institution made several complementary proposals regarding defence industrial issues, all of which aim at making the EU defence ready and all of which strengthen the supranational dimension of EU security and defence. Traditionally, security and defence policy is the sole prerogative of Member States—including when it comes to production and procurement. Introducing novel supranational (funding) schemes to address production and procurement patterns is therefore a game-changer.
From emergency response to defence readiness: bricolage at its best
The Commission owes its remarkable ascent to being a defence industrial actor—some would also say geopolitical actor—to the successful employment of the ‘bricolage’ technique (see here and here). First, the Commission first proposed EDIRPA (European Defence Industry Reinforcement through common Procurement Act) in July 2022 as a follow up to the European Defence Fund. By co-financing joint procurement up to 15% (or 20% if smaller companies are involved), the aim of EDIRPA is to promote cooperation between Member States in defence procurement and improve the competitiveness as well as efficiency of the European Defence Technological and Industrial Base.
While the legislative process of EDIRPA was dragging on (it was formally adopted only in October 2023), the Commission put forward another proposal in May 2023, namely ASAP (Act in Support of Ammunition Production). Whereas EDIRPA concerns the demand side by incentivizing Member States to jointly procure, ASAP operates on the supply side by supporting increased production of ammunition in EU Member States and associated third countries in order to avoid supply and production shortages regarding ground-to-ground, artillery ammunitions, and missiles. Indeed, ASAP—which was adopted in an ‘urgent procedure’ in only 3 months—mobilizes € 500 million from the EU budget with the aim of reaching a production capacity of 2 million shells per year by the end of 2025. In other words, ASAP was set up to meet the particularly urgent need for certain types of defence equipment cause by the war in Ukraine. So far, the EU has not been able to keep its delivery promises (see here and here), even if production capacities have significantly increased.
Earlier this year, in March 2024, the Commission published its first Defence Industrial Strategy (EDIS) and, simultaneously, put forward a proposal for a European Defence Industry Programme (EDIP), which observers have qualified as turbo-charging of the EU’s defence industry. With a budget of € 1.5 billion, EDIP yields at defence industrial readiness by addressing both short-term and longer-term defence capability needs. The rationale driving these initiatives is: spend more, better, together, and European. This new defence industrial course of increasing defence procurement in Europe (to 60% in 2035) from collaborative EU-based suppliers does, obviously, not please everyone as it seemingly changes traditional procurement patterns. Allegedly, over 70% of European defence spending after the Russian invasion went to US suppliers (although this figure has been questioned). Spending more European means, eventually, spending less abroad—which is not necessarily well received on the other side of the pond.
Whether the Commission will achieve its defence industrial goals is uncertain. What these legislative activities do make clear, however, is that the Commission is currently calling the shots in EU defence (industrial) integration by proactively shaping policies that seek to prepare the EU for an increasingly difficult, even belligerent, world.
‘Defending Europe is a European task’—aspirations and realities
The mission letter to the Commissioner-designate for Defence and Space Andrius Kubilius of 17 September 2024 mentions that ‘[d]efending Europe is a European task’ and that all defence efforts by Member States and the EU (institutions) should come together ‘under a true European Defence Union’. This is an ambitious aspiration that faces several important challenges, though.
The first potential stumbling block is about strategic priorities and preferences, or more precisely the transatlantic elephant in the room. As of now, European security depends on transatlantic security guarantees. Renown experts suggest that a decade of sustained efforts in significantly improving capabilities, deterrence, and division of labour might allow Europeans to become more responsible and, hence, less dependent on the US. But this involves political resolve, money, and strategic foresight—all matters that EU defence has not been known for in the past.
Secondly, and linked to this, defence remains a national prerogative, even if a majority of EU citizens are in favour of more EU defence integration. In the past, national decision-makers have preferred to lose out on efficiency gains by strengthening EU defence to avoid suffering any (real or imagined) sovereignty loss. The Member States’ reluctance to integrate or delegate can be seen in the governance framework of the CSDP. For instance, all decisions with military or defence implications require unanimity (Articles 31(4) and 42(4) TEU). The ongoing obstruction by Hungary on essential CSDP dossiers illustrates (see here and here) that this arrangement puts EU security and defence in jeopardy. As long as national actors see EU integration in defence as a zero-sum game, no ‘true’ European Defence Union will materialize—neither under the intergovernmental CSDP, nor under the supranational market umbrella.
It’s the money, stupid!
The third major challenge is money. Europeans produce and procure military equipment in a largely uncoordinated way and without sufficient consideration to product standardisation, as the recently released Draghi report criticizes. This is precisely what the European Commission wants to change.
What is more, rules on EU defence spending are complicated: EU budget can be spent on strengthening the industrial side of defence, but it cannot be disbursed for ‘expenditure arising from operations having military or defence implications’ (Article 41(2) TEU)—arguably to keep the European Parliament at bay. But will the € 1.5 billion pencilled in for EDIP suffice? And where to find additional money? Redirecting the windfall profits from immobilized Russian assets into the EPF or other EU programmes, including EDIP can in the long run not make up for lacking EU or national funding streams. A recent revision of the rules for financing dual-use projects by the European Investment Bank will make it possible to invest more funds in the European defence sector, but even this adjustment will not generate sufficient resources. Therefore, some have floated the idea of introducing eurobonds for defence (see here and here), but this common debt suggestion did not go down well in all capitals, including in Berlin. Be this as it may, finding enough money will be a key factor of success (or failure) of a European Defence Union.
The EU is certainly no longer a military earthworm, but it is far from being a defence giant. Whether it is a dwarf lies in the eye of the beholder. One thing is for sure, however: The EU has left its comfort zone as a normative power to get ready for the geostrategic challenges of our time. Some are sceptical that this will lead to a true European Defence Union, while others see no other solution to ensuring peace and security in Europe. In any case, defence has become one of the most burgeoning fields of EU integration and is likely to provide us with plenty of food for thought for the years to come.
