On Sunday, February 28th, Germany and the European Union have signaled unambiguously that they will actively stand on the side of Ukraine against the Russian invasion, even with militarily effective action. To be sure, this is not yet a case of collective self-defense (Article 51 of the UN Charter). But there is no doubt that the military dimension of German and European policy toward Russia will be strengthened. This is reflected in the extraordinary defense policy announcements and decisions made on Sunday. They include, not least, remarkable new mechanisms for financing armaments and arms deliveries. Although other issues are of course in focus at the moment, these budgetary and constitutional issues should not be completely lost sight of. They are of considerable importance for the medium- and long-term orientation of military and security policy in terms of democracy and the rule of law. The following remarks, which are necessarily only sketchy, focus on the Union’s pledged support for Ukraine through financing and supplying military weaponry. Here, the Union is using a financing mechanism that was only introduced in spring 2021, the European Peace Facility.
The political context
In his government statement, Chancellor Scholz reiterated in the Bundestag that Germany will supply war weapons to Ukraine. For the time being, this involves 1000 anti-tank weapons as well as 500 surface-to-air missiles. But even beyond the question of supplying weapons to ongoing conflicts, Scholz’s statement indicates that German defense policy is receiving a tangible boost. A special Bundeswehr fund of 100 billion euros is to be set up to invest in equipment, personnel and weapons for the Bundeswehr and to ramp up armaments. The Basic Law is also to be amended for this purpose. NATO’s two-percent target is not only to be met in the future, but exceeded. The presence of the Bundeswehr in Eastern Europe is to be expanded. Territorial/allied defense will be revived as a defense policy paradigm, having taken a back seat to international military interventions („out of area“) since 1990. Scholz has also envisaged the strengthening of the „sovereignty of the Union“ and thus the goal of an autonomous European Union capable of military action, which Emmanuel Macron first put into words in 2017 („Sorbonne speech“).
The resolutions of the informal (video) meeting of European foreign ministers accordingly mark the Unions` claim to be capable of effective action in the field of defense policy. According to these decisions, the Union will side with Ukraine with militarily effective action – even if not with its own boots on the ground. The Council of EU Foreign Ministers, led by the High Representative for Foreign Affairs, Josep Borrell, has decided that the Union will directly support the Ukrainian armed forces with 500 million euros: The Union will finance and supply war weapons and supplies to Ukraine. In Borrell’s words, „Since there is a fully-fledged war in Ukraine, and we want to do everything to support Ukraine, we have decided to use our capacities to provide arms, lethal arms, lethal assistance to the Ukrainian army for a value of €450 million support package and €50 million more for the non-lethal supplies – fuel and protective equipment.“
No pacifism clause in the EU treaty
The fact that the Union is financing the equipment of the Ukrainian armed forces with weapons of war is prima facie in open contradiction with the Union Treaties. Article 41 of the EU Treaty regulates the financing of the Union’s Common Foreign and Security Policy, which includes the Union’s defense policy. Accordingly, expenditures for the Common Foreign and Security Policy are charged to the Union budget. This includes administrative expenditure, but also operational expenditure for foreign and security policy measures. Expenditure resulting from measures with military or defense implications, however, is expressly excluded from financing from the Union budget (Article 41 (2) TEU).
This means: no Union budgetary resources for military operations of the Union (operational legal basis: Art. 43, Art. 42 para. 7 TEU). Some want to exclude other actions with defense policy or military implications (legal basis: Art. 28, Art. 42 para. 4 TEU) from the financing ban. However, this is not convincing: the wording of Article 41 (2) TEU is quite broad („implications“). Therefore, the financing ban also applies to arms deliveries to third countries.
The prohibition on financing Union action in the field of defense policy is not, however, a pacifism clause in the treaties. It does not make measures with military or defense implications – which the treaties do provide for! – inadmissible. This also applies to arms deliveries: They are part of the arsenal of foreign and defense policy measures that can be lawful under the Union’s constitution (as well as under international law). This is also confirmed by the Union’s (non-binding) rules on arms exports (see recital 12 of Council Common Position 2008/944/CFSP of 8 December 2008). However, according to these rules, as well as according to the similar German export guidelines, no deliveries are to be made to crisis regions.
However, this does not change the fact that the prohibition of financing in Article 41 (2) TEU is not a substantive prohibition of action. It cannot exclude the joint financing of the Union’s defense activities outside the Union budget. But what, then, is the purpose of the financing ban? The purpose is institutional. The ban on financing excludes the Union’s defense-related, militarily relevant activities from the shaping and controlling influence of the Union’s budget legislator. In practice, this is directed against the European Parliament. Union constitutional law seeks to keep the European Parliament out of foreign and security policy altogether (cf. Art. 24(1), Art. 36 TEU).
Shadow Budget of the Union for Defense Policy
Although the exclusion of budget financing is legally intended to limit neither the Union’s military agency nor other measures of defense policy, in practice it does: It means that Union measures with defense policy and military implications must always be financed on an ad hoc basis. This is one of the factors that make military and defense policy action by the European Union so difficult. This is where the European Peace Facility, adopted by the Council in 2021, comes in.
This instrument can be used to finance the common costs of Union military operations and defense policy support measures for third countries to strengthen their military capacity to act. This includes military armaments of countries outside the Union. The resources of the facility come from minimum contributions and regular contributions from the member states, which are calculated in proportion to their economic performance (gross national product key). In the current budget period until 2027, approximately 5.5 billion euros are earmarked as the regular endowment of the facility. This seems little compared to the German defense budget, but on the other hand makes the pledge to Ukraine all the more significant: The 500 million euros pledged to Ukraine account for almost ten percent of the Facility’s long-term financial endowment.
The Facility is a special legal entity with legal and operational capacity, led and supervised by an intergovernmental board of the member states („Facility Committee“). It is outside the political control of the European Parliament and thus constitutes a shadow budget for the Union’s defense policy. As a long-term financial instrument, it certainly strengthens the Union’s ability to act effectively, through military action and other defense policy means. This is especially true in constellations as pressing as the present one. However, the significance of the European Peace Facility is not limited to financing individual measures. Rather, it is part of a comprehensive package of measures with which the Union is working to intensify political and military integration in EU defense policy in order to further develop and expand its military agency.
The prospects of a reinvigorated EU defense policy
The arming of Ukraine with European financial means may enjoy widespread support among European populations scandalized by Putin’s egregious actions. But this should not obscure the fact that it is the result of largely arcane decision-making processes: Neither the establishment of the European Peace Facility nor the breaking of the Union’s rules on arms exports by supplying weapons to the war zone Ukraine was the subject of a substantively open public discourse and will formation. In fact, also with regard to this, it holds true that EU defense policy is largely conducted in a technocratic manner – beyond the supervision of the European Parliament and public scrutiny.
In the Ukraine crisis, the need for joint, European action on defense policy issues becomes particularly apparent. The Union will undoubtedly use the crisis as an opportunity to push integration in defense policy even further. This applies in particular to the task of European alliance/territorial defense, which is laid down as a function of the Union in Article 42 (7) TEU. Here, nothing less than a fundamental change in the Union’s function is in prospect and up for debate: from a civilian peace project to a defense union that positions itself as a military and defense policy actor in a reawakening East-West confrontation.