Already fighting for funding and political credibility, the coronavirus crisis has created new challenges for the EU’s defence ambitions. While the European Commission is trying to sustain a level of commitment, the prospect of budget cuts and a lack of European unity in the post-COVID-19 world will become more acute in the coming months of budget negotiations. Despite the pressures, member states should resist the temptation to underfund and sideline their ambitions. The case for EU defence cooperation is stronger than ever.
Since 2016, the European Union has been establishing new defence tools in response to the deteriorating strategic environment surrounding its borders, the challenges presented by Brexit and doubts over the US security guarantee. Four years later, the results are mixed. A flurry of initiatives has led to a growing role for the Commission and greater commitment by member states, with a focus on industrial rather than operational cooperation. But, although useful, the new toolkit is not yet transformative: so far, what is indisputably a giant leap for the EU has only been one small step for the defence of Europe.
The danger is that COVID-19 disrupts the development of EU defence policy, hampering the long-term potential for European defence cooperation.
The first hurdle, as ever, is money. COVID-19 is likely to have two direct impacts on the funding of EU defence: there will be less money available and defence will be less of a priority.
First, as European states endure a massive economic recession, defence spending will come under pressure. As a comparison, in the years following the 2008 financial crisis, European defence spending was cut by about 11 per cent in total. National budget cuts of a similar scale now would have long-lasting effects on Europe’s defence capabilities and limit what states can invest in EU defence tools – as well as their hopes of getting near the NATO 2 per cent of GDP spending target. Europe's strategic environment has significantly deteriorated since 2008 and European leaders are more focused on the multiplicity of threats surrounding them today. But some level of cuts to defence spending seem inevitable. European countries must avoid uncoordinated budget cuts and aim to make savings in the right areas, without needlessly dismantling complex supply chains or disinvesting in crucial R&D.
Second, defence may slip down the priority list, with the pandemic creating a host of urgent economic needs. Even before the coronavirus hit Europe, the proposed EU defence ambitions seemed likely to lose out in negotiations for the next EU budget for 2021-27, in which new priorities, such as defence or the Green New Deal, compete for funding with traditional EU favourites like agriculture and support to poorer regions.
Initial budget proposals in early 2020 suggested cutting in half the original €13 billion funding for the new European Defence Fund (EDF) – aimed at strengthening the EU defence industrial base and encouraging joint R&D and procurement – and cutting all funding for the €6.5 billion plan to improve military mobility on the continent. The latest Commission proposal, published in May 2020, sends a slightly more positive signal. While still falling far short of the original ambitions, funding levels are slightly higher than the pre-pandemic proposal, with the EDF and military mobility project receiving €8 billion and €1.5 billion respectively.
Member states will now need to negotiate around the Commission’s proposal. Some countries have already expressed alarm and disappointment at the reduced level of ambition, although each has its own priorities – with France pushing for a bigger pot for the defence fund, and Central and Eastern European states, as well as a cross-party group of MEPs, arguing in favour of a more significant military mobility project. In the coming weeks they will have to fight to convince other member states that adequate defence funding should remain a priority.
If the final agreement is close to the latest proposal, this would be a disappointing but not disastrous development and would send a signal that, despite COVID-19, the EU does not want to abandon its long-term objectives altogether.
The second obstacle to stronger EU defence is European unity and political will. EU defence only makes sense as a project if European countries believe they will support each other in times of crisis. As with many of the big questions facing the bloc, unity and solidarity are critical issues. Member states still struggle to overcome the political and strategic hurdles to jointly invest in the tools and capabilities they need and deploy them in joint operations. Political will is crucial if the EU is ever to become an effective framework for European security – alongside NATO – as well as a credible partner. If the response to the pandemic and subsequent recession is mishandled, it could further undermine the overall cohesion required for the EU to become a serious defence actor.
At the same time, the case for advancing EU defence policy has never been more compelling. The logic is geopolitical and economic. With transatlantic relations under strain, and Europe at risk of being penned in by US-China competition, the benefits of a more coherent, effective and self-reliant EU are obvious. In addition, as they face a severe economic recession, member states have even more to gain by pooling and sharing their scarce military resources and utilising economies of scale. A recent joint letter to EU partners from the German, French, Italian and Spanish defence ministers, as well as a Franco-German policy paper circulated ahead of the 16 June defence ministerial, suggest that there is increasing recognition of this, even amongst those hardest hit by the pandemic.
COVID-19 and the economic recession will force the EU to confront its priorities. There is still a long way to go if the bloc is ever to achieve the goal of 'strategic autonomy'. But the current crisis provides an added rationale for European defence cooperation to be part of the EU’s recovery, and there are clear signs that the Commission and some member states recognise the importance and urgency of such a project. Now they must go and win the argument.
Alice Billon-Galland, Research Associate, Europe Programme.