EU defence cooperation: out of the old comes the new

One of the criticisms associated with plans for closer European defence cooperation is that there are no new ideas around. The ‘EU Battlegroups’, ‘Permanent Structured Cooperation’, even the ideas for an ‘EU Operations Headquarters’ or a ‘Defence Semester’ are seen as old and sometimes unwieldly initiatives, reminiscent of debates that have hardly made any progress over the past decade. For their part, labels such as ‘EU Army’ or ‘Permanent Military Headquarters’ have counter-productively hijacked the entire public discussion.

Even the term ‘Defence Union’, alas, risks concentrating the minds on a hypothetical end product – still controversial among EU governments – rather than on the building blocks and practical steps which could indeed lead to closer European defence integration: what may appear useful in political terms – formulating and canvassing a long-term objective that would complement other existing ‘Unions’ – can actually backfire in policy terms.

Perhaps we need to look at the various policy ideas and treaty provisions that relate to defence in a different light. And maybe the key is to experiment with combinations of old ideas with a new perspective in mind: out of the old comes the new.

The EU Global Strategy (EUGS) provides us with that new perspective as it frames ‘defence’ in a broader vision – based on common interests, principles and priorities – that takes fully into account the complex and multi-faceted nature of today’s security challenges. It offers a response to the widespread demand for more ‘security’ among European citizens without ignoring that the drivers of their perceived insecurity vary quite significantly depending on whether one lives in Tallinn or Paris, Athens or Copenhagen, Brussels or Cologne. The EUGS follow-up process – ‘from vision to action’ – recently launched by HRVP Federica Mogherini is intended to develop that wider, ‘integrated’ approach further by going deeper into the details of what the EU and its member states can achieve together in order to make Europe and Europeans safer in the short and medium term. Yet the specific challenge for the EU implementation plan for security and defence (SDIP) recently tabled by the HRVP is the relatively short timeframe to devise new ideas and incentives for cooperation. For this to work, markers need to be put down now in order to steer cooperation and integration long term: implementing any new operational or even strategic level of ambition will take time to develop.

Just to give an example, a ‘Joint Civil-Military Operations Centre’ could well be established over the next few months, first by expanding the Operations Centre of the Military Staff Directorate-General into a sort of Military Planning and Conduct Capability (MPCC), parallel and symmetric to the already existing Civilian Planning and Conduct Capability (CPCC), then by interweaving them; however, the process of full civil-military integration will take more time and may require maintaining distinct chains of command. Similarly, closer interaction and gradual integration between the EU Intelligence Assessment and Situation Centre (INTCEN) and the Intelligence Directorate of the European Military Staff (EUMS INT) can enhance situational awareness and shared analysis without raising the kind of controversy – and ultimately opposition – that talking of a ‘European CIA’ does. In both cases, quick deliverables inspired by the quest for efficiency and effectiveness could lay the foundations for longer-term achievements while leaving time and space for adjustments along the way, in light of the experience made and the lessons learned.This is only to reiterate that, in today’s EU, putting an ambitious but potentially controversial cart before the horses risks complicating the kind of incremental integration based on solidarités de fait that the founding fathers of the European project correctly identified as the best way forward.

Incentivising cooperation

How can old ideas produce new outcomes? So far, European defence cooperation has risen or fallen on the promise of (as yet unused) treaty provisions such as Article 42(6) and 46 of the Treaty on European Union (TEU) — known more commonly as Permanent Structured Cooperation (PeSCo). Defence cooperation has remained largely intergovernmental, even though supranational elements such as the 2009 ‘EU Defence Package’ on defence procurement and defence transfers (Directives 2009/43/EC and 2009/81/EC) aim to improve security of supply. However, it might now be worth considering what role tailored financial incentives could play in encouraging the member states to deepen their defence cooperation through existing treaty provisions.

This is in part happening already, albeit still on a small scale and with a limited scope, through the Preparatory Action on defence-related R&T, which may develop into a European Defence Research Programme with the next Multi-Annual Financial Perspective. Yet deepening defence cooperation at EU level is increasingly important to develop economies of scale and use resources more efficiently, in view also of the rising costs of advanced defence technology, the emergence of new global competitors and the need to retain – as the EUGS also states – ‘an appropriate level of strategic autonomy’. Such level may remain a moving target, depending as it does on the types of action to undertake and the potential partners to engage, but it represents an important marker for future joint planning. And while there are many positive examples of member states pursuing closer defence cooperation (and even integration) though bilateral or sub-regional clusters, 80% of defence investment in Europe is still spent nationally. The persisting fragmentation of Europe’s defence sector, in other words, needs to be reversed for both economic and strategic reasons.

Another important building block will certainly be the European Defence Action Plan (EDAP) – the first ever – that the European Commission is set to present right before the December European Council; and it will be essential that the priority areas for investment earmarked in it reflect and build upon those identified in the SDIP. Moreover, interestingly, the Commission recently announced a plan to create a ‘European Defence Fund’. This idea deserves attention and may pave the way for innovative approaches that could indeed help reframe old ideas in a new perspective.

For instance, financial contributions towards defence could be made via the European Fund for Strategic Investments (EFSI), which aims to leverage €315 billion worth of investment in the EU over a three-year period. The EFSI makes co-financed investments in high-risk projects possible, but it grants loans with the prudential oversight of the European Investment Bank (EIB) and the European Commission. The EFSI has been designed to invest in Europe’s real economy – which of course includes the European Defence Technological and Industrial Base (EDTIB).

Any ‘European Defence Fund’ could provide ‘seed’ capital or capital investment during the procurement cycle. It could contribute to maintenance costs and investments in critical defence infrastructure. It could also lead to procurement collaboration between member states, which may lead (as called for by the EUGS) to a gradual synchronisation ad mutual adaptation of defence planning cycles; and it could enhance cooperation between the European Commission and European Defence Agency (EDA) in relation to the identification of key defence capabilities.

No matter how any future European Defence Fund is configured to support the defence sector, there will be a number of obvious policy implications. Co-investment by the Commission and the EIB would raise interesting questions about intellectual property rights and, potentially, about co-owned capabilities — but answering such questions convincingly is part and parcel of the ambitious agenda ahead.

A European Defence Fund may potentially effect defence cooperation in other ways too. Indeed, use of the EFSI comes with specific conditions that can feed into defence cooperation. For example, many complain that the rules of the Stability and Growth Pact (SGP) stymie investment in defence. Under the EFSI however, and as made clear by the European Commission (COM(2015) 12 final), it could be possible under certain conditions to give member states some flexibility on SGP rules when co-financed investments under EFSI are made. In particular cases, member states may even deviate from their SGP adjustment path target when making investments — especially if, for example, their GDP growth rate is negative or below its potential. This could afford member states with the flexibility to invest in defence without fear of running excessively high deficits.

Another area where sensible marginal improvements to existing mechanisms setting the right incentives could make a major difference is the way in which EU military operations are funded. The principle, borrowed from NATO at the start of CSDP, whereby ‘costs lie where they fall’ has in fact generated negative incentives and made it harder for member states to engage in common operations. Despite the creation of the Athena mechanism more than ten years ago, the level of co-financing of CSDP military operations – which French Defence Minister Jean-Yves Le Drian considers an indicator of European ‘solidarity’ – remains extremely low, at approximately 10% of the overall expenditure. The countries that are willing and able to offer forces and equipment for overseas deployment have thus to pay twice. In a situation of declining national budgets and rising costs, this reverberates badly on Europe‘s collective responsiveness and even credibility.

The fact that the ‘EU Battlegroups’, in standby since 2008, have never been deployed is often linked also to the lack of appropriate resources to that end. Widening the definition of ‘common costs’ (within the Athena mechanism) and finding more pragmatic and creative ways to use other sources of common funding (within the EU budget) could indeed offer key incentives for the member states to be more responsive and proactive, and perhaps even help raise the operational bar – for instance, from battalion- to brigade-level capacity for rapid reaction operations. Needless to say, all this could eventually benefit NATO, too, as many units earmarked for the EU Battlegroups are also potentially available for NATO operations, and cooperation between the EU and NATO against ‘hybrid threat’ may require swift coordinated action.

Structuring cooperation

Putting a European Defence Fund in the game and mobilising more common funding for military operations might also encourage the use of other initiatives, as yet untapped but contained in the treaties. For example, Permanent Structured Cooperation — an ‘old’ idea — could be reframed as the legal vehicle through which to ensure that any European Defence Fund is used to its fullest potential. As the treaty protocol on PeSCo makes clear, the aim would be to harmonise military needs, ensure interoperability and encourage major joint European equipment programmes. If Europe is really to support the EDTIB, then an ambitious capability programme is required sooner rather than later, and PeSCo could become both a vehicle to meet new targets and a catalyst of existing initiatives, with a potential multiplier effect across the board. As such, it could initially be put on the table as a first desirable point of arrival in the implementation process – arguably by 2018 rather than within the next few months – rather than its sole possible point of departure.

Additionally, tying common EU funding with Permanent Structured Cooperation in this way could give the European Defence Agency (EDA) a more active role. PeSCo already foresees the EDA playing a role in the regular assessment of contributions and capabilities for those member states engaged in this particular scheme. Accordingly, the Agency and its Steering Board could oversee the process by monitoring progress and serving as an interface with the European Commission and the European Investment Bank — and, according to the capability programme in question, with specialised procurement agencies. This is indeed where a periodical coordinated review process could find its place and value-added — as less than a ‘Defence Semester’ but more than a bureaucratic information exercise.

Using any dedicated EU funding to support PeSCo would clearly raise questions. Some may claim that it could potentially lead to a ‘two-speed’ or ‘two-tier’ Europe on defence. Indeed, the original intention behind Permanent Structured Cooperation was to graft the model of Economic and Monetary Union on to defence — ‘cooperation’, therefore, is used in the singular rather than the plural. Just like the single currency, PeSCo was initially designed to be a ‘single’ legal mechanism to eventually establish, indeed, a sort of ‘Defence Union’. Given that its initiation is dependent on a qualified majority in the Council, there would be questions as to whether agreement could be achieved without a balanced ‘package’ including the building blocks mentioned above and some trade-offs between the possible participants.

Of course, it needs to be recalled that Permanent Structured Cooperation is non-exclusionary and voluntary, so any member state could participate as long as the agreed-on criteria and indicative benchmarks are met. For those member states that are most eager to trigger PeSCo, however, perhaps one way of securing its establishment would be to use the EFSI to invest in critical defence infrastructure – airfields, seaports, rail-lines, barracks, etc. – in those other member states that, otherwise, may not be instinctively favourable to using Article 46. The difficulty of moving and deploying forces and equipment rapidly across Europe is, incidentally, the main shortfall recently identified also by NATO in the context of a reassessment of the ability of the Alliance to react and respond to a conventional or ‘hybrid’ threat on its Eastern flank. Yet NATO does not have own collective mechanisms to address that – while the EU could indeed devise incentives and mobilise resources (including from its structural funds) to that end. Here, once again, lies a key comparative advantage of the EU framework whose potential benefits deserve to be explored further, and a key test for the level of ambition and ‘strategic autonomy’ Europeans should aim at.

Communicating cooperation

Although the availability of comparative polling data in this domain remains limited and incomplete, public support for closer European cooperation on defence seems to be significant – even quite strong – across the entire continent. It appears therefore less urgent to spend a lot of time and resources on explaining the virtues of cooperation to citizens: they seem to understand that already, albeit at an instinctive and perhaps superficial level. Efficiency and effectiveness, synergy and solidarity all play an important part in their perception of European defence (and security) cooperation. Nevertheless, a few carefully selected success stories, presented in accessible language, with illustrative scenarios, concrete cases and personal examples, could help solidify and possibly enhance public support. This is a domain in which communication needs to be simple, avoiding the jargon and the acronyms that often characterise the policy debate, and at the same time accurate in explaining what defence cooperation is for – and what not.

Avoiding over-ambitious and sometimes over-simplistic rhetoric not matched by tangible and achievable results (or even contradicted by facts) as well as language that may prove divisive among citizens who come from different national traditions is equally important. This applies not only to citizens, actually, but also to decision-makers in member states, who are often prone to claiming that a core public good like security can be provided more effectively at the national than the EU level. To them, in particular, one should ask the simple question whether they can name a significant international security problem that can be solved more efficiently with less cooperation, and take it from there. To quote social scientist Robert Axelrod, the complexity of cooperation – of which the EU itself is a quintessential case – cannot trump its overarching benefits for collective action.

This article draws upon some recent EUISS publications, notably: European Defence Cooperation: The Case for an EU-funded Defence R&T Programme (February 2016); Envisioning European Defence: Five Futures (Chaillot Paper no.137, March 2016); Making Europe and Europeans Safer (Alert no.39, October 2016); After the EU Global Strategy – Consulting the Experts: Security and Defence (October 2016). All are available here.