The thundering roar of an F-35 fighter plane rips through the tranquillity of the snow carpeted Norwegian landscape. Its silhouette is just visible under the thick layer of clouds. Then, all is silent again.
During this NATO exercise, soldiers act out their roles among the pine trees, testing how they cope with the cold weather conditions. Meanwhile, a real and deadly war is unfolding in Ukraine.
This ‘Cold Response’ manoeuvre took place in March – and was announced eight months before Russia invaded Ukraine. But while around 30,000 soldiers from across Europe and North America, including France, Poland and Spain, practised their winter warfare, the question of European defence was being asked ever more loudly. In the face of Russian aggression had the time come for the European Union to become a military power in its own right?
War in Ukraine will be long-lasting, ‘shaping European policy for years and decades to come’, Josep Borrell, the EU Commission’s Foreign Policy Chief told the European Parliament, soon after the invasion.1
In the Versailles Declaration, issued a few days later, the 27 member states spoke with a unanimity which is rare on issues as sensitive as the situation at hand. They vowed to ‘resolutely invest more and better in defence capabilities’ and agreed to ‘increase substantially defence expenditures’.
A common defence policy has always seemed a distant project for the EU, as it raises questions of national sovereignty that member states have preferred to avoid discussing. It has also been viewed as a potential act of disloyalty to NATO and the US. It is even written into the current Treaty on European Union that the regular EU budget should not be used to pay for ‘operations having military or defence implications’.
Instead, 21 EU member states belong to NATO, with each regarding membership as a cornerstone of its national defence policy. In 2001 relations between the EU and NATO were formalized, with the definition of the scope of co-operation leading to the formation of a strategic partnership.2 But European confidence in the alliance was shaken by the Trump presidency in the US. With his doctrine of ‘America First’ and insistence that European states should do more to strengthen their own defence capabilities, the alliance started to look somewhat less secure. Trump was no big fan of NATO, and had previously spooked European allies when he described the organization as ‘obsolete’.
Very few NATO members meet their target of spending two per cent or more of their gross domestic product (GDP) on defence. But this appears to be changing following Russia’s invasion of Ukraine in February: Germany made the surprise announcement that its government was adding an extra €100 billion (around $109 billion) to its defence budget, bumping it up to the NATO goal from its previous 1.5 per cent of GDP.3
Big spenders
The war in Ukraine has accelerated the European Union along a trajectory of militarization that it was already following, and Russia’s actions were already causing alarm within the union even before the February 2022 invasion. The 2014 annexation of Crimea triggered an increased investment in defence and security across member states. This now stands at €186 billion, its highest for 15 years.4
In 2015, the EU Commission established a ‘High Level Group of Personalities on Defence Research’ (GoP), made up of CEOs and thinktank bosses, to provide strategic input for European’s security and defence policy. Of the 16 members that made up the GoP, seven were from defence companies, another two from defence-related research institutes. There were no representatives from civil society.
The group called for the EU ‘to strengthen Europe’s overall military posture’ and said that this should be backed-up with ‘a total budget of at least €3.5 billion’.5 The European Defence Action Plan, published in 2016, drew heavily on the recommendations of the GoP.6
Following on from this the Commission proposed establishing a ‘European Defence Fund’ (EDF). To circumvent the ban on military funding through the common budget it declared the project as ‘promoting a better use of industrial potential’ under Article 173 of the EU Treaty.
By 2020 just €590 million ($641 million) had been diverted from the regular research budget to that for weapons development.7 For the budget period until the end of 2027, which included the establishment of the EDF, it had grown to €8 billion.8
In 2017, EU states founded the Permanent Structured Cooperation (PESCO) organization, which, according to its website, ‘helps member states to jointly plan, develop and invest in shared capability projects’. These projects include developing a joint radio system, a combat helicopter and a combat drone, with costs that run into tens of billions of dollars. But the exact amount of taxpayers’ money spent is not publicly known, as the companies involved bill the national governments directly.
The European Peace Facility (EPF), set-up in 2021, is another off-budget financing instrument. Through this, EU states jointly subsidize the export of armaments and provide training for foreign troops. In March the Council announced that the EU would give $1 billion under the EPF to ‘further support the capabilities and resilience of the Ukrainian Armed Forces’.9
Outside influence
It is questionable whether all these billions will equate to greater security for Europe’s citizens. Simply increasing the money spent on defence using off-budget mechanisms side-tracks issues of sovereignty, and results in less transparency – and therefore less scrutiny. But to address this means facing up to the recurring dilemma of the construction of the EU; that security, unlike say regulating the economy or the protection of the environment, requires the approval of all 27 national governments – all with highly divergent interests.
There is also the issue of arms exports, which are driven firmly by national interests. In the tensions in the Aegean Sea between Greece and Turkey, for example, France sells arms to Greece, while Germany equips the Turkish army. Both Greece and Turkey are members of NATO. But as data from the Stockholm International Peace Research Institute (SIPRI) shows, this does not stop any country selling to both sides: Germany was also the main supplier to Greece.10
This leaves Europe’s common defence policy trapped in a grey zone, away from parliamentary control and vulnerable to lobbyists and pressure from industry. ‘It is clear that with the war in Ukraine, defence matters have risen to the top of the political agenda,’ European Ombudsman Emily O’Reilly told us. ‘People will want to know exactly what the EU is doing in this area – how money is being spent, what kind of projects are foreseen, and how policy is changing.’
The EU Commission rejected all of Investigate Europe’s questions, including over the membership of the bodies which decide on armament projects. A spokesperson argued that secrecy was necessary because otherwise those involved could ‘be put under pressure from outside’.
Europe is in the process of building a defence policy, but the people who should democratically be debating this process – the elected representatives – have been sidelined from the main discussions. ‘This is the problem. We, the European Parliament, are deliberately shut out of these decisions,’ states Hannah Neumann, a German Greens MEP in the Subcommittee on Security and Defence. ‘Most of this happens in secrecy behind closed doors.’
There is the risk that a lack of openness leaves the decision-making process vulnerable to influence from the arms industry, who have much to gain from a militarized EU and could distort policy and public debate.
‘We have to make sure that the EU and administrations are not influenced by the commercial considerations of private interests, as opposed to the public interest,’ O’Reilly says, ‘and that is why there is a very important need for democratic oversight, and particularly for transparency.’
And there could be cause for concern. Investigate Europe’s analysis of EU defence fund data for 2019 and 2020 found that defence giants from France, Germany, Italy and Spain have been awarded the lion’s share of the funding.
Of the 302 companies that received funding from the European Defence Industrial Development Programme (EDIDP), just five companies – Airbus, Leonardo, Dassault, Thales and Indra Sistemas – together received €398 million ($432 million) from the €480 million ($521 million) pot.
This is funding that will determine the technology governments will be committed to for decades to come. That will require, according to the EU Commission: ‘substantial co-financing by the member states as well as the intention to jointly acquire the developed product’ (the weapons or technology). EU funding for the European Defence Fund – the big money pot worth billions, has been agreed for the 2021-2027 period.
Added to this, the four big states – France, Germany, Italy and Spain – are shareholders in the complicated web of the European military industry. For example, Thales, a French company is nearly 26 per cent owned by the French state; Airbus benefits from a consortium of French, German and Spanish state funding; and the Italian state is the big shareholder in Leonardo.
When the representatives of the national governments decide on the allocation of EU funds, ‘the lobbyist for the industry sits right at the table’
Airbus owns part of Dassault, which owns part of Thales, which owns parts of other companies (eg Edisoft in Portugal or Naval Group in France) or partners with Leonardo (which co-owns Hensoldt, in Germany) to control others (eg Telespazio and Elettronica). The big players have a lot of power. When the representatives of the national governments decide on the allocation of EU funds, ‘the lobbyist for the industry sits right at the table’, explains Hannah Neumann.
‘The power to exercise coercion’
This domination of Europe’s defence sector is a concern for Matt Stoller, the director of research at the American Economic Liberties Project. ‘Generally speaking the more consolidated the defence sector, the less innovation and worse pricing there is for governments,’ he said.
It also raises the risk of corruption ‘since lobbying over huge sums of money has such a high return’. He explains: ‘With a lot of independent competitors vying for business, the risk of corruption goes way down. If there is a small club of insiders, whether through overlapping ownership stakes or common ownership or just not having very many contractors, then the risk goes up.’
Danish politician and European Commissioner Margrethe Vestager’s office did not respond to a request for comment about this risk. Commission sources explained that although they are aware that ‘certain defence markets are highly concentrated’, they can only act if ‘there is evidence of anti-competitive conduct’.
With its current programmes and institutions alone, as well as the reliance on off-budget mechanisms, the EU will not become a military power in itself. But recent events are forcing a reconsideration of its role. ‘We must become a hard power,’ former President of the European Parliament Josep Borrell recently implored. ‘Hard power,’ he explained, ‘means having the power to exercise coercion. We must prepare to resist and to act.’
The EU’s recent adoption of the Strategic Compass policy document (which has been almost two years in the making) has been seen as the first step towards the goal expressed by Borrell. The initially cautious wording to bring the 27-member states together in a joint security policy, has, in the face of war, become a decision to make the EU truly capable of defence. ‘The more hostile security environment requires us to make a quantum leap forward and increase our capacity and willingness to act, strengthen our resilience, and invest more and better in our defence capabilities,’ the Commission explained in a press release.
But it is unlikely a common EU army will emerge from this any time soon. Unity in the face of an aggressor is one thing, but the different geopolitical priorities of member states will likely leave any harder push for a common policy floundering. Meanwhile, as money is moved to off-budget funds with limited oversight, it is the arms companies that have most to gain.
As Javier Solana, former head of NATO told Investigate Europe: ‘I don’t think we need more institutions or new bodies to unite Europeans. All we need is the goodwill of both organizations – NATO and the EU – to try to complement each other and to act as constructively as possible.’ Whether that is likely to happen is anyone’s guess.
- European Parliament, ‘War in Ukraine: MEPs outline their vision for Europe’s future security’, 9 March 2022, nin.tl/EU-debate
- NATO, ‘The NATO-EU Strategic Partnership’, nin.tl/partnership
- Peter Hille and Nina Werkhäuser, ‘Germany’s army: Will €100 billion make it strong?’, Deutsche Welle, 3 March 2022, nin.tl/Germany-army
- European Defence Agency, ‘European defence spending hit new high in 2019’, 28 January 2021, nin.tl/Europe-spending
- European Union Institute for Security Studies, European Defence Research, February 2016, nin.tl/defence-research
- European Commission, European Defence Action Plan, 30 November 2016, nin.tl/action-plan
- Komisja Europejska, ‘The European Defence Fund: Questions and Answers’, 7 June 2017, nin.tl/EDF-questions
- European Commission, ‘The European Defence Fund (EDF)’, nin.tl/EDF
- Council of the EU, ‘EU support to Ukraine: Council doubles funding under the European Peace Facility’, 23 March 2022, nin.tl/EU-Ukraine
- SIPRI Military Expenditure Database, Stockholm International Peace Research Institute, sipri.org/databases/milex
