The European Commission this week has loudly presented its renewed proposal for a new 7-year EU budget and a EUR 750 billion EU economic rescue plan. It aims to pull the EU out of the COVID-19 economic crisis, strengthen the EU’s future resilience, and deepen solidarity and political integration of the EU. Unfortunately, defence, which is one of the ‘new priorities of the EU’, in the context of today’s challenges, is being pushed into the background.
Over the last few years, the EU has taken several new steps in the field of defence. The format of closer cooperation (PESCO) was activated; the participating states made specific commitments in the field of defence and initiated a number of new projects (one of them is the creation of the Cyber Rapid Response Force led by Lithuania). An agreement was reached to establish a European Defence Fund to co-finance multinational capability development and research projects in the field of defence, and the first small-scale projects have already received EU funding.
The EU has increasingly focused on hybrid threats. We started talking about the EU’s readiness to contribute financially to the challenges of military mobility in Europe and, more generally, the area of defence has been declared as one of the priorities in the EU’s new multiannual financial framework. All this coincided with the growing national defence budgets of the EU Member States, which rightly increased the optimism that the EU had healthy ambitions in the area of security and defence and that it could become a serious partner to NATO, a real transatlantic security pillar that would share burdens and commitments with the US. There have been signs eventually that the EU will finally move from political declarations in the field of defence to real investment.
However, looking to the future, the sky over the EU’s defence ambitions seems to be darkening again. Today, mainly defence is one of the areas most likely to be affected while the EU Member States are coping with economic challenges related to COVID-19.
In many EU countries, defence funding is likely to shrink. This may not be visible in the short term, as defence budgets may even increase as a percentage of GDP after its substantial drop. However, it is clear that defence will be less prominent on the national agenda in the coming years. That would be a mistake, because COVID-19 only highlighted new security threats, while the old ones have not disappeared anywhere. It is also important to understand this when discussing and making decisions in Lithuania.
The main test for the EU’s ambitions in the field of defence is the negotiations on the new financial framework, with nearly EUR 30 billion planned for defence in the original proposal of the European Commission. Long before the COVID-19 crisis, there were many signs already that this amount could shrink. In the face of the economic crisis, countries’ appetite for channelling EU budget funds into the area of defence has decreased even further. In the latest proposal from the European Commission, only around EUR 15 billion is foreseen for defence, of which only EUR 1.5 billion would be allocated for military mobility (although the initial proposal was EUR 6.5 billion, and the needs of the states sometimes exceed this figure several times).
While discussions in the EU reflect national priorities, it is difficult for the defence to compete with, for example, cohesion or agriculture. It remains to be hoped that in the hot negotiations between the leaders of the states this summer, someone will pay attention to defence financing issues. Among the countries that could do that, I would like to see Lithuania as well. After all, increased funding for military mobility is clearly in the interests of Lithuania’s security.
The tensions related to defence financing not only raise questions about the persistence of EU defence ambitions but also call into consideration the long-term consequences for Europe’s defence capabilities. Less money for military mobility projects would result in the poorer infrastructure of the EU countries and slower arrival of partners’ military support, which is of particular importance for the Baltic States. Less money for joint programmes would result in weaker EU defence industry and fewer projects that could turn into new capabilities. Less money for military operations and partner support would mean a weaker voice of the EU in the world and more crises in the neighbourhood. As national defence funding is also likely to decrease, nothing will compensate for the lack of EU investment. It is evident that the negative impact would be felt not only by the EU but also by NATO, whose capacity also depends on the contribution of the EU Member States.
The question to conclude is how to mitigate the negative impact of COVID-19 on EU defence? Firstly, in the short term, all efforts must focus on the negotiations on the EU’s multiannual financial framework; and there is still time to expand and strengthen the coalition of states that would oppose the reduction of defence funding, especially in the area of military mobility. It is important to do this at the highest political level.
This is not only an issue of investment but also a symbolic issue because military mobility is the best litmus paper, showing how seriously the EU takes defence and how much the EU can contribute to NATO’s efforts. Secondly, with defence funding declining in Europe, EU defence initiatives will inevitably have to become more open to transatlantic partners. The US has pursued this from the outset by rightly criticising the rules of the European Defence Fund that restrict the participation of third-country companies or by calling for a quicker agreement on the inclusion of third states (allies) in PESCO projects.
In both cases, Lithuania and other transatlantic EU Member States have done a great deal in the negotiations, but they have not achieved the final result. The economic situation affected by COVID-19 should thus provide a new impetus to resolve these issues for the finally
benefit of transatlantic cooperation.
