The European Defense Fund: A Start but Read the Small Print

After the past month of contention over the shortfall by the NATO European allies, and particularly Germany, on the now well-known NATO guideline to spend a “minimum of 2% of their Gross Domestic Product (GDP) on defense…[and] aim to move towards the 2% guideline within a decade with a view to meeting their NATO Capability Targets and filling NATO’s capability shortfalls,”[1] headlines last week by the European Union (EU) heralding a European Defense Fund of $5.5 billion caught attention. This will be the first time the EU will fund defense from its budget.[2]  However, the small print reveals that the $5.5 billion is several years off and dependent on member states’ commitment to the effort.

Aimed at achieving greater value for its high-tech systems both in collaborative research and in development and acquisition, the rollout of the fund highlighted the potential financial gains to be achieved. But will the fund be a springboard to greater cooperation in the security arena or simply more cover for a reluctance to meet the security needs today for European defense and its challenges? While the launch employs impressive language for greater attention to the security needs of the EU, it can be expected to fall far short of the security challenges it purports to address.

The goal for a €5.5 billion ($6.2 billion) fund after 2020 is impressive: to reduce duplication in European systems, encourage collaboration and cooperation, and thereby reduce multiple defense system spending. However, an expenditure of €90 million to 2019 is nothing short of modest and dependent on member states’ cooperating on joint project proposals—three companies and two EU members are required. Not only is EU28 spending half that of the U.S. (€227 to €545 billion), there are 178 EU weapon systems to 30 systems in the U.S. that the report itself describes as highly inefficient. A striking example is the fact that the EU produces 17 separate battle tanks to the U.S.’ one, 29 destroyers and frigates to the U.S.’ 4, and 20 fighter planes to the U.S.’ 6, among other inefficiencies in the European defense armaments field.

Furthermore, the EU Commission estimates that less than 3 percent of European troops are deployable (40,000) compared to the U.S.’ 190,000.  While duplication and lack of interoperability on the part of the EU have improved, significant gaps remain striking. With the large differential in systems from country to country and member states buying on their national markets (as much as 80 percent of national purchases), a big part of the problem, as acknowledged by the EU, is inefficiencies. The question remains, will European members be willing to shift away from those national markets?

Despite high level backing from Commission President Juncker last fall and support from the European Council in December and again this March, greater EU member state commitment will be needed to achieve the high goals laid out by the fund. Not only is it being viewed as reinforcing the EU Global Strategy for Foreign and Security Policy released last year, the EU considers it a backing for the EU Commission’s 2017 White Paper on the Future of Europe in March. Calling the European Defense Fund ambitious in the European Commission press release, it also concludes that the EDF can quickly become “the engine powering the development of the European Security and Defense Union that citizens expect.”[3] Whether member states will step forward to propose and fund the projects necessary and relinquish a slice of sovereignty for true development of a Security and Defense Union has yet to be demonstrated. Moving forward, whether its citizens will agree to a truly operational Security and Defense Union and the necessary funding is yet another question.

[1] Wales Summit Declaration, 5 September 2014, http://www.nato.int/cps/en/natohq/official_texts_112964.htm#adaptation. See paragraph 14.

[2] Sophia Besch, “Is the new European Fund a Game-Changer for EU Defense?” AskCER, Centre for European Reform, London, 7 June 2017.

[3] “A European Defence Fund: €5.5 billion per year to boost Europe’s defence capabilities,” European Commission Press Release, 7 June 2017, http://europa.eu/rapid/press-release_IP-17-1508_en.htm

The views expressed are those of the author(s) alone. They do not necessarily reflect the views of the American Institute for Contemporary German Studies.

Gale Mattox

Senior Fellow; Director, Foreign & Domestic Policy Program

Dr. Gale A. Mattox is Director of the Foreign & Domestic Policy Program at AICGS and a Professor in the Political Science Department at the U.S. Naval Academy. She is a former elected department chair and chair of chairs, and was awarded the Distinguished Fulbright-Dow Research Chair at the Roosevelt Center, the Netherlands, for spring 2009. Dr. Mattox served on the Policy Planning Staff of the Department of State, was a Council on Foreign Relations Fellow at the State Department Office of Strategic and Theater Nuclear Policy, and an International Affairs Analyst at the Congressional Research Service.

She has been a Bosch Fellow in Germany (also Founding President of the Bosch Alumni Association), NATO Research Fellow, and a Fulbright Scholar. Dr. Mattox has held the offices of President (1996-2003) and Vice President of Women in International Security (WIIS), Center for Peace and Security Studies at Georgetown University, and served as Vice President of the International Studies Association and now co-chair of the ISA Women’s Caucus.

She has served on numerous boards, including the Tactical Advisory Council, Center for Naval Analysis, and the George Marshall Center Advisory Board in Germany, and now serves on the advisory boards of St. Mary’s College Women’s Center, the Forum for Security Studies, the Swedish National Defense University, and WIIS. Dr. Mattox published, with A. Rachwald, Enlarging NATO: The National Debates, and Evolving European Defense Policies with C. Kelleher. She is the co-editor of Germany in Transition, Germany at the Crossroads, and Germany Through American Eyes, and has published widely in scholarly journals. She holds numerous awards and has appeared on the Lehrer News Hour and other media outlets.

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mattox@usna.edu