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,” 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. 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.” 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.
 Wales Summit Declaration, 5 September 2014, http://www.nato.int/cps/en/natohq/official_texts_112964.htm#adaptation. See paragraph 14.
 Sophia Besch, “Is the new European Fund a Game-Changer for EU Defense?” AskCER, Centre for European Reform, London, 7 June 2017.
 “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