EU Initiatives Could Bolster European Defense Post-COVID

Tony Osborne July 10, 2020

Over the last six years, an alphabet soup of defense initiatives has emerged from European leadership in Brussels.

These European mechanisms for defense cooperation may have been slow to gain traction, but they are encouraging more pooling and sharing of assets, bolstering research and development funding, encouraging nations with similar requirements to work together and most of all, helping nations avoid repeating the mistakes governments made in the aftermath of the 2008 global financial crisis.

• The EU is mulling over third-nation access to PESCO and EDF
• European defense took a decade to recover from 2008 financial downturn
• NATO nations are concerned about a second Trump administration

And soon they could help Europe's embattled defense industrial base bounce back, once the dust from the novel coronavirus pandemic has settled.

Agencies such as the European Defense Agency (EDA) and initiatives such as the European Defense Fund (EDF), Permanent Structured Cooperation (PESCO), Preparatory Action on Defense Research (PADR) and the European Defense Industrial Development Program (EDIDP) have emerged from the European Union (EU) and European Commission's (EC) call for EU member states to take more care of their own security and be less reliant on the U.S.

The initiatives are leading to new partnerships that would have been unlikely in the past, aiming to fill capability gaps that no single European nation alone could have achieved.

The big question is whether governments can overcome nationalist tendencies and be more willing to cooperate. And if so, will the projects produce something tangible?

European defense cooperation has existed in different forms for decades, through development of the Panavia Tornado by Germany, Italy and the UK; the Franco-German work on the C-160 Transall airlifter; and the MBDA Meteor missile shared between Germany, Italy, France, Sweden and the UK.

The difference this time is that such relationships were forged by national governments, but the new wave of cooperation is being stimulated centrally with EU and EC money, to improve coordination between the nations in an attempt to change the perception that such collaborations can sometimes cost more overall. The joint efforts are now being applied to a multiplicity of programs, large and small, and not just to those considered unwieldy or complex.

Consider the creation of the Multinational Multirole Tanker Transport (MRTT) Unit, which will see six nations—Belgium, the Czech Republic, Germany, Luxembourg, the Netherlands and Norway—jointly operating a fleet of Airbus A330 MRTT refueling tankers. More than eight years in the making, the pooling and sharing initiative emerged from the EDA and boosts the number of aerial refueling tankers available to European nations, with governments paying for flight hours on an annual basis. The first of the tankers was delivered to the Netherlands in early July.

There has been cooperation in demonstrations of unmanned systems and sensor technology for increased maritime awareness through the Ocean2020 project, a PADR initiative, and with enhanced airlifter and helicopter training through a series of EDA-arranged training exercises (AW&ST July 20-Aug. 2, 2015, p. 63).

The push for deeper European defense cooperation emerged in the years after the deep post-2008 economic downturn that prompted many European governments to adopt austerity budgets, introducing sweeping cuts to public spending that sharply curtailed capability. Budgets in some of the smaller nations were reduced by as much as 30%, according to research by the German Council on Foreign Relations. Overall, about €24 billion ($27 billion)—equivalent to around 11% of Europe's total defense spending—was cut in the years following 2008.

“It took until [2019] for defense spending [by] NATO's European members to recover in constant dollar terms back to the level where it was when that 2008 financial crisis hit,” Bastian Giegerich, director of defense and military analysis at the London-based International Institute for Strategic Studies, tells Aviation Week.

When allied air forces began flying missions over Libya in 2011, they lacked aerial refueling, electronic-warfare and intelligence, surveillance and reconnaissance capabilities to find targets, and ended up relying heavily on U.S. assets that Washington had been reluctant to provide.

The lessons only began being heeded when the European security situation deteriorated rapidly.

The Arab Spring, which had caused the collapse of the Muammar Ghaddifi government in Libya and was continuing to ripple through North Africa and the Middle East causing instability on the edges of the Mediterranean, was quickly followed in 2014 by the Russian--backed insurrection in Eastern Ukraine and Moscow's annexation of Crimea.

“This succession of events really highlighted to European leaders that they needed to get their act together,” says Daniel Fiott, security and defense editor at the EU Institute for Security Studies.

As treasuries across Europe began to trickle money back into defense budgets, further alarm was generated by the rhetoric of U.S. President Donald Trump, who having berated several NATO members for not meeting the alliance's defense spending target of 2% of GDP, single-handedly “undermined alliance cohesion and coherence,” says Giegerich. Trump raised doubts about the U.S. commitment to NATO's Article 5, which states that an attack on one ally is an attack on all. That shock, “and the possibility that if Trump is reelected [this November] . . . he could do something radical within NATO,” has prompted a continued drive to modernize European capabilities, suggests Fiott.

Britain's departure from the European Union provided the EU and EC with the impetus for reinforced defense cooperation; London had long resisted such attempts.

“The UK line was always that the EU shouldn't try and develop certain mechanisms or capacities that they would see as potentially duplicating NATO,” says Fiott.

In the fall of 2016, European Commission President Jean-Claude Juncker told EU member states that Europe needed to “toughen up” and not “piggyback on the military might of others.”

He added: “We have to take responsibility for protecting our interests and the European way of life.”

According to the EC, the lack of defense cooperation between member states costs between €25-100 billion because of issues such as duplication of effort. It also notes that 80% of procurement and 90% of research and technology are run on a solely national basis. The EC claims that enhanced cooperation between member states could reduce annual defense expenditures across Europe by 30% through pooling procurement.

Junker's words were followed up a year later with the EC's formation of the European Defense Fund for joint research and development of defense projects.

The EDF was set up to incentivize joint development projects and provide co-financing if several member nations bulk-buy capabilities between them. This was preceded by the PADR and the EDIDP, a series of preparatory programs paving the way for the EDF (AW&ST June 12-25, 2017, p. 28).

“[The] PADR and EDIDP test the way the institutions and the funding mechanisms work and help to generate some buzz in industry,” says Fiott.

These programs began to deliver benefits in June, when the EC announced €205 million of funding to support 16 PADR and EDIDP initiatives. Projects including the development of a low-observable tactical unmanned aircraft system, research into high-resolution observation payloads for satellites, and studies for a beyond-visual-line-of-sight land-based battlefield missile system have been funded, a steppingstone toward creation of the EDF.

Direct support is also envisaged for two large-scale projects, including the EuroDrone medium-altitude long-endurance aircraft system being developed by France, Germany, Italy and Spain and for the European Secure Software-Defined Radio (ESSOR) program.

Some of the PADR and EDIDP initiatives are linked to the other major initiative, PESCO.

Run by the European Defense Agency and the EU's External Action Service, PESCO calls on Euro-pean member states to make binding commitments to invest in and develop defense capabilities. PESCO projects are likely to receive funding from the EDF. There are currently some 47 PESCO projects supported by 25 member states.

Several of the projects are aerospace-related programs. One is the Timely Warning and Interception with Space-based TheatER surveillance program (Twister)—led by France and supported by Finland, Italy, the Netherlands and Spain—to develop a capability to track and counter emerging threats, including hypersonic gliders and supersonic cruise missiles. Another, Airborne Electronic Attack, led by Spain with support from France and Sweden, calls for the joint development of a pod-mounted electronic attack and countermeasure capability for combat aircraft. PESCO programs are also focused on training, joint forces activity and cyberwarfare.

There are, however, debates as to whether the PESCO initiatives will deliver new capabilities. Some are seen as vanity programs, others may merely be national programs for which some nations have roped in other partners in a bid to secure funding. A review of the PESCO projects is currently underway.

“We can't prove that cooperation delivers anything, and we don't know the criteria for having good cooperation and for having bad cooperation,” says Christian Molling, research director for the German Council on Foreign Relations.

PESCO has also ruffled feathers. Last year, Pentagon procurement officials wrote to the EU threatening to apply sanctions, incorrectly assuming that PESCO initiatives would prevent U.S. industry from pursuing business in Europe. The EU is currently exploring whether third nations—non-EU nations—can access PESCO and EDF initiatives. Initial proposals to allow third-nation access have been received favorably by some member states, but the discussions are bound up in deliberations about the next EU budget.

The U.S. may have been alarmed at the longer-term goals of EDF and PESCO, which by providing political and financial incentives boost productivity, innovation and the competitiveness of the European defense industrial sector. “[It] strengthens the argument to buy European and do things together,” says Giegerich.

“That is a long-range threat . . . that may explain why the U.S. administration had such an allergic reaction to the EDF and PESCO last year,” he adds.

EU and EC-led plans are not the only cooperative initiatives taking place. Two new combat aircraft programs have taken shape over the last three years, linking unlikely bedfellows with very different views on defense. France, Germany, and Spain are working on the Future Combat Air System (FCAS), while the UK is leading its Tempest project with Italy and Sweden.

Such flagship programs could have “a structuring effect on defense industrial capability in Europe for the next couple of decades,” says Giegerich. The nations will have to reconcile their differences, though France and Germany, the leading nations on FCAS, have markedly different approaches to defense exports, doctrine and deterrence.

Hopes from industry that the two projects could be combined may be wishful thinking. There may be only a short window of opportunity for that to happen, perhaps 18-24 months, suggests Giegerich, before too many decisions on each of the projects are finalized. FCAS was born out of French and German ambitions to become pillars of European defense. With the entrance of Spain into the initiative, the program is likely to be eligible for support from the EDF in the future.

It is conceivable that Tempest could benefit from such funding in the future, too, if the EC allows so-called third nations.

How defense cooperation evolves is likely to depend on how nations emerge from the COVID-19 pandemic and whether they choose to make cuts to defense, taking an austerity approach as in 2008, or to reinvigorate their economies with fiscal stimulus. The arguments for such cuts will be challenged in the current environment, suggests Giegerich. “While COVID is obviously a massive interruption to [European government] plans, none of the security problems that existed before have gone away,” he notes.

In May, the defense ministers of the four major EU states—France, Germany, Italy and Spain—wrote to European leaders urging their nations to strengthen cooperation through efforts such as PESCO.

“Security and Defense must therefore remain a top priority,” the letter states. “We want to live up to our responsibilities and be able to face present and upcoming challenges, at home and abroad. . . . Hence, we have to maintain, strengthen and develop our ability to act and react autonomously, as a Union.”

The crisis has prompted governments to sit up and look at their strategic capabilities, critical industries and security of supply, says Fiott, and may prompt some nations to look closer to home again for their defense relationships.

“The U.S. will always be a go-to player when it comes to certain capabilities,” says Fiott. “Dealing with the U.S. on one hand is really good. You get access to high-tech equipment and you can use it to undergird your defense relationship.”

But buying from the U.S. means countries are exposed to the full force of U.S. legislative power.

“You can't have any kind of autonomy in defense if ultimately Washington is able to veto you, the use of capabilities or even the exploitation of technology,” Fiott says. “That's certainly an issue that [European] governments are thinking about.”

Another concern is that a deep economic recession in the U.S. could prompt Washington to reconsider its posture in Europe and speed up its repivot to China. U.S. plans to withdraw some 9,000 troops from Germany has sent ripples through NATO.

The post-COVID-19 era could also provide an opportunity to put European defense mechanisms to good use. Reports that the EDF budget would be slashed as a result of the coronavirus crisis have proved unfounded. The EC plans to invest €9 billion in the EDF over the next seven years, down from the originally planned €13 billion, although this is still subject to approvals by EU member states.

“There is now a time to make that argument that the EDF and the European military mobility initiatives should be fully funded and should perhaps even be beefed up compared to original plans,” says Giegerich. “The ball is now in the court of the EU member states.”

“We are really fortunate in having already a lot of initiatives in place,” says Fiott. “It is not like we have to waste the next two, three, four years dreaming up new schemes.”

https://aviationweek.com/defense-space/eu-initiatives-could-bolster-european-defense-post-covid