NATO defense investment official talks European security and artificial intelligence

By: Sebastian Sprenger

BERLIN — As the European Union positions itself to become a defense force in its own right, some in Washington have wondered if such moves would weaken NATO as the dominant trans-Atlantic security pact. Alliance leaders, including Camille Grand, who serves as NATO's assistant secretary general for defense investment, have defended EU efforts, arguing something good will come out of it if both organizations manage to cooperate.

Grand sat down with Defense News Europe Editor Sebastian Sprenger during the NATO-Industry Forum in Berlin in November to discuss the state of play between the EU and NATO, defense spending by allies, and new technologies on the horizon.

NATO Secretary General Jens Stoltenberg has said the alliance can benefit from the European Union's newfound interest in all things defense. How so?

It can be fruitful for both organizations as long as we work well together. Of course it is good news to see the European Union as a more active player in the field of defense, provided that we operate in an environment where we avoid competing guidance to the member states and the allies, especially those who are members of both organizations, and provided that the EU effort strengthens trans-Atlantic security by enabling the European allies to acquire capabilities earlier or faster or in a more efficient way.

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We have a number of areas of cooperation between the EU and NATO, including in the field of capability development. Could things be better? Yes, probably, for example in terms of interaction between both organizations and fostering transparency, access to relevant documents, and so forth. Ultimately, I think the issue is whether the European effort can be a good contribution to a broader burden-sharing effort. But I think we also have to keep in mind that the effort in the field of defense remains primarily with nations.

There is still a sizable trans-Atlantic imbalance as it pertains to the size of the defense-industrial base. Is that detrimental in the long run?

The situation is relatively well-known. The defense market in North America, and especially in the United States, is larger than in Europe. There is an imbalance in defense spending; that's the whole point about the defense investment pledge, to partially correct that and having European members invest more in defense.

Beyond that, the consolidation of defense industries took place in the United States earlier. In Europe it is still a process that is underway. There are still many companies competing for all sorts of markets. We have a fragmented demand and a fragmented supply, if you will. The issue is not to end up with a single company in Europe or in the U.S.; I think competition is healthy. The issue is: Can we tackle the issue of fragmentation in a European market? As seen from NATO, we don't really do industrial policy, per se. That's really a European Commission perspective. If it enables Europeans to be more efficient in delivering the capabilities we all need in the alliance, that can be good news.

What do you expect to come out of industry consolidation in Europe?

First of all, I think it has to be a business-driven process, primarily. It's not for organizations such as the EU or NATO to decide. I think what is true is that we see repeatedly cases of where there are a very large number of types of equipment in the same category available. There are a number of medium and small players in Europe that are part of the defense equation, and the defense industry is something where states look carefully at preserving some national capacity. The issue is: Should that organization evolve over time into a slightly more consolidated market? For me, the key criteria is to promote opportunities for multinational cooperations, which is something that we do both at NATO and the EU. It's very important that allies who are EU member states, when they are in a position to do so, decide to go for multinational solutions — with or without a single industrial champion.

The European NATO members have pledge to spend more on defense. How does that manifest itself from where you sit?

First of all, they are indeed spending more on defense. The increase in defense spending for this year is expected to be more than 5 percent for Europe and Canada. It's a complete overturn from the previous 25 years. We are now in the fourth year in a row of increasing defense spending. This is starting to make a real difference. In the last couple of years, Europe and Canada have spent €36 billion (U.S. $27 billion) more on defense than they had done previously. This starts being real money. It enables us to do three things: First of all, to fill some of the very serious gaps that we have — whether in ammunition or spare parts, for example. Secondly, to reinvest in building up capabilities for identified shortfalls, for example air-to-air refueling, anti-submarine warfare, all sorts of domains. Thirdly, to invest in defense for innovation. For example, take a deeper look at disruptive technologies, 21st century technologies.

From where I sit, I can see two things. First of all, the NATO defense-planning targets have been apportioned by all allies. It's the first time in history that all allies have agreed to deliver what they are being asked. Secondly, all allies have agreed to keep increasing their defense spending. We might see nuances in terms of when they intend to reach 2 percent of GDP, which has partly to do with the politics in each country. But I think the political commitment is very strong and was strengthened by the Brussels summit in many ways. There is more money coming, and that creates more opportunities not only for new capabilities but also more cooperation. I think altogether, we have a dynamic that is very positive.

Ultimately it makes a difference. People were always pointing at the fact that the Russian Federation had tripled its defense budget over the previous decade. Without trying to match that in any shape or form into an arms race, we also have seen now that reinvesting massively in defense, as the Russian Federation has done, has given Moscow more ability to act in the Middle East, to modernize its conventional and nuclear forces, and so on and so forth. The notion that investing in defense doesn't make a difference is wrong.

What are the top three of four areas that need more investment for NATO?

One that we are focusing on is the joint intelligence, surveillance and reconnaissance domain. This is something where modern warfare requires us to have an edge. Then also I would emphasize mobility, both tactical and strategic. All of our missions require the alliance to be very mobile and be able to forward-deploy quite quickly. I would also cite integrated air and missile defense as a domain of focus. And lastly, the maritime domain, especially anti-submarine warfare.

But those are only examples. We are in the process of designing NATO for the 21st century, which needs to be more agile and regain a degree of robustness that we didn't necessarily anticipate 10 years ago when we were working on the assumption that the primary objective of NATO would be to have light, deployable forces to go out of area. I could have mentioned cyber, of course, as a priority. I didn't mention it because while it is obviously a major, major domain for building our capabilities on, it is probably not as cash-intensive as others.

The Germans seems to be perpetually moving toward 2 percent of GDP on defense, as opposed to saying when they will reach it. Is that enough? Is the GDP-percentage metric suitable for defense contributions?

First of all, Germany has turned a corner on defense spending. I would note that Germany has a commitment to move to 1.5 percent, which is significant. Is this enough? Probably not. And Germany should meet its political commitment like other allies and aim towards moving as quickly as possible to the 2 percent objective. Having said this, 2 percent is a figure that is quite reasonable. The Cold War figure for Germany was more in the 3 percent realm. The notion that 2 percent would be a massive and disruptive number doesn't seem to me quite convincing.

The second argument that I sometimes hear in the wealthy European countries is that 2 percent when you're rich is much more difficult to achieve. I could exactly reverse that argument, saying 2 percent when you're poor is much more difficult to achieve because then you're competing with much more immediate, existential needs in terms of infrastructure, education and so on.

From that perspective, the good news with the 2 percent concept is that the burden is the same for everyone. Of course, with Germany being the largest economy in Europe, a lot of effort tends to be indeed with Germany. Germany already has demonstrated a willingness to move significantly in this direction, and there are high expectations that it will continue down that route and meet the target. I honestly think it's both doable and manageable. But then, of course, that doesn't happen overnight.

Are NATO and the EU on the same page when it comes to modernizing the members' combat aircraft fleets, especially in Europe?

I wouldn't say there is a NATO-EU competition or disagreement over that because, first of all, NATO doesn't take sides in terms of choosing equipment. NATO identified the need to modernize and keep an effective air force. And then each ally can decided which way they want to go. Some of them, quite a number now, have decided to go for the F-35 solution. On the other hand, other allies have either recently acquired planes that are quite modern — whether it's the Eurofighter or the Rafale — or are projecting to build together — as the French and the Germans [are] — the next generation of aircraft. Britain is also contemplating its own. From a NATO perspective, I think it's fair to say that we recognize every ally's right to pursue what they think is the best approach to address a capability challenge.

The European Union is pursuing a slightly different perspective because the EU does have a dimension in terms of industrial policy and research policy where they can see benefits in supporting technological development in Europe.

The United States, Russia and China are spending significant amounts of money on artificial intelligence research and development. Where does NATO as a whole stand on investments in this area?

We have to look very seriously, as NATO allies, at the latest generation of disruptive technologies. And artificial intelligence is one of them. There is a major challenge coming from other major powers, starting with China. The United States is already well into it, Europe is starting to do that. I would nevertheless put AI in the broader context of new and disruptive technologies because I think it's one of them. And AI can also probably bring a lot to our intelligence efforts. But I would put it in the broader context of all sorts of technology revolutions underway. And maybe sometimes we over-focus on AI only, as if it was the single game changer. Nobody has fully assessed how much it's going to change the way we do military operations. Is AI going to be a tool to assist in decisions, or is AI going to allow for more autonomous systems to operate? On this, we've been working very, very hard, including with Allied Command Transformation.

https://www.defensenews.com/outlook/2018/12/10/nato-defense-investment-official-talks-european-security-and-artificial-intelligence