On Monday 3 February, the Heads of State or Government of the EU Member States will meet at the Palais d'Egmont in Brussels for their first defence ‘retreat’.
According to one European official, two principles underpin the meeting: the EU must assume greater responsibility for its own defence, and there must be a shared interest in greater cooperation at EU level. While no decision is expected, the discussion should help to “prepare, shape and provide guidelines for future decisions”, he added. The leaders will discuss defence again at their summit at the end of June.
After a discussion with the President of the European Parliament, Roberta Metsola, the Heads of State or Government will discuss the geopolitical context, in particular relations with the United States, a few days after President Donald Trump took office. In this context, Mr Trump’s comments and intentions regarding Greenland will be highlighted by the Danish Prime Minister, Mette Frederiksen. Military support for Ukraine will also be addressed.
The leaders will be joined for lunch by the Secretary General of the North Atlantic Treaty Organisation, Mark Rutte, for talks on strengthening EU-NATO cooperation. 23 EU Member States are also members of the organisation.
The afternoon will be devoted to European defence. Leaders will discuss capacity needs. “For the first time, the EU27 will be able to discuss and have a clear vision of which capabilities should be prioritised and on which to focus”, explained one official. The question of capabilities is “something that the Europeans cannot decide on their own and which is linked to NATO”, said a diplomat, who pointed out that the Alliance would define the priority capabilities for the Allies, probably next June. And he added: “Europe’s collective security is first and foremost a NATO issue”.
Several sources stated that it was not a question of defining a list of specific projects. Areas such as air defence and maritime security, critical infrastructure protection, drones, missiles and anti-missile systems could be highlighted.
One European diplomat felt that the EU’s added value lay in its industrial policy. “We need to strengthen the defence industry in line with our capacity requirements. Industry is the EU’s business”, he explained, pointing out that Europe did not have the industrial and technological base to provide the capacities.
Discussions on financing. Although Europe has increased defence spending in recent years, it still needs to be further increased, according to a senior official. “It’s not a question of if, but of how”, he added. The leaders will therefore discuss the financing of defence acquisitions and the development of the European defence industry.
On Friday, a diplomat was keen to point out that it was above all necessary for EU Member States that are members of NATO to respect the objectives of spending 2% of their GDP on defence. Seven Member States have not yet done so. According to this diplomat, this would free up €60 billion.
At the March European Council, leaders called on the Commission to explore all options for mobilising funding. These are still awaited and could be included in the ‘White Paper’ on defence, due on 19 March, which will take account of the views of the Heads of State and Government.
Funding through the current Multiannual Financial Framework (MFF) - be it the ASAP, EDIRPA, European Defence Fund and soon as a matter of course, EDIP, defence programmes - or other funds that could be used for defence, such as those linked to cohesion, will be addressed. The targets for defence in the next MFF could be mentioned, even if the funds would not be disbursed until 2029 or 2030.
The Heads of State or Government will discuss other ways of funding defence. Some would be in favour of European bonds to finance defence. The subject of a common debt is also on the table, as is the use of the European Stability Mechanism, but on Friday one diplomat described these plans as “irresponsible”.
The question of exempting defence spending from the calculation of Member States’ deficits has also been raised by some.
Strengthening the role of the EIB. The Member States also want the European Investment Bank (EIB) to contribute to this effort. It has already extended the scope of its activities by amending its requirements for dual-use projects (see EUROPE 13407/7), introducing a new credit line for financing SMEs in the security and defence sector and setting up a one-stop shop for security and defence financing.
On 30 January, the leaders of 19 European countries (Belgium, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Romania, Slovakia, Spain and Sweden) wrote to call on the Bank to explore other ways of playing an even greater role in financing investment and mobilising private finance for the security and defence sector.
These Member States are proposing to reassess the list of excluded activities, to adjust the lending policy in order to increase the volume of financing available in the field of security and defence, and to study the issue of debt earmarked for the financing of security and defence projects.
The ‘environmental, social and governance’ criteria and the taxonomy prevent many private funds and banks from financing defence, said one diplomat, calling for the ESG rules on defence investment to be lifted.
See the letter: https://aeur.eu/f/fbj
Finally, over dinner, the Heads of State or Government will discuss security and defence cooperation between the EU and the UK with the British Prime Minister, Keir Starmer. This is the first time since Brexit that the British Prime Minister has met with his 27 counterparts from the EU Member States. A few days ago, EU High Representative Kaja Kallas said that an EU/UK agreement on security and defence would be a “logical next step” in their relationship (see EUROPE 13563/8). (Original version in French by Camille-Cerise Gessant)