At the extraordinary European Council meeting in Brussels on Thursday 6 March, EU leaders are expected to launch a mammoth project to “reinforce (the Union’s) overall defence readiness”, reduce strategic dependencies, address its “critical capability gaps” and “strengthen the European defence technological and industrial base”, according to draft conclusions obtained by Agence Europe dated 4 March.
Two weeks ahead of the publication of the European Commission’s ‘White Paper’ on the future of defence, the EU’s heads of state or government will be debating defence capabilities and the ways in which defence spending should be financed. The proposals put forward by Commission President Ursula von der Leyen should receive broad support at the European Council (see EUROPE 13592/1).
The European Council “stresses the need to continue to substantially increase defence expenditure”, and, according to the draft conclusions:
- welcomes the intention of the Commission to recommend to the EU Council the activation, in a coordinated manner, of the national escape clause under the Stability and Growth Pact to “facilitate significant defence spending at national level;
- calls on the Commission to propose additional funding sources for defence at EU level, including by means of “additional possibilities and incentives offered to Member States in the use of their current allocations under the relevant EU funding programmes, and to swiftly present relevant proposals”;
- welcomes the intention of the Commission to put forward a proposal for a new EU instrument to provide Member States with loans backed by the EU budget for up to €150 billion, and invites the EU Council to examine this proposal as a matter of urgency.
To obtain these new loans, the States will have to join forces to invest in the areas where the needs are most urgent (air defence, drones, artillery, ammunitions, etc.). These loans will be made on a voluntary basis, so it is not a question of a new common loan at EU level, desired by some countries, including Poland, but refused by others.
With regard to the rules of the Stability Pact, a European diplomat pointed out that many EU Member States “have large debts and considerable budget deficits. The rules of the Pact are there for a reason, and we want the Commission to explain how they will be implemented”.
Franco-German coordination. The future German coalition has reached an agreement to inject hundreds of billions of euros into a failing defence industry and infrastructure. Under the leadership of the likely future Chancellor, Friedrich Merz, the CDU and SPD have decided to create a special ten-year fund of around €500 billion for public investment. On the French side, these announcements demonstrate a “desire for Franco-German coordination on increasing defence spending and supporting our industrial base”.
EIB. The European Council is expected to welcome the willingness of the European Investment Bank (EIB) to step up its support for the European security and defence industry and to call on the EIB’s Board of Governors “to urgently continue to adapt the EIB’s practices for lending to the defence industry, notably by reevaluating the list of excluded activities and by increasing the volume of available funding in the field of security and defence”.
Capabilities. The European Council conclusions will reportedly confirm a list of capability areas in which EU countries want to invest as a priority: air and missile defence, artillery systems, including deep precision strike capabilities, missiles and ammunition, drones and anti-drone systems, strategic enablers, including in relation to space and critical infrastructure protection, military mobility; cyber; artificial intelligence and electronic warfare.
“We are making progress in identifying key capability areas, from which we will draw projects with a European preference objective, and we are developing the range of public and private financing tools”, said a diplomatic source.
Another diplomatic source spoke of a page being turned in terms of defence. There is, in fact, “a clear desire on the part of everyone for Europe to take steps to become more sovereign, autonomous and ready in terms of defence”.
Link to the 4 March version of the draft conclusions: https://aeur.eu/f/fqu (Original version in French by Lionel Changeur, with the editorial staff)