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4 months ago
20
The EU has to assess its priorities, as well as enact institutional and budgetary change to achieve its defence goals, writes the Charlamagne Group.
The “Charlemagne Group” is an initiative by Michel Troubetzkoy, former director of EU & NATO affairs at Airbus, along with Michael Gahler, member of the European Parliament, Bertrand de Cordoue, former director at the European Defence Agency (EDA), and other senior professionals from the space, defence, and aerospace. The Group’s full paper on concrete recommendations for the emerging Defence Union can be accessed here.
1) The industrial base
The European Commission has more room to act on the defence industrial supply than on demand, as the latter is still in the hands of the member states.
The EU executive should build on its previous success in various programmes, by treating the Space-Defence-Aeronautics (SDA) sector as a global industrial ecosystem, considering Europe’s strategic autonomy and competitiveness.
EU antitrust rules should allow for the consolidation of the SDA sectors given that aeronautical and space industries have a dual role (civil and defence).
2) Institutional change
Proposed arrangements have to remain compatible with the constraints set by existing Treaties while exploring all avenues to accelerate the transition towards a true EU Defence Union.
The Charlemagne Group advocates for a Defence Union Commissioner (DUC), encapsulating all necessary competencies and budget in this field: research and development through the European Defence Fund, a common market for defence goods, measures to strengthen industrial production capacity and resilience, military mobility, etc.
The DUC should head the European Defence Agency, which only requires a Council decision adaptation, or at least Co-Chair EDA’s ministerial steering boards to establish closer ties between the Commission and EDA. The Council could also name the DUC its Special Representative for the Defence Union, overseeing PESCO and the European Peace Facility.
The European Parliament’s subcommittee on Security and Defence (SEDE) should be upgraded to a full committee responsible for the SDA sector and overseeing the Common Security and Defence Policy.
Within the Commission, the Group suggests renaming DG DEFIS to “DEFAS” to include digital, cyber, and hybrid threats, as DG DEFIS faces increased in-house management tasks for EU defence programs and space initiatives like IRIS².
Programmatic definitions and budget allocations should remain with DG DEFIS, with the EDA identifying EU-level capability needs. Technical evaluations for defence and space projects could be delegated to a reinforced executive agency, leveraging expertise from EDA, EUSPA, and member states.
This agency would also handle fund contractualisation, benefiting from VAT exemption like NATO’s NSPA.
3) Prioritising capabilities
While the EU owns space programs like Galileo and Copernicus, it is restricted by treaties from launching major arms programs. However, military capabilities, especially those requiring significant investment, are more effective and cost-efficient within a cooperative or interoperable framework.
The EU can support these areas through planning, coordination, and procurement, without duplicating NATO efforts.
Digital technologies, such as massive data processing and secured connectivity for military platforms, like collaborative combat and combat clouds, are critical capabilities that no single member state can develop alone.
In the space sector, it’s crucial to develop governmental services for defence using existing and future EU space programs (Galileo, Copernicus, IRIS²) and to create new space assets for military superiority and space domain awareness. The EU should ensure autonomy in space intelligence and operations, protecting space infrastructures.
Another significant development could be the EU acting as a direct customer for dual-use military services, such as airlift, naval rescue, SatComs, and firefighting. Currently, the EU is largest customer for institutional space launches, relevant for defence and security missions.
The EU should aim to regain autonomy in space access and become an anchor tenant for space security services, transitioning from national to EU capabilities.
4) Budgetary ambition
The NATO objective of 2% of GDP for defence spending is increasingly seen as a minimum, with discussions shifting towards 3%. However, studies show significant inefficiencies due to market duplication and fragmentation. The Commission should propose additional funding tools to improve resource use without replacing national funding efforts.
Key proposals include significantly increasing the EU defence budget, currently around €1 billion per year, to support member states’ defence efforts and contribute to overall spending targets.
This budget would provide long-term predictability for the defence industry, financing equipment stocks for war economy purposes. It would also promote a joint European approach to defence acquisitions, strengthening EU defence capacities and reduce market fragmentation.
Subsidies and incentives from this budget would encourage greater cooperation among member states, leveraging additional national funding.
For space, the EU budget should focus on three areas: developing and operating three space constellations, creating new space services for security that are independent of non-EU entities, including launchers and space situational awareness, and supporting the competitiveness of the space industry in a rapidly changing environment.
Adjustments to the European Investment Bank’s lending policy should consider the evolving needs of space and defence sectors.
5) Programmatic tools
The EU’s current role in armament is limited to incentive and influence mechanisms to meet common military needs, like the 2023 European Defence Industry Reinforcement Through Common Procurement Act (EDIRPA) program (€300 million).
The EU should establish a budget and identify an executive agency to encourage and manage common equipment orders and pooled services. Additionally, the EU could coordinate industrial capacities and supply chains for military equipment production, similar to vaccine production during the COVID-19 crisis.
For research and development in defence, the EU could fund high-risk, high-cost research in disruptive technologies, modelled after the US DARPA, through the EDA.
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