Paper Defence And Strategic Dependence: European security strategies will only become a reality with a dramatic increase in defence spending to make up for 20 years of underfunding

Paper defence

The first ever European Defence Industrial Strategy (EDIS), which has been unveiled by the European Commission, is set to provide a framework for rebuilding Europe's defence industry after decades of the 'peace dividend' era — a period when the international situation allowed for a steady decline in defence investment. As stated in the European Commission's announcement, the strategy aims to ensure that by 2030, at least 50% of all defence procurement is sourced from internal production, with this figure reaching 60% by 2035. Currently, EU countries conduct almost 80% of their defence procurement outside the union, as indicated in the EDIS text. Additionally, the EU countries will strive to conduct at least 40% of all defence purchases jointly by 2030. The European Commission intends to open new production facilities, as well as to convert civilian production lines for the production of military products. From 2025 to 2027, within the framework of the European defence Industrial Program (EDIP), EU authorities plan to spend €1.5 billion.

As the European Council on Foreign Relations (ECFR) notes in its commentary on this subject, the timeframe for the implementation of the new EU defence strategy will not meet Ukraine's urgent arms needs. However, in the long term, this programme will also help Kyiv, as Ukrainian companies will be able to apply for EDIP funds, which, according to Margrethe Vestager, Vice-President of the European Commission, will 'confirm that Ukraine's future lies in EU membership'. However, the question now is whether Ukraine can survive until that 'future'.

However, for now, these plans seem 'paper-based,' more of an 'intentions statement' than a programme. Politico notes that the €1.5 billion allocated until 2027 is not enough to achieve the defence goals stated by the European Commission. European Commissioner Thierry Breton advocates for the creation of a €100 billion defence fund, but the mechanism for its formation is yet to be determined. The European Commission proposes changing the European Investment Bank's lending policy to allow it to invest in defence. There are other financing mechanisms as well if the EDIP becomes a real priority for the EU.

According to Bloomberg, investors are ready to line up if EU leaders stop squabbling over common defence funding and launch the bloc's permanent trillion-euro bond programme. A €450 billion pan-European borrowing programme has been launched to deal with the aftermath of the pandemic, but it will soon come to an end. Investors are highly interested in EU-issued high-rated bonds. Such borrowing does not fall under the Maastricht agreements on limiting budget deficits and as such, this financing will not require cuts in current budget spending. Within the EU, however, there is considerable opposition to the debt-building strategy. Moreover, as the experience of the pandemic shows, the question is how much of a crisis EU leaders view the situation.

The European Commission's new defence initiatives have the right objectives: to encourage cooperation at the procurement stage, to ensure the availability of defence products 'under all circumstances and in any time frames', and to support investment in the development and market entry of cutting-edge defence technologies. However, the EU has already adopted a number of decisions and documents designed to create similar mechanisms: the European Defence Agency, the main goal of which was formulated in exactly the same way, has existed since 2004; the European Union's Permanent Structured Cooperation on Security and defence (PESCO) has been in effect since 2017, and the first meeting within NATO's Defence Production Action Plan, which is aimed at increasing joint procurement and production capacity, took place in October 2023 However, thus far, the countries of the community have failed to find common ground on defence issues. Countries with developed defence industries (France, Germany, Italy and Spain) often cannot agree on how to distribute contracts among national arms manufacturers, The Economist writes. National priorities in terms of arms procurement vary: France needs aircraft carriers and light armoured vehicles, while Germany needs long-range aircraft and heavy tanks (more on these contradictions → Re: Russia: Who is undermining NATO?). 

Further, the development of defence industries will require an increase in national defence budgets. To date, only nine EU countries, which are also members of NATO, spend the 2% of GDP on defence set in 2014. According to a report by the European Defence Agency, total defence spending by EU countries in 2022 will amount to €240 billion, or 1.5% of their combined GDP. This is 1.4 times more than in 2014, but is still only 75% of the planned level (€316 billion). At the same time, the increase in defence spending alone does not translate into improved defence capabilities due to the lack of an overall strategy. For example, Poland, which spends 3.9% of GDP on defence, makes defence purchases without a clear plan for the development of its armed forces and manning of personnel, experts from The Economist highlight. This has led to Poland receiving a large number of HIMARS systems capable of hitting targets at a distance of 300 kilometres, while the country's armed forces do not have their own detection systems with a corresponding range.

The real combat capability of NATO European countries has not grown since the bloc made a decision to increase defence spending in 2014. According to Novaya Gazeta Europe, France (203,000 soldiers and 41,000 in reserve), Germany (183,000 and 32,000 in reserve) and Poland (114,000) lead the alliance in terms of army size. Moreover, France and Germany have each added one combat battalion to their armies, while the United Kingdom has reduced the number of battalions by five, notes The Economist. Most European countries are only capable of deploying one full brigade for combat operations, which can only offer resistance on the battlefield in the initial phase of a war, until US support arrives. At present, Novaya Gazeta indicates that the total number of US troops deployed in Europe is about 100,000, of which 39,000 are stationed in Germany. Europe's current military reserves would be sufficient for about a week of large-scale conflict.

The new document does not provide an insight into the mechanisms that will overcome the disagreements that prevented the implementation of previous programmes. Moreover, within the existing fiscal architecture, it will evidently suffer the same fate as previous decisions. EDIS can be seen as a step in the right direction in terms of developing a common rhetoric of objectives. However, the added value of such a step falls critically short of the magnitude of the severity and urgency of the problem.

Strategic dependence

In essence, Europe faces two problems and two different defence challenges. The first is the need to improve its defence capabilities and to find ways to supply arms to Ukraine in the absence of a US aid package. Today, European defence capabilities are at a low level, and this in itself increases the risks of provoking a military conflict with Putin's Russia, which intends to exploit Europe's weaknesses (→ Re: Russia: Waiting for War). Therefore, the issue of enhancing defence capability appears urgent and simultaneously, as evident from the above, unsolvable within the existing funding mechanisms.

The second problem is the issue of 'strategic autonomy', entails a scenario where the foreign policy strategies of the United States and Europe increasingly diverge. Donald Trump has stated that in the event of a Russian attack, NATO will not defend European countries that are 'underpaying' for defence. But can the EU afford to stand aside when one of its members is attacked? Therefore, in addition to the task of building up conventional defence capabilities, which Europe is not yet able to solve, the problem of its 'strategic autonomy' also raises questions about European nuclear potential.

The US has an arsenal of 5000 nuclear warheads deployed on strategic carriers and B61 bombs stored at bases in Europe, which serves as a reliable guarantee against a Russian invasion. If the United States were to at some point abandon the doctrine of unconditional guarantee, Europe would have to rely on nuclear assurances from the United Kingdom and France. These countries have a total of 500 warheads (Russia has 6000). British nuclear weapons are managed by NATO's Nuclear Planning Group, with London depending on Washington to develop and maintain warheads. France manages its nuclear arsenal independently, but whether Paris will want to become the guarantor of nuclear security for the whole of Europe is unclear. As The Economist points out, it was doubts that the US was willing to sacrifice its own security in a confrontation with the Soviet Union to protect its European allies that, in the 1950s, pushed France to develop its own nuclear weapons (South Korea is now facing a similar problem of trust in US guarantees → Re: Russia: Defence of the South).

Currently, the United States plays a key role in NATO's command structure. The threat of Washington's withdrawal from the alliance under President Trump will force European countries to develop an alternative strategy for managing combat operations against Russia. At the moment, in Europe, only France, Britain and Germany have officers capable of planning operations at the division and corps level. The choice of the commander for such an operation will also be a subject of contention: traditionally, the position of Supreme Allied Commander Europe in NATO is held by a US Army general.

Experts from the US portal Defense News suggest not relinquishing the key role of the United States in ensuring the security of Europe but rather working towards achieving a new strategic balance between Washington and Brussels. They recommend that the EU enhance its conventional arms capabilities to a level that would cover at least half of the needs in case of external aggression, and also establish a contingent of no fewer than 5000 troops ready to conduct operations in neighbouring countries without US assistance. This would enable Washington to move some of its forces into the Indo-Pacific region without reducing its ability to deter Russia.

This is precisely what US hawks are seeking from Europe. Russia's attack on Ukraine appears to be part of a unified Chinese strategy that puts the US in the position of having to increase its deterrence efforts on two fronts — in Europe and in the Pacific region. Therefore, the EU must make a much greater commitment to its own defence and to countering the new Russian threat. The approval of EDIS does not yet seem like an adequate response to this challenge — primarily because it leaves open the question of additional costs and the mechanism for their financing. The US defence budget for 2024 is $886 billion (+3% compared to last year), while European defence spending, according to the ‘Military Balance’ report from the International Institute for Strategic Studies (IISS), has grown by 4.5% in 2023, which is almost in line with the average growth rate over the past 10 years, which in dollar terms amounts to about $275 billion. However, such a rate of return of the 'peace dividend' clearly does not correspond to the current situation. Therefore, the plan for urgent debt expansion by the EU, as reported by Bloomberg, seems to have no alternative.