15 July 2021
The COVID-19 pandemic has had a strong impact on most of the world, and Europe is no exception. The European economy was deeply affected in several sectors. Business-related to defence, security, and European defence cooperation was one of the hardest-hit sectors.
Out of fear for an imminent economic crisis, the EU planned a budget cut for 2021-2027 in those sectors not considered to be of immediate use in the battle against COVID-19 (Rybnikárová, 2020). Such a downsizing of funds intended for EU defence and security will certainly make current transatlantic relations rather complicated. The European Defence Agency (EDA) member states spent 223.4 billion Euros on defence in 2018. This equates to 1.4 % of GDP, which is well short of the target of 2% of European GDP spent on defence by 2025, as agreed upon by the European allies and NATO (Meyer et al, 2021, 19). Drastically reducing defence spending will make this 2% target impossible to reach. In this sense, relations with the United States and other NATO members could be jeopardized (Marrone, 2020).
Furthermore, the primary income on which the EU Cooperation Structure (PESCO) relies is based on contributions from single member states. Presumably, further cuts on the budget will come from the national defence of those European countries more heavily affected by the COVID-19 pandemic. These countries might be less keen to spend money on defence and security, both on a national and an international level. Consequently, this will further influence the economic flow to the defence and security sector. However, budget cuts are not the only challenge facing the defence industry. The defence industry will also have to deal with negative consequences on production facilities and supply chains. Although Europe is not facing a proper economic crisis yet, it is indisputable that financial markets have become accustomed to uncertainty in the last year and a half. Consequently, a dramatic decline in stock prices has occurred, which, again, has mainly involved sectors such as defence and security (Sreekumar, 2020).
However, despite military defence and security suffering on the economic level, they demonstrated to be essential and pivotal in the battle against COVID-19. All over Europe, militaries have been mobilised to create more hospital space and help civilians in need. Furthermore, they were in charge of supplying medical equipment, shipping it from and to other countries. In the first phase of the pandemic, Europe’s air forces also assisted with the repatriation of thousands of citizens stuck in foreign lands and could not enter their own country because of the global lockdown (Fiott, 2020). Currently, armies are being used for coordinating and assisting medical and paramedical staff in the vaccination campaign.
Nevertheless, despite the massive use of the armed forces in the fight against COVID-19, militaries have not operated at their maximum strength. COVID-19 outbreaks amongst military personnel have had a concrete impact on the capabilities of national armies. In fact, the epidemic has spread quickly among military personnel, especially in the maritime forces, due to the communal life that the staff leads, and due to the difficulty of isolating the positive subjects and tracing their contacts. Many cases of massive outbreaks among the European armies were reported, but many more are expected to have occurred with less media coverage (Meyer et al, 2021, 25).
Despite the incalculable negative consequences of COVID-19 and the challenges it brings for the future, this pandemic can be turned into a growth opportunity for the defence and security sector.
The European Commission predicts that most EU member state economies will reach pre-pandemic levels in 2022 or 2023. These restored economies should give member states a solid foundation to invest more in coordination and collaboration between European armies and devote more budget to the EU defence fund in general. Making the defence industry flourish will surely guarantee a substantial recovery of the industrial market (Rybnikárová, 2020). As European Commission President Ursula von der Leyen said at the World Health Organisation’s 73rd assembly in May 2020: “This is the time for cooperation. This is the time for science and solidarity. This is the time for all humanity to rally around a common cause. And you can count on Europe to always play for the team”.
Written by Francesca COLOTTA, Legal Researcher at Finabel – European Army Interoperability Centre
Sources
Fiott, Daniel. (2020), ‘Will European defence survive Coronavirus?’, Real Instituto Elcano. [online] Available at: http://www.realinstitutoelcano.org/wps/portal/rielcano_en/contenido?WCM_GLOBAL_CONTEXT=/elcano/elcano_in/zonas_in/commentary-fiott-will-european-defence-survive-coronavirus
Meyer, Christoph O., Martin Bricknell, Ramon Pacheco Pardo. (2021), ’How the COVID-19 crisis has affected security and defence-related aspects of the EU’, European Parliament. [online] Available at: https://www.europarl.europa.eu/thinktank/en/document.html?reference=EXPO_IDA(2021)653623
Rybnikárová, Lucia. (2020), ‘Third party access to European Defence Initiatives in the Post-COVID-19 World’, GLOBSEC. [online] Available at: https://www.globsec.org/2020/09/14/third-party-access-to-european-defence-initiatives-in-the-post-covid-19-world/
Sreekumar, Arjun. (2020), ‘How COVID-19 Will Impact the Defense Industry’, The Diplomat. [online] Available at: https://thediplomat.com/2020/03/how-covid-19-will-impact-the-defense-industry/
