The European Defence Fund after Brexit

The European Defence Fund after Brexit

28 January 2020

In response to a deadlock over the EU’s long-term budget for 2021-2027, European Council President Charles Michel invited EU heads of states and government to attend a special meeting on February 20, 2020. In the invitation letter that was released on January 25, the President stressed that in order to reach a final agreement on the 7-year multiannual financial framework (MFF), all sides need “demonstrate a spirit of compromise” (European Council, 2020).

The ensuing differences within the bloc have been driven primarily by the United Kingdom’s imminent exit from the EU on January 31 (BBC, 2020). Given that the UK was the EU’s second-biggest economy and a major contributor, its departure would decrease the number of joint funds, therefore forcing member states to reallocate funds to address priority issues at the expense of others (Reuters, 2020). For instance, new priorities like fighting climate change and managing migration will also use up funds that were previously invested in supporting economically weaker regions (Ibid.)

One of the important line items in the MFF that is at stake is the European Defence Fund (EDF), which aims to foster the competitiveness of, and innovations in European defence that would contribute to the EU’s policy of strategic autonomy (European Parliament, 2019). Finland’s proposal to further slash the Commission’s request for a multi-year budget of 1.134 trillion euros to 1.087 trillion euros nearly halves the size the EDF (Euractiv, 2020). In light of the growing momentum to accelerate European defence cooperation amid geopolitical uncertainties, cuts in the long-term budget that shrinks the size of the EDF could complicate the EU’s ability to coordinate, supplement, and amplify national investments in defence research and development (European Commission, 2018). Proposed cuts affect the foundation of a common European defence architecture in two ways.  

First, it could throw a monkey wrench in the development and co-financing of collaborative defence projects such as the Euro Drone, next-generation fighter jet, and the Franco-German main battle tank (Brzozowski, 2018). Less money in the pot also makes it more challenging to promote joint projects in the permanent structured cooperation (PESCO) framework that were conceived to redress capability gaps in European defence and reduce duplications of defence programs.

Second, a shrunken EDF also affects the ability of small-medium enterprises (SMEs) to help steer innovations in the defence sector. Through fully funded grants provided by EDF programs such as the “Preparatory Action on Defence Research” (PADR), SMEs have been able to help establish a basis for new innovative products to be integrated into various types of military operations (European Commission, 2018). For instance, Antycip Simulation SAS is one of the seven SMEs working in the PADR’s project “OCEAN20208” that aims to improve maritime surveillance and the effectiveness of military missions at sea (Ibid.). The company provides virtual software, projection, and display systems in supporting trials of applications and platforms before they can be operationalized in real-life settings (Ibid.).

The UK’s departure represents a new chapter in the EU’s defence discourse. It forces member states to make difficult decisions on various priority areas – defence being one amongst them. The European Council special meeting in February ultimately define the success or dead-ends in the EU’s aspirations for a common defence union.

Written by Chonlawit Sirikupt European Defence Researcher at Finabel – European Army Interoperability Centre

Sources

Banks, Martin. “EU leaders try to stir up space business, but funding is at risk.” Defense News. 21. January 2020. https://www.defensenews.com/global/europe/2020/01/21/eu-leaders-try-to-stir-up-space-business-but-funding-is-at-risk/ (Accessed January 27, 2020).

Brzozowski, Alexandra. “European Defence Fund could be breaching European treaties, legal opinion says.” Euractiv. 17. December 2018. https://www.euractiv.com/section/defence-and-security/news/european-defence-fund-could-be-breaching-european-treaties-legal-opinion-says/ (Accessed January 27, 2020).

Euractiv. Divided EU leaders to hammer out budget at February summit. 27. January 2020. https://www.euractiv.com/section/future-eu/news/divided-eu-leaders-to-hammer-out-budget-at-february-summit/ (Accessed January 27, 2020).

European Commission. Opportunities for SMEs in the European Defence Fund. Brussels: European Commission, 2018.

European Council. Invitation letter by President Charles Michel to the members of the European Council ahead of their meeting on 20 February 2020. 25. January 2020. https://www.consilium.europa.eu/en/press/press-releases/2020/01/25/invitation-letter-by-president-charles-michel-to-the-members-of-the-european-council-ahead-of-their-meeting-on-20-february-2020/ (Accessed January 27, 2020).

Multiannual financial framework for 2021-2027: negotiations. 13. December 2019. https://www.consilium.europa.eu/en/policies/eu-budgetary-system/multiannual-financial-framework/mff-negotiations/ (Accessed January 27, 2020).

European Parliament. “European Defence Fund: Multiannual financial framework 2021-2027.” European Parliament Think Tank. 15. May 2019. https://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_BRI(2018)630289 (Accessed January 27, 2020).

Financial Times. Finland pushes for cuts in EU cohesion funds amid budget deadlock. 2. December 2019. https://www.ft.com/content/f3dd5aaa-14d3-11ea-8d73-6303645ac406 (Accessed January 27, 2020).

Maulny, Jean-Pierre. “The Europeanisation of French defence policy?” Rosa Luxembourg Stiftung. 15. January 2020. https://www.rosalux.eu/en/article/1570.the-europeanisation-of-french-defence-policy.html (Accessed January 27, 2020).

Reuters. Explainer: What is at stake in talks on next EU long-term budget? 11. December 2019. https://www.reuters.com/article/us-eu-summit-budget-explainer/explainer-what-is-at-stake-in-talks-on-next-eu-long-term-budget-idUSKBN1YF1SG (Accessed January 27, 2020).

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