By William Connolly
This policy brief was written by William Connolly for INRL20160 Introduction to EU Politics at University College Dublin during the 2023/24 academic year. The module asks students to identify a live problem on the EU agenda, weigh the options open to the Union, and set out a concrete recommendation. The brief is reproduced here as submitted.
Executive Summary
The European Defense Fund (EDF) serves as a catalyst for cooperation between EU member states on weapon research and development. (European Commission 2021) This paper finds that the EDF is an excellent start to supporting European arms development and bolstering strategic autonomy, but that there is still a long way to go. Considering the Russian invasion of Ukraine, the EDF will need to have a substantial budget increase to handle the increased demand for materiel.
Context and Importance
As it currently stands, EU member states must rely on non-EU security partners for military equipment, also known as materiel. For instance, Poland recently acquired tanks and howitzers from South Korea to make up for losses from equipment shipped to Ukraine. (Associated Press 2022) Additionally, the American-made F-35 has become Europe’s fifth generation fighter of choice, seeing use in the British, Italian, Danish, German, and Dutch air forces. (Czech Army and Defense Magazine. 2023) While competition in the defense sector is important, this indicates that Europe does not have the production capacity to support itself. Additionally, annually “26.4 billion [Euro] is spent on the basis of duplication, overcharging and barriers to defense of procurement.” (Vidović, Beriša, and Dželetović 2019, p. 1744) This represents an important financial incentive to coordinating military development.
EU member state militaries face a dual threat. On one hand, the lack of self-reliance in arms development makes them vulnerable to shortages and outside partners. Should traditional non-EU arms partners such as America, South Korea, and India find themselves engaged elsewhere, EU member states might not have the materiel they need to meet security obligations. (Biscop 2020, p. 8) On the other hand, the lack of cooperation in development and procurement leads to excess costs for member militaries. The EU has a chance to address both shortcomings with one program.
The EDF was established in 2017, but began with two predecessor programs, the Preparatory Action on Defense Research and the European Defense Industrial Development Program, which ran from 2017-2020, with the EDF funding projects beginning in 2021. (European Commission 2021) The EDF was originally slated to have a budget of 13 billion Euro for the period of 2021-2027, however in 2020 this was decreased to 8 billion Euro due to the covid-19 pandemic. (Quintin 2020) This is divided into 2.7 billion Euro for Research and 5.3 billion Euro on development, with actual procurement, which is purchasing weapons for military use, being left to member states. (European Commission 2021) This is intended to support European defense industries, which will allow the Union and its member states to have more strategic autonomy and control over the arms procurement process. The EDF is also designed to increase interoperability between EU militaries and reduce redundancies, which, according to the European Commission, cost between 25 to 100 billion Euro annually. (European Commission 2021)
Critique of Policy Options
Increasing the EDF’s budget would allow it to fulfill its mission of increasing interoperability between EU member states and reducing redundancies, making militaries more effective in both combat and cost by increasing collaboration on the research and development of weapons systems. Furthermore, supporters argue that Europe needs strategic autonomy to avoid being tethered to American interests, especially if those interests shift away from Russia and the European continent. (Sabatino 2022, p. 137) However this is not a universal consensus.
A notable criticism of the EDF is that by attempting to develop strategic autonomy for the European Union, it may decouple EU member states from American support. There is a fear that the EDF may be interpreted in Washington as a means of economic protectionism, attempting to guarantee funding and government procurement contracts solely for European firms. (Yukins 2018, p. 1) If the EDF eventually becomes a barrier to trade, it would violate longstanding US policy of reciprocal defense procurement agreements, which the US runs a significant trade surplus of with Europe, and could potentially conflict with individual agreements between the US and 21 EU member-states guaranteeing free arms procurement. (Yukins 2018, p. 3) Overly protectionist policies may also cut member-state militaries off from non-EU technological innovations. (Black et. Al 2017, p. 58)
An important limitation to the EDF is that it cannot directly procure weapons systems for member states, it merely provides funding for their research and development. (European Commission 2021) The EU could directly procure weapon systems for member militaries, however any measures stronger than the EDF are unlikely to receive support, as the EDF itself was one of the first targets for budget cuts during covid. (Quintin 2020) As the EU currently stands, it is best positioned to facilitate cooperation and reduce friction between member states, while leaving procurement and military strategy to individual states and NATO.
Policy Recommendation
Considering the Russian invasion of Ukraine, the budget should be revised to its initial 12 billion Euro, with another large jump for the period beginning in 2028 when the fund is evaluated again. Even with the full industrial support of all NATO countries, there is a critical shortage of materiel for the war in Ukraine. (Stavridis 2023) There is a clear need for additional defense research and production driven by the war in Ukraine and the EU must rise to meet the challenge. It must continue to do this in a way that preserves the defense market with non-EU security partners, particularly the United States, meaning that there cannot be formal restrictions on member state procurement to force member states to buy only European weapons.
While the ultimate power on defense matters must still be vested in the member states, the EU can use the EDF to help member states meet their security objectives and obligations by reducing cost, increasing interoperability, and reducing reliance on outside manufacturers. The additional 4 billion Euro would go towards funding new and existing projects that would enable Europe to develop new weapons systems that can be used by member states and Ukraine to resist Russian aggression more effectively.
Bibliography
Associated Press. 2022. “First delivery of S. Korean heavy weapons comes to Poland.” https://apnews.com/article/europe-business-poland-seoul-south-korea-6d7a06d58323ef77fd4ce3024110e0e8
Biscop, Sven. 2020. “European Defense and PESCOL Don’t Waste the Chance.” Published May 5, 2020. https://euidea.eu/2020/05/05/european-defence-and-pesco-dont-waste-the-chance/
Black, James, Alexandra Hall, Kate Cox, Marta Kepe, and Erik Silfversten. 2017. “Defence and security after Brexit: Understanding the possible implications of the UK’s decision to leave the EU — Compendium report.” Santa Monica, CA: RAND Corporation. https://www.rand.org/pubs/research_reports/RR1786.html.
Czech Army and Defense Magazine. 2023. “Europeanisation of the F-35.” Published October 8, 2023. https://www.czdefence.com/article/europeanisation-of-the-f-35
European Commission. 2021. “Factsheet – European Defence Fund.” Last modified June 30, 2021. https://defence-industry-space.ec.europa.eu/eu-defence-industry/european-defence-fund-edf_en
Quintin, Audrey. 2020. “Cuts in the European Defense Fund’s budget: at what cost?” Published October 22, 2020. https://globalriskinsights.com/2020/10/cuts-in-the-european-defence-funds-budget-at-what-cost/
Sabatino, Esther. 2022. “The European defence fund: a step towards a single market for defence?” Journal of European Integration, 44:1, 133-148. https://doi.org/10.1080/07036337.2021.2011264
Stavridis, James. 2023. “Ukraine is running out of ammo. So is the US.” Published May 3, 2023. https://www.japantimes.co.jp/opinion/2023/05/03/commentary/world-commentary/u-s-ukraine-ammo/
Vidović, Nikola, Hatidža Beriša, and Milenko Dželetović. 2019. “The Establishment Of A European Defence Fund In The Function Of The Security Autonomy Of The European Union”. KNOWLEDGE – International Journal 26 (6):1743-48. https://doi.org/10.35120/kij26061743V.
Yukins, Christopher. 2018. “European Commission Proposes Expanding The European Defence Fund – A Major Potential Barrier To Transatlantic Defense Procurement.” https://doi.org/10.2139/SSRN.3204844
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