The European Union is moving forward to shield and arm itself.
It will do so by increasing joint arms purchasing programs from European companies, filling the arsenals of the Member States with weapons compatible with those of the rest of the partners, and with the implementation of strategic warehouses of basic components—financed with European funds—that will serve as urgent supply base in case of crisis.
The new European defense strategy of the EU seeks to strengthen a joint purchasing center, for partners to increase orders through this channel and for up to half of defense purchases (in market value) to be made to European companies by 2035. according to the draft strategy, to which EL PAÍS has had access.
Brussels will also ask the Member States and the European Investment Bank (EIB) to modify their rules to allow financing for companies that develop weapons and ammunition, according to the plan being finalized by the European Commission.
The strategy also includes the gradual integration of the Ukrainian defense industry into European programs.
Russia's war against Ukraine was a wake-up call for the EU, waking up a continent in crisis, with open war and a defense industry that had been neglected for years.
The partners had outsourced security to the NATO umbrella – 22 of the 27 member states are allies of the military organization – and, therefore, to the United States, with limited investment and many purchases outside the community club.
With the large-scale invasion launched by Vladimir Putin, the Twenty-seven have gone through stages: they have sent weapons to kyiv and loaded them into a European fund, they have launched a training mission for Ukrainian troops and sent increasingly powerful weapons.
Now, when French President Emmanuel Macron has asked not to rule out any option—even sending troops to Ukraine, a possibility to which allies as powerful as the United States and Germany have closed the door—many are looking at the real capacity of the EU and its industry to guarantee supply in the event of a threat.
Brussels seeks to strengthen that industry.
“An escalation at a regional and global level cannot be excluded,” says the draft strategy, about thirty pages long, which is expected to be presented next week and which also talks about hybrid threats, with cyber attacks, sabotage and hacking. essential infrastructure and assets.
“Geopolitical developments point to a compelling need for Europe to take greater responsibility for its own security and prepare to effectively address the full spectrum of threats it faces,” he continues.
And achieving defense readiness requires investing massively in defense capabilities.
Little budget margin
The strategy includes ambitious measures, but at the moment the financing plan that accompanies it has little room in a context of tight budgets and the end of the legislature.
Brussels is still looking for where to get funds from.
At the moment, it can have around 1.5 billion recycled from another item, according to community sources.
In 2022, the defense spending of the Twenty-seven increased for the eighth consecutive year to 240,000 million euros, according to the strategy.
But 78% of defense purchases from the start of the war until June 2023 were made to companies outside the EU.
Furthermore, although it was agreed years ago that Member States should spend 35% of the equipment budget on joint purchases, only 18% has been reached.
Brussels now wants to reverse this and use the same system it used to acquire vaccines for Covid-19: larger contracts guarantee a better price, but also helps the industry plan the contracts.
“Times of high intensity/attrition war demand the ability to mass produce, faster and together as Europeans, a large set of defense equipment, such as munitions, drones and man-portable air defense systems,” says the strategy, which talks about moving from “emergency response to preparedness.”
Investing together, in addition, “will offset the financial costs,” says the strategy, which is being finalized by the high representative for Foreign Policy and Security, Josep Borrell, and the Internal Market Commissioner, Thierry Breton, in charge of the defense industry.
Brussels will create a new body, the Defense Industrial Readiness Board, and will support with EU funding programs “relevant flagship projects”, industrial sectors that must be strengthened, defense capabilities that must be industrialized, and critical bottlenecks that hinder the security of supply.
The plan will also promote that the defense equipment that the Member States have can be “interoperable” and “interchangeable” between them and with the “strategic partners”, which are governed by the same standards (which would assimilate European arsenals and weapons ) and that have common certifications or at least recognized in the EU.
Until now, there are multiple models of similar weapons, ranges of ammunition and technology in the different Member States that make this assimilation difficult.
In addition, the Commission will create an instrument – the so-called European Armaments Program – that will allow Member States to have more financing for joint purchases and standardization and may be exempt from VAT.
They may also issue bonds to guarantee the long-term financing plan for weapons programs.
The Community Executive will create a catalog of defense material of products manufactured in the EU for joint purchases but also for bilateral purchases and is even open to financing “additional quantities” of material to create a “strategic reserve” that will be available quickly .
Measures to mobilize civil industry
In this armored and reinforced Europe, Brussels wants to raise awareness of the external threat and the importance of shoring up the military sector of an EU that was born as a peace project.
Thus, the community club will explore measures to quickly mobilize production lines of the civil industry for defense production purposes and to guarantee qualified labor in all types of scenarios.
The new strategy also seeks to facilitate access to financing.
The defense industry faces serious barriers to accessing it, especially the private sector due to the perceived risks and the idea – which the Commission banishes – that it is not within sustainable finance.
Brussels will create a network of investors willing to participate in the defense sector and will support investments, according to the document consulted by this newspaper.
The plan also seeks to break another of the great taboos: the one that prevents the EIB, known as the climate bank, from financing companies that develop lethal weapons and ammunition.
“The current credit policy of the EIB group represents a major obstacle in the deployment of support instruments for the sector,” the strategy says.
“It is necessary to modify it,” continues the text, which maintains that this modification “will have positive effects” in cascade because it will give a positive signal to the market.
The measure will not be easy.
Several Member States, including Germany, refuse to change the EIB rules to open that door, something that is also not liked by some people within the community institutions, including the EIB, who fear financing defense material that ends up outside the EU. and involved in other conflicts.
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