Where and how much money can be found for increased defense spending is not only a question for individual states, but also for the European Union. The new European Parliament and the incoming European Commission will have to quickly deal with how to design the new seven-year budget of the Union after 2027 so that there is at least some money in it for defense.
The European Union, which itself has practically no powers in defense and can only support industry, was rather desperate for money from various sources after the beginning of Russian aggression in Ukraine. In a record five months, it prepared and processed, for example, the new ASAP program, which was supposed to support the increase in the production of ammunition and missiles in European countries with half a billion euros.
Photo: EU
That it will not be easy to find new resources was shown, for example, by the fourth European Defense and Security Conference in Brussels last week, where the leaders of European defense industry companies met with new MEPs and experts. The candidate for the newly created position of European Commissioner for Defense Andrius Kubilius has not yet been confirmed in the office, so he only had an informal breakfast with company representatives. The main request from businesses was that the new commission should not complicate the situation on the market even more and try, for example, to dismantle bureaucracy.
The debate about new sources of money was interspersed throughout the conference. States such as Germany do not like the idea of a common debt – i.e. Eurobonds. On the contrary, countries from the east of the Union see it as a relatively quick way to find money and encourage domestic industry and buy from outside the EU. According to them, speed is important.
For example, the People’s MEP Siegfried Muresan, who acts as a rapporteur for the new budget in the European Parliament, rejected the idea of joint debt of the union as in the case of a pandemic. “It is not possible to reduce money for cohesion policy and agricultural policy. At the same time, we should create a cushion in the next European budget for unexpected events related to security,” Muresan indicated the dilemma of the next budget. However, he did not indicate where to take it without increasing the member states’ contribution to the EU budget.
The call for a more single market
The representatives of the eastern member states of the EU preferred the speed of increasing the production and supply of weapons and ammunition, not only for Ukraine, but also for the members of the EU. Representatives from Western member states, on the other hand, rather emphasized that Europe needs to reduce its dependence on non-European weapons and technologies. However, eighty percent of new arms orders from European countries go to companies based outside the EU.
It is basically simple: countries like the USA, Israel or South Korea have both the latest defense technologies and factories for their production, which they can more easily increase production. Europe has a fragmented market and individual member states guard their champions. European companies also lack long-term contracts that would guarantee them that investments in increasing production will make sense.
According to experts, a more unified European market should therefore be created. In the future, according to Radka Konderlova, who is in charge of industrial cooperation at the Czech Ministry of Defense, the trend of joint orders by European states is inevitable. “This will also require companies to participate in joint research projects, which will then result in production and sales,” emphasized Konderlová.
Attention is focused on four states
According to the outgoing high representative of the EU for foreign and security policy, Josep Borrell, ten times less money is spent on research in the field of defense, from which new technologies are born, than in the USA. The Union has created several tools to support it, for example the mentioned ASAP or the Pesco program. However, there is relatively little money in them, they are units of billions of euros.
“We should not invent new tools and structures, but use the existing ones as best we can,” emphasized MEP and former commander of the Estonian army Riho Terras in one of the discussions at the European Defense and Security Conference.
According to Terras, an interesting source of new money for defense, in which the EU as an institution has practically no powers, could be pressure on four member states that are not members of NATO at the same time. Thus, the promise to spend at least two percent of the gross domestic product on defense does not apply to them in order to increase their spending. Ireland gives it 0.2 percent of GDP, Austria 0.6 percent, Cyprus 1.6 percent and Malta 0.5 percent.
In the new EU budget negotiations, from the beginning of next year, it will depend a lot on the presiding country, how it will start and whether it will succeed in emphasizing the emphasis on defense. It will be Poland that will spend 4.7 percent of GDP on defense next year, which is by far the largest share of all EU and NATO members. “Twelve billion euros, which are in the current Union budget for defense over a seven-year period, is a quarter of what Poland plans to spend next year alone,” emphasized Polish Deputy Minister of Finance Pawel Karbownik in a debate on Union defense funding. “There is no time to waste. The generals tell us that the question of war is not if, but when it will come.”
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Spotlight Aktuálně.cz – Jana Černochová | Video: Team Spotlight