Building a Self-Reliant EU: Defense Solutions in the Face of Uncertain Geopolitical Upheavals

Kateryna Anisova, YSC Fellow 2024

With the ongoing Russian war against Ukraine, worrying signals about the US commitment to transatlantic security cooperation ahead of the presidential elections, the lasting US priority of the Indo-Pacific region, and the growing instability in the Middle East, Europe has significantly developed its security and defense actorness in the world over the last two years. While it does not mean that Europe is distancing itself from North America and its transatlantic bonds, these developments provide more opportunities to bolster EU-NATO cooperation and ensure the EU's complementarity to NATO's goals and commitments. Furthermore, enhanced defense capabilities in various sectors will expand the EU's Common Security and Defence Policy (CSDP) outlook from a crisis management power to a tool for confronting and deterring Russia and potentially China, ensuring the EU's growing geopolitical role. Both these objectives eventually influence the European security and defense architecture, where, due to its regulatory, financial, and institutional means, the EU can ensure coherence and consistency to avoid the duplication and fragmentation of these efforts.

Recent Changes in European Defense Industry Cooperation

The EU has stepped up to play a crucial role in addressing the European defense capabilities gap, which was exposed after the Russian full-scale invasion of Ukraine in 2022. It has spurred European states to increase their cooperation and act collectively in arms production and procurement to cover Ukraine's needs and then replenish their own stocks (European Commission, 2024). The European Defence Industry Reinforcement Through Common Procurement Act (EDIRPA) and the Act in Support of Ammunition Production (ASAP) initially became the solution to this demand for assisting Ukraine and ensuring the maintenance of its resources. Specifically, while ASAP incentivized states to manufacture defense products, EDIRPA encourages them to commonly procure needed defense capabilities and products (European Commission, 2024).

Additionally, two new initiatives, the European Defence Industrial Strategy (EDIS) and the European Defence Industry Programme (EDIP), are set to revolutionize Europe's defense industry capabilities in the coming years. The EDIP, in complementarity to the EDIS, aims to provide more sustainability and predictability for the European defense industry (Fiott, 2024). It is especially relevant in the areas where it will be difficult for European states to implement industrial projects individually, such as integrated air and missile defense, long-range missiles, precision strike weaponry, and logistics (Mölling, 2024, 10).

Overall, member states agreed to substantially reinforce Europe's defense industry sector to improve Europe’s operational defense and deterrence capabilities. Considering the lasting hesitance to approve and implement long-recommended initiatives to make the European defense industry commitment more ambitious, new policy innovations have definitely brought about significant changes in this area of cooperation. Nonetheless, there is significant room for improvement.

A Common Defense market: Feasible objective or too ambitious?

The absence of a common market for armament products and harmonization in standardization considerably increases the costs of cooperation projects. For instance, the US depends on slightly over 30 systems in its military arsenal due to a common market, while the EU has more than 170 (Welle, 2024). As a result, production in the EU is done on a smaller scale, with higher unit prices and a dispersion of resources allocated to research and development.

While there are evident advantages of common regulation and standardization in terms of cost-efficiency, such as possibilities for advanced defense capabilities and technologies production, and an increase of interoperability between the national armies, it is implausible that the member states will agree to give up on the interests of their national producers and weapon systems priorities. Finally, there is an exemption for defense contracts in EU public procurement rules mentioned in the Treaty on the European Union (Lannoo, 2023), and the change of the Treaties is hardly feasible in the immediate future. Therefore, it is vital to explore alternative avenues how the member states can address the increasing need for greater cooperation and avoid competition between European producers.

The Key to Success: Communication

In the talks on European defense cooperation, the European defense industry is another essential stakeholder. Underinvestment and expected fragmentation of demand across Europe are significant risks for businesses ramping up their production and ending up with a lack of demand and actual orders from the European states. Even after the launch of the ASAP-EDIRPA tandem, states prioritized non-EU defense products (Greenacre, 2024), creating serious hazards for successfully implementing the ambition to render defense entirely "Made in Europe". This problem could be tackled in two ways.

First of all, improved communication with clear political commitments will help industries understand the demand and readiness of the national governments and the EU to invest in long-term arms manufacturing and procurement projects. Consequently, the former will be willing to increase their production rates for immediate needs and launch technologically advanced joint projects for a longer perspective. Similarly, policy-makers and decision-makers must have a comprehensive picture of what and how much their industries can produce.

Sustaining communication channels between the EU, national leadership, and defense industries will benefit industrial planning and priority setting. Welcoming the recent EU Defence Industry Event, European Defence & Security Summit, and EU-Ukraine Defence Industry Forum, it is essential to maintain these channels not only at the level of ad hoc events but also through a regular and institutionalized process in order to ensure consistency of investments and awareness of capabilities.

Secondly, when being more aware about national defence industry capacities, states should improve the communication channels between each other, to facilitate possible joint development and joint procurement projects. This exchange is of special relevance for neighbouring states, as a way to preserve and enhance interoperability between their military capabilities. At the same time, in regards to fears of greater supranational governance in the defence sector and a centralized approach in defense planning, states might deliberately hinder the development of pan-European initiatives in an attempt to protect their national interests. However, most importantly, while defense remains an exclusive competence of the member states, the defense industry is a sector of the economy over which the Commission has competencies (Borrell, 2024). Therefore, there is no threat to national defence planning and development of national military capabilities. Instead, cooperation provides more possibilities to reach these commitments states agreed on at the NATO level in terms of the development of their defence capabilities.

The EU as a Leading Power within the Broader European Security Architecture

Participation of non-EU states in the EU's joint projects of the CSDP will allow the EU to gain a greater steering role in the overall advancement of European defense architecture. The mechanism of Permanent Structured Cooperation (PESCO) projects already enables the participation of third states, which are "key EU partners" and share the EU values and principles (EEAS, 2023). While the role of the third countries is limited, with only EU members agreeing and deciding on the capabilities and usage of the PESCO projects, the EU can benefit from the partners’ defense industry, technical expertise, and military capabilities on a consultation or explicit involvement basis, so that there is no reason for apprehension about intellectual property rights or distrust for security reasons. Two actors of particular interest are the UK and Ukraine.

The UK's participation in PESCO's Military Mobility Project became the first formal engagement between the UK and the EU's CSDP after Brexit (Council of the EU, 2022). The Russian full-scale invasion of Ukraine created additional political incentives for EU-UK cooperation in security and defense. The experience of the PESCO's Military Mobility Project and the common interest in helping Ukraine can facilitate the political rapprochement of the EU and the UK and provide the EU with successful examples of joint projects with non-EU European states.

While Ukraine's battlefield experience will significantly benefit its understanding of the specifics of modern warfare, Ukraine's participation in the EU's defense policy tools (for instance, PESCO, CARD, and EDIP) will also ensure its gradual institutional integration into the European security and defense architecture. Indeed, ensuring Ukraine's security involves more than just "giving aid"; it also entails integrating Ukraine into the Euro-Atlantic security community through increased interoperability with the European armies and defense architectures (Anisova, 2023).

Future Readiness: EU Defense Solutions for Uncertain Times

By becoming a more independent and complementary actor to NATO in the European security and defense architecture, the EU will become a better and more responsible rear guard for its citizens and partners, including Ukraine. Moreover, the perception of the CSDP will shift from being primarily a crisis management instrument to one that can be used to combat China and Russia, thus ensuring the EU's expanding geopolitical position.

The enhanced participation of the non-EU states in the joint projects will allow the EU to gain a more decisive and leading role in the broader European security architecture. Regarding the UK, the geographic proximity and shared threat understanding additionally confirms the need to establish a more comprehensive and balanced security partnership between the EU and the UK in the post-Brexit conditions. In regards to Ukraine, its comprehensive integration into the Euro-Atlantic security system and interoperability enhancement between reciprocal partners, can be considered as one of the security assurances available at the current war conditions. At the same time, the EU can take a more ambitious role in this process, eventually ensuring its growing geopolitical role as a security actor.

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