STUTTGART, Germany — The European Union is targeting a €70 billion ($74 million) increase in defense spending over the next three years, and rushing to promote more joint procurements among its members, officials said Dec. 8.
Russia’s war against Ukraine has forced Europe to face the return of conventional warfare on its continent, and with that, the impact of decades of underinvestment in its defense capabilities. Dwindling munitions stockpiles, in particular, have officials scrambling to rebuild those arms chests collectively.
But collaborative procurement efforts have so far failed to materialize at scale. At the European Defense Agency’s (EDA) annual conference, held Thursday in Brussels as well as virtually, stakeholders from the union’s civil and defense leadership parsed out what has made it so tough for EU members to effectively buy equipment together.
The EDA’s annual defense data report, released during the conference, had positive news to share. In 2021, the union spent €214 billion (U.S. $225 billion) on defense, a new high for the alliance, a 6% increase over 2020′s numbers, and the first time it surpassed €200 billion in spending.
Member states spent €52 billion ($54.6 billion) on procurement and research-and-development (R&D) efforts, also an all-time high at 24% of total defense investments, and 16% more than was spent on those areas in 2020. Of that amount, €3.6 billion was specifically used for R&D programs. The report tracks defense spending for 26 of the EU’s 27 member nations, excluding Denmark.
EU foreign policy and defense chief Josep Borrell hailed these investments in his opening remarks at the conference, but set the bar even higher with a pledge from member nations to add €70 billion ($73.6 billion) to defense spending within the next three years. Acknowledging that this goalpost will prove to be a challenge, Borrell warned that focusing solely on national, present-term defense priorities and relying on off-the-shelf acquisitions will only extend the current “fragmented European Union capability landscape.”
Borrell also noted key areas of needed improvement for the union: joint procurement efforts remain lower than desired, and investment commitments are lopsided among members.
Joint purchases totaled about €8 billion, and only 18% of all defense investments, in 2021. That’s up from the 11% share in 2020, but also far lower than the EDA’s “modest benchmark” of 35%, Borrell noted.
“When less than 20% of all investment in defense programs is conducted in cooperation, we have to say, it’s not a good way of spending European money,” he added.
Borrell and others at the conference called for member states to address short- and medium-term equipment needs by “buying more, and buying more together.” Ongoing support for delivering weapons and equipment to Ukraine also remained unequivocally supported by the conference’s panelists.
But the ministers and stakeholders present were also realistic about the challenges to joint EU procurement efforts. While the delays and struggles to launch high-profile projects such as the trinational Future Combat Air System (FCAS) have made headlines, even smaller projects launched under initiatives such as the Permanent Structured Cooperation (PESCO) have failed to get off the ground after years of planning.
The union has long suffered from expectation management for initiatives like PESCO, said Jan Jireš, the Czech Republic’s deputy minister for defense policy and strategy.
Member nations “have repeatedly made the mistake of hyping some initiative, and actually promoting it as a real game changer in defense security, and then inevitably, disappointment came,” Jireš said during a panel discussion at the conference.
He noted that member nations have flexibility in how they choose to cooperate on defense investments. For example, the Czech Republic and Slovakia have each committed to procuring new CV-90 infantry fighting vehicles from Sweden, with over 350 vehicles to be delivered collectively, Jireš said.
He emphasized that this would not be a “joint” procurement effort in the sense of tendering a single contract for the two nations. “But still, we have tried to coordinate, let’s say, our negotiations with the Swedish government, for example, in order to achieve economics of scale,” he noted.
“Collaborating in joint procurement and capability development can take many different forms, and the spectrum … is very broad,” he concluded.
Officials at the conference noted that the war in Ukraine has presented a window of opportunity for purchases to replace obsolete, Soviet-made equipment among EU member nations. That has, to an extent, already been taking place, as Germany this year established a “Ringtausch,” or “Ringswap,” equipment exchange program aimed at encouraging allies to send their Soviet-era equipment to Ukraine and receive NATO-compatible equipment in return.
More could be done to connect the European Union and NATO to help refill needed stockpiles and increase joint defense procurement, conference panelists also said.
NATO members specifically can take advantage of a key online tool to coordinate their investments, said Stacy Cummings, general manager of the NATO Support and Procurement Agency (NSPA).
Cummings said she has presented alliance officials with the concept of “an online clearinghouse,” which would be based on the NATO Logistics Stock Exchange, an online marketplace. It would allow member-states to access existing contracts with industry, but also view each other’s excess stock, “so that nations can seamlessly offer stock, or other defense systems, to other participating nations,” she explained.
But there has long been “a sheer lack of information-sharing” between the EU and NATO, which isolates non-EU NATO members like the United States, Canada, and Norway, and hinders the union’s ability to share its defense investment efforts with those countries, Jireš, the Czech deputy defense minister, said.
As Prague wraps up its role as the EU Council presidency at the end of this month, Jireš claimed it was the first presidency that has consistently briefed non-EU NATO allies on European Union defense and security-related ambitions, plans, and proposals.
“I very much hope the upcoming presidencies will continue in this tradition,” he said, while acknowledging that the next EU Council president, Sweden, may not yet be a full member of NATO by the time it takes the helm in January. “So, that might be a challenge.”
Vivienne Machi is a reporter based in Stuttgart, Germany, contributing to Defense News' European coverage. She previously reported for National Defense Magazine, Defense Daily, Via Satellite, Foreign Policy and the Dayton Daily News. She was named the Defence Media Awards' best young defense journalist in 2020.
