The European Union (EU) has never directly funded defence research or military capability development before; so the fact that EU financial support for both defence research and joint capability development is now possible following the release of the European Defence Action Plan (EDAP) is curious and interesting. The fact that defence research and capability development are now seen as vital strategic investments on behalf of the EU marks a radical shift in the way the EU thinks about and supports defence. Following the release of the EDAP on 30 November 2016 and the unveiling of the European Defence Fund (EDIF1), the European Commission outlined how it intends to invest in defence. The fund is comprised of two ‘windows’. The first is centred on defence research, and will see the EU allocate €90 million for defence research from 2017 to 2020 out of the EU budget – €25 million of which has already been earmarked for 2017. In time, this ‘research window’ could be endowed with a €500 million per year allocation, called the European Defence Research Programme (EDRP). If agreed, this programme would be operational from 2020 onwards (Fiott and Bellais, 2016).
The second ‘window’ within the defence fund focuses on defence capability development. This ‘capability window’ aims to pool national resources with a view to financing joint capability development projects. Based on how much the European Defence Agency’s (EDA) participating member states (pMS) have spent on collaborative equipment projects in the past, the Commission estimates that a reference figure of approximately €5 billion per year for the ‘capability window’ could be enough to launch various capability projects. From 2010-2014, the EDA’s pMS spent an average equivalent amount of €7.56 billion per year on collaborative projects. To encourage member states to actively participate in the ‘capability window’, the European Commission has innovatively suggested the potential use of a number of financial incentives. The hope is that such incentives could stimulate defence cooperation between European states in ways not seen before. This is new terrain for the EU. It is worth reflecting on the EDIF and whether financial incentives can potentially serve as a ‘game changer’ for European defence cooperation.
ARES Group Comment, 2017, No. 16
Daniel Fiott 