PESCO: What Impact on European Defense?

By Davis Ellison

Though Permanent Structured Cooperation seeks to reshape European defense, there are critical problems within the European Union that are set to stall any new progress. Eastern allies, neutral states, and protectionist defense industries will all need to be managed before any meaningful developments can be made. Alternative models of organization may need to be explored by member states to improve cooperation.

On November 12th of last year, twenty-five European Union Member States adopted a measure laid out in the Lisbon Treaty almost a decade ago. Permanent Structured Cooperation (PESCO), a piece of the Common Foreign Security Policy that initiates defense cooperation in nearly all matters, has come to the fore of the European integration project. Defense is often the last item on the agenda for the European Union, but with a continuing refugee crisis, Russian aggression towards eastern Member States, Brexit, and a severely strained transatlantic relationship, the project has been reinvigorated. Largely a Franco-German initiative, PESCO creates yet another defense effort on a continent that already includes NATO and numerous bilateral and multilateral defense agreements.

While tabloids (particularly in Britain) have described the step as the coming of a “Euro-Army”, Bernd Riegert of Deutsche Welle has rightly pointed out that there is a long way to go. Though a significant step for the Union, one that has historically been stymied by defense issues, there are still fundamental issues on the continent that will undermine any EU-level defense integration. First, the eastern Member States remain steadfastly committed to NATO, while also face recent difficulties in their relations with Brussels. Second, the presence of neutral members in the PESCO agreement will lead to complications in the development of any common strategies, particularly if the Union hopes to remain as inclusive as possible on defense affairs. Third, any common weapons system procurement projects will face both inefficiencies and protectionism that will slow any production, decreasing the competitiveness of European industry against both the American defense complex and the state-controlled industries of competitors. Finally, the national defense forces in many European States are rife with inefficiencies and readiness problems, particularly in one of the central drivers of the project, Germany.

Eastern European states prioritizing NATO over European defense

For any meaningful progress to occur, the concerns of central and eastern members (CEE) will have to be taken into account, especially as it is precisely their concerns about Russian revanchism that are in part driving the project. First and foremost, for these States, NATO is the principal security actor (understandable given its historical deterrent role against Russia and its more credible [though hardly airtight] Article V security guarantee). CEE States have been particularly problematic for the European Union in recent years, with many coming into direct conflict with the European Commission through the European Court of Justice.

Poland and Hungary pose particular difficulties for the future of a common European defense. For Poland, its Law and Justice party government has repeatedly run afoul of Brussels, having most recently been placed on formal warning for judicial reforms that run counter to the democratic values of the bloc. Furthermore, Poland is much more hostile towards Russia than other EU Member States, understandable due to its long history of suffering from Russian aggression. The problem is different in Hungary. The Orban government has reversed course on the state’s post-Cold War democracy, becoming what Balint Magyar has dubbed a “mafia state” in his 2016 book, ‘Twenty-Five Sides of a Post-Communist Mafia State’. The extreme levels of corruption in Budapest have politically isolated Orban’s regime, leading his government to turn towards Russia, concluding a deal to build the Paks II nuclear reactor and also raising the specter of a Hungarian blocking of further sanctions on Russia. Despite both States agreeing to the new PESCO initiative, the democratic backsliding in the key States of Poland and Hungary will stymy the further development of any common EU defense, particularly in developing any common strategic doctrine towards Russia.

Neutral States as another hurdle to an integrated European Defense

It is not only eastern members that could complicate further defense integration efforts. Austria, Ireland, Finland, Malta, and Sweden all continue to maintain their official policies of neutrality, though Sweden and Finland have made some small overtures towards NATO in recent years, with Finland now hosting a joint EU-NATO hybrid warfare threat center. Regardless, the presence of officially neutral States will likely bring further issues in moving forward on any inclusive strategic development, especially as each are located in potential hotspots in the Balkans, the Baltic Sea, and the Mediterranean Sea.

These States signing to the PESCO agreement should not cause any major changes to this policy. Ireland, in particular, could reverse policy in the future as it only passed the measure in the Dáil (the principal body of the Irish legislature) with a 75-42 vote along party lines. The problem, of course, depends on the view of what an EU defense force should be. If it is to be an actual, continent-wide unified force, neutral States in critical areas will prove problematic. If any EU force is to exist alongside national forces (or on an emergency, ad hoc basis), these States opting out would not be particularly harmful due to their small contributions in force size. Generally, continued moves towards EU defense integration will have to reconcile the participation of all members’ strategic posture with the raison d’être of an EU initiative.

PESCO: a challenge for States’ military industries

The core reasoning of PESCO, the streamlining of European defense research and procurement, along with the development of a more independent logistics capability, will face serious problems with both protectionism and inefficiencies in the defense industries and readiness of national forces. As Sophia Besch at the Centre for European Reform has written, national security of supply (a guarantee of supply of goods and services sufficient for a Member State to discharge its defence and security commitments in accordance with its foreign and security policy requirements) is a way for Member States to maintain uncompetitive defense industries as state-subsidized job creation schemes in a high-skilled industrial sector. Indeed, the International Institute for Strategic Studies Military Balance 2017 shows that 80% of defense equipment is bought domestically by Member States, which could lead to inefficient duplications if the EU was to create multinational military forces. There are 37 types of main battle tanks, 12 types of tanker aircraft, and 19 different combat aircraft across Member States, raising the question of which equipments would be part of a European defense corporation, along with their compatibility within a multinational military force. Furthermore, national defense projects have been in direct competition with one another on the arms export market. This was seen in 2012 when French company Dassault came into conflict with German-led Eurofighter Jagdflugzeug GmBH for sales of combat aircraft to India.

The internal details of negotiations are not clear, but such competition will necessarily bruise efforts to create a standardized European defense industrial base. While PESCO and the accompanying European Defense Fund agreed to earlier last year seek to overcome these difficulties, the importance of defense firms to national politics necessarily generates protectionism, particularly as seven Member States are in the top arms exporters list according to the Stockholm International Peace Research Institute. Dassault, BAE, Eurofighter GmBh, Saab, and Finmeccanica are unlikely to give up any competitive advantage in order to serve a wider European project, and will likely lobby to prevent giving it up.

Europe not yet ready for an integrated European Defense?

Finally, European national forces suffer from a widespread readiness problem. As Elisabeth Braw recently noted in Foreign Affairs, PESCO is unlikely to rectify this problem. Braw cites interviews with former Italian chief of defense Vincenzo Camporini and former Romanian defense minister Mihnea Motoc that both point out serious problems with mobility and immediate readiness in European defense. According to the European Defense Agency, Europe has 1,823,000 active duty personnel available across Member States. However, only 417,000 of these forces are deployable, and only 79,000 of them in a sustainable manner. There have been a number of high profile cases of the readiness gap being laid bare, the most famous now being the case of German soldiers using broomsticks instead of actual firearms in a 2015 NATO exercise.

These endemic problems at the national level across most Member States are unlikely to be rectified at the EU-level without deeper levels of integration, far beyond what PESCO now provides for. It is not merely an investment or training issue either. Competing priorities in national defense and differing definitions of readiness across Member States contributes to the wider readiness problem. For example, Greece massively over-invests in main battle tanks due to misplaced priorities regarding Turkey. There is thus a high level of investment in Greece, but in the wrong places. Any real progress in European defense integration will need the alignment of strategic priorities across States in order to begin addressing the readiness problem with a common investment and training strategy.

Further European integration as a step towards a successful PESCO

Fortunately for the European project, the answers to the aforementioned problems lie in further integration. There are signs of improvement in other regards, including the development of the Military Planning and Conduct Capability that functions as the EU’s first joint command for non-executive mission. More importantly, the question will be about what kind of integration is to occur. As Niklas Helwig wrote in his 2016 article for the Finnish Institute of International Affairs, ‘Europe’s New Defence Agenda’, new EU-level defense initiatives are likely to lead to a multi-speed Europe as competing strategic imperatives lead States to either adopt or reject new initiatives. A major divide on this issue has historically been between France and Germany, as Berlin pushes for a more inclusive integration project while Paris stresses strategic autonomy.

However, developments in both of these major ‘engine’ States indicate degrees of convergence on this issue. Germany has been cooperating with the Dutch, Czech and Romanian armed forces on a bilateral level, incorporating elements of these partners’ forces into the Bundeswehr through the NATO Framework Nation concept. Concurrently, debates in the formation of the new German government have featured issues related to defense and integration, leading to the possibility of a new coalition taking a new direction on defense matters.

Meanwhile, Emmanuel Macron’s new Strategic Review of Defense and National Security has pushed for a European Intervention Initiative, a program independent of both the EU and NATO to entice willing partners to become involved directly with a more assertive international posture in the southern neighborhood. With both France and Germany pushing for continued innovative force configurations with partner States – namely through integrating elements of their own national forces into those of their neighbors on a bilateral or multilateral basis such as the Eurocorps – a core set of European Member States could begin to coalesce into a grouping that could more efficiently work together on the issues highlighted above. Such a core group could more easily create a common strategic doctrine with enough detail to act as a guiding force for capability and procurement planning, while also better mitigating the effects of defense industry protectionism on a multilateral basis.

Naturally, such a multi-speed arrangement would create a dilemma for States that are in political conflict with the core EU Member States (namely Poland and Hungary) as perceptions of the Franco-German integration project are met with skepticism in Warsaw and Budapest. Despite this, a multi-speed Europe is likely to be healthier than an inclusive one that has led to gridlock and inefficiencies in defense.

To summarize the current state of affairs, PESCO has reinvigorated Europhiles who have faced painfully slow evolution of the Common Foreign and Security Policy, but there are simply too many issues across the continent to be overly optimistic. Despite this, some change appears to be on the horizon as to what integration means, which will certainly have consequences for European defense.

Cover Picture: an A400M, a collaborative venture involving the governments and industries of six European countries, in 2014, © Cpl Neil Bryden RAF, Crown Copyright / flickr