Europe must take a leap forward in terms of defense, according to the White Paper that Defense Commissioner Andrius Kubilius intends to present next Wednesday. The 20-page draft paints a bleak picture of the threat situation: The risk of an attack on one of the EU states can no longer be ruled out. In order to close the most important capability gaps in defense, the member states should pool their efforts as much as possible. "At the request of the member states, the Commission could also act as a central procurement body on their behalf," the draft states.
The EU Commission is thus building on the model that Brussels used to organize the procurement of vaccines during the Covid pandemic. The new edition is unlikely to be uncontroversial, as some member states are critical of the EU Commission's increased power. The White Paper qualifies that the EU could financially support the pooling of demand and joint procurement regardless of the chosen implementing body. It would not be enough for the member states to simply increase their national defense spending. This would only increase the fragmentation of European defense.
The increase in defense spending must go hand in hand with a significant consolidation of the European defense industry. In the short term, the member states would have to increase their stocks of ammunition, weapons and military equipment. In the medium term, capability gaps identified by NATO and the EU would have to be closed with a series of European flagship projects. Specifically, the White Paper lists seven areas:
The rapid development and procurement of many of the required capabilities could no longer be managed by the member states alone. Joint procurement is the logical consequence of joint research and development of defense capabilities. Increased cooperation could create added value and generate economies of scale.
On the contentious issue of "Buy European," the White Paper states that third countries often seal off their market from competition. Against this background, the EU should consider introducing a European preference for public procurement. However, this would only be effective if corresponding products were also available in Europe. The EU Commission therefore recommends creating strategic reserves and setting up a military sales mechanism based on the US model, as already envisaged in the proposal for the European Defense Industrial Program (EDIP). In the case of defense systems for which there is no European solution, the member states should consider bundling and consolidating their demand with companies from like-minded third countries.
In order to deepen the internal market for defense, the Commission wants to present an omnibus regulation by June. The aim is to remove regulatory hurdles and to harmonize and mutually recognize certification procedures.
It is striking that the controversial Eurobonds are not listed in the chapter on financing options. Instead, the White Paper lists options that are already widely known and refers to ReArm Europe. Mention is made of the new instrument with which the EU Commission intends to support member states with loans of up to EUR 150 billion for procurement. The national escape clause, with which Ursula von der Leyen wants to mobilize up to EUR 650 billion in armament investments, is also listed.
The Commission is also pinning its hopes on the multiannual financial framework: The next MFF must create a comprehensive and robust framework to, among other things, further deepen the internal market for defense and strengthen technological sovereignty.
The EIB must play a decisive role in the financing of European defense – the EU Commission is thus pushing for a relaxation of the house bank's rules. According to the White Paper, public financing will not be enough; small and large defense companies need the "best possible access" to private capital. The Commission wants to help channel additional private investment into the defense sector with a communication on the Capital Markets Union.
