European Affairs

True, the Europeans had adopted the so-called Helsinki Headline Goal for improving their military capabilities, but there was a long history in NATO of trying, without conspicuous success, to get Europe to share more of the military burden.

And I guess it is at this last point – the bit where people point to the gap between the ambition and rhetoric on the one hand, and actual capability on the other – that the European Defense Agency comes in. I like to think of the EDA as European defense’s “back office.” The “front office” came first, at the beginning of the new policy. It is staffed by diplomats and generals. The diplomats worked their way through the creation of new institutions, and the negotiation of the “Berlin-Plus arrangements” with NATO. [Worked out in the late 1990s, they allow the alliance to support EU-led operations – with intelligence cooperation and the loan of equipment and facilities – in which NATO as a whole is not engaged.] Then, in 2003, EU leaders adopted the European Security Strategy – a remarkably clear, and blessedly short, document which tells you in effect what the ESDP is for.

It analyses the post-Cold War (and post-9/11) world in terms with which I think Americans should be comfortable – pointing out that the new threats and challenges are not the conventional adversaries of the past, but such less tractable yet equally menacing dangers as terrorism, proliferation of weapons of mass destruction, state failure, regional conflict and organized crime. It acknowledges that Europe has a responsibility to take a greater share of the burden of sustaining global security. And it asserts without equivocation this position: “The Transatlantic relationship is irreplaceable. Acting together the European Union and the United States can be a formidable force for good in the world. Our aim should be an effective and balanced partnership with the USA.”

The “front office,” as I have noted, is staffed by generals as well as diplomats. They have run Europe’s crisis management operations – a surprising 16 of them to date, from the Balkans, to the Congo, to the Middle East, to Aceh in Indonesia.

It all adds up, and it may surprise you to know that in recent years there has been a fairly consistent level of about 70,000 European troops deployed outside the continent, whether under UN, EU, NATO or national flags. This, I suggest, is not nothing. On the other hand, it is also less than 5 percent of the nearly two million men and women we keep in uniform in Europe – and the fact that some 80 percent of this total are simply not deployable outside their national territories tells you that the modernization of Europe’s defense capabilities still has a very long way to go. It also tells you that Europeans collectively are not getting proper value from what they spend on defense – about $250 billion a year, less than half of U.S. expenditure but in absolute terms a pretty substantial input, particularly in relation to the achieved output of usable military capability.

There is nothing like operations to bring you face to face with your deficiencies and limitations – so it is no surprise that it was just as the ESDP was beginning to become operational that the European presidents and prime ministers decided, in 2003, that they had better complement the “front office” with a “back office,” an agency focused on the tools needed for the job. Tools and infrastructure – because the European leaders were becoming equally concerned about the condition of Europe’s underpinning defense technological and industrial base. The evidence was accumulating (and I shall come back to this) of steady erosion of Europe’s competitiveness and capacity on the industrial side.

So, just over two years ago, the European Defense Agency opened its doors for business with the mission of supporting the member states in their efforts to improve their defense capabilities for crisis-management operations. Our terms of reference range over military capabilities, defense research and technology, armaments, and industry and market issues – in other words, pretty much everything except the policy issues and the operations, which the front office handles. To address this wide-ranging agenda, we have one hundred staff (drawn from 20 different nationalities) and an annual budget of less than $30 million. National Defense Ministers hold on to their money, and to their decision-making authority: in matters of defense, no-one is prepared to be bossed around by some powerful supranational body in Brussels. So to change things we have to get the member-states to agree and – the bottom line – to spend their defense budgets in rather different ways than they might otherwise have done.

Fortunately, we have wonderful access – our Steering Board, chaired by my boss Javier Solana, comprises the defense ministers in person, and met four times last year. And we are ultimately working with the grain – the member-states want to do the right thing, even if, like Saint Augustine, they may not always want to do it right now.

They do want to stop spending their money on the wrong things and spend it on the right things instead; and they do recognize the necessity of increasingly pooling their efforts and resources. Because everybody knows that if Europeans want to preserve effective military clout, and a globally competitive industry, they have no choice but to cooperate. The era in which the business of defense could effectively be managed in 24 separate national boxes in Europe is now over; none of us can afford it any longer. The only way forward is, to express it in business terms, to consolidate demand, encourage the consolidation of the supply side, and create a continental scale of market in which demand and supply can meet.

So how are we doing? We have a wide range of specific projects in hand, from Software-Defined Radio (which is going rather well) to an effort to rationalize equipment test facilities across Europe. We have under management a portfolio of over 40 individual research and technology collaborations. But we think it is at the strategic level that we can ultimately add most value – which is why arguably our most important output to date is a document called the Long Term Vision, published last October, which attempts to look forward over the next two decades and draw some conclusions about the environment in which ESDP operations will take place and what that means for the sort of military capabilities and industrial capacity we will need.

This Long-Term Vision majors on the changing role of force in today’s world, and the accelerating advance of science and technology. It concludes that we must decisively break with the old concepts of warfare which obtained in the last century, which were all about unloading as much ordnance as possible on conventional opponents. It underlines that application of force will have to be increasingly modulated with what is happening in the political arena; that operations will likely take place in constrained and ambiguous circumstances, under tight rules of engagement and 24/7 media scrutiny. It emphasizes that the decisive capabilities of the future will be less heavy metal and high explosive, and more the capabilities that provide situational awareness, and allow rapid communication and decision-taking. Operations will be expeditionary, and multinational, placing a premium on interoperability, deploy-ability and sustainability. Perhaps not a wholly original analysis – but 24 ministers of defense are now on this same page. In passing, I think more surprise was created by some of the demographic and economic analysis the document contains – when you realize that in 2025 Europeans will comprise only six percent of the world’s population and that the average European will be 45 years old, it makes you think.

This year, we will be taking the analysis down one level, and working towards more detailed guidance on where we should all be concentrating our investment – on network-enabled capabilities, on strategic lift and so on. Analysis never fixed anything in and of itself, but we can at least make ministries of defense feel increasingly uncomfortable if they persist in prioritizing the purchase of main battle tanks and combat aircraft.

On the industrial side, I think we have made more conspicuous progress. I referred earlier to the traditional way of doing defense procurement largely on a national basis. A “security opt-out” clause in the European treaties has allowed more than half of European defense procurement to be sheltered from the competition rules of the Common Market. Without abandoning that clause, almost all member-states have now agreed, on a voluntary and reciprocal basis, to offer the bulk of their new procurement opportunities to suppliers in each other’s countries. The Electronic Bulletin Board on the EDA’s website on which these offers are posted went live last July – and now advertises around $9 billion of business. In passing, I should emphasize that this has nothing at all to do with “Fortress Europe.” It is purely about how Europeans deal with one another. It leaves the position of U.S. exporters unaffected.

More competition will make defense budgets go further. But we are just as interested in how greater play for market forces can help the European defense technological and industrial base (DTIB). At a major EDA conference earlier this month bringing together top government officials and industrialists from across Europe, there was striking consensus on this. As Commissioner Günter Verheugen expressed it: “The question is: How long can the DTIB survive if Europe continues to postpone reforms that are generally accepted as unavoidable?”

We need more competition in Europe, and we need more cooperation; if governments can consolidate demand – offer to the market more joint programs – the supply side will respond. Anything else is economically unsustainable. And it makes operational sense too – there is no form of interoperability better than different national contingents on multinational operations using the same kit. And I should note that this logic of European cooperation gets a helpful assist from the difficulties European industries find in accessing the U.S. defense market and in technology exchange across the Atlantic. We hope to crystallize all this into a top level European DTIB strategy for the defense ministers to consider this summer.

In closing, a quick word on Research and Technology. For the first time we have put together the data – and it is not [just] data, [it should also be read] as writing on the wall. Since the year 2000, the U.S. has increased its spending on defense R&D (research and development) by over 9 percent a year; collectively, Europeans have increased by less than 1.5 percent. So the U.S. now out-spends the EU by 6 to 1 in this area, and the DARPA (the Pentagon’s Defense Advanced Research Programs Agency) budget exceeds the entire sum of European defense ministries R&T (research and technology) expenditure. We are eating the seed corn.

Part of the problem is that only six or seven EU nations have ever gone in for defense R&T. So last year we devised and launched a new vehicle for joint investment, providing a way into the business for nations who had not previously been able to spend money effectively on defense R&T on a national basis. The fund totals $70 million, with 19 of our 24 Member States contributing; as a sign of the times, one of the major contributors is Poland.

So is our glass half empty or half full? [Americans would probably be right to] reserve judgment; Europe has promised so much in these areas in the past, to so little effect. But [Americans ought to] wish the enterprise well. On the capabilities side, this is absolutely not a zero-sum game with NATO: our activities are complementary, and if Europeans do manage to raise their game on defense, it seems to me to matter not a jot whether this is done on a NATO or an EU ticket. On the industrial side, we need to succeed if there is to be any sort of European defense industry to give the U.S. primes a run for their money – ultimately, I suggest, in [American] interest as much as ours. Personally, I have no doubt that the enterprise will succeed, since there is simply no alternative. The key question is how long will it take and what will be lost if the results do not come through sooner rather than later. But, from a U.S. perspective, I suggest that NATO’s recent Riga Summit declaration had it right: “A stronger EU will further contribute to our common security.” So, fingers crossed.

Nick Witney is the Chief Executive of the European Defense Agency. He presented this paper at a meeting in Washington sponsored by The European Institute in early 2007.


This article was published in European Affairs: Volume number 8, Issue number 2-3 in the Summer/Fall of 2007.