EU Finance Ministers Discuss Joint Defence Fund to Reduce Dependence on US
EU finance ministers expressed interest in the idea of a joint defence fund that would buy and own defence equipment, but some also suggested the EU should first look at existing financing options before creating new ones.
The European Defence Mechanism
The discussion is part of a European effort to prepare for a potential attack from Russia as EU governments realise they can no longer fully rely on the US for their security.
The ministers were discussing an idea, prepared by the Bruegel think tank, that a group of EU and non-EU countries could set up an intergovernmental fund, with paid-in capital, that would borrow on the market, and jointly buy and own expensive military gear.
Polish finance minister Andrzej Domanski said finalising work on the €800 billion package was a priority, but that most finance ministers agreed additional tools could be needed – like the Bruegel proposal.
Rearm Europe First, Then Maybe EDM
Domanski said that finalising work on the €800 billion package was a priority, but that most finance ministers agreed additional tools could be needed – like the Bruegel proposal.
“The reaction to the Bruegel proposal was generally positive,” one senior EU finance official taking part in the meeting said. “There was recognition that ReArm needs to be approved asap and then to develop things more along the lines in the Bruegel paper,” the official said.
Strategic Enablers
Bruegel said the EDM fund could focus on “strategic enablers” – costly military infrastructure and equipment armies need to operate – now often provided by the US.
These include joint command and control systems, satellite-based intelligence and communication, development of expensive new weapon systems such as fifth- or sixth-generation fighter jets, integrated weapon systems needed by multiple countries like strategic air defence, strategic large-scale air transport and maritime logistics, missiles and nuclear deterrence.
Single European Market for Defence Equipment
The EDM would also promote a single European market for defence equipment to lower costs and pool resources.
Defence procurement and production in the 27-nation EU is highly fragmented with at least seven different types of tanks, nine types of self-propelled howitzers and seven types of infantry fighting vehicles, which increases costs, reduces interoperability and hinders economies of scale.
Existing Financing Options
Some countries such as France, Germany and Belgium said, however, that the EU should first look at existing instruments, like the European Investment Bank, the European Defence Fund and the ReArm Europe plan before new instruments are created.
Conclusion
The EU finance ministers’ discussion on the joint defence fund is a step towards reducing the bloc’s dependence on the US for defence equipment and promoting a single European market for defence equipment. While some countries suggested the EU should first look at existing financing options, the majority agreed that additional tools could be needed to achieve the goal.
FAQs
Q: What is the European Defence Mechanism (EDM)?
A: The EDM is a proposed intergovernmental fund that would borrow on the market and jointly buy and own expensive military gear.
Q: What are strategic enablers?
A: Strategic enablers are costly military infrastructure and equipment armies need to operate, such as joint command and control systems, satellite-based intelligence and communication, and development of expensive new weapon systems.
Q: Why is a single European market for defence equipment important?
A: A single European market for defence equipment would lower costs and pool resources, reducing the fragmentation of defence procurement and production in the EU.
Q: What are the existing financing options mentioned in the article?
A: The existing financing options mentioned in the article include the European Investment Bank, the European Defence Fund, and the ReArm Europe plan.