The past ten years have changed the perception of defence and shifted the focus of its attainment from a national to an international level. Civil conflicts have taken over from inter-state conflicts and non-conventional threats are considerably increased. The new scenario makes nations unable to react alone successfully and calls for international, as well as regional, organisations to play a key role in assuring stability and managing conflicts. In this respect, improving defence and security policy means not just revising diplomacy, politics and military strategy but also financially reinforcing the defence industry, providing sustainable resources to ensure credible defence capabilities and maintaining operational sovereignty. At the moment the financial crisis is downsizing national defence budgets in Europe, and only five NATO members (Albania, France, Greece, the UK, and the US) spend the alliance’s benchmark of 2 percent of gross domestic product on defence. Such restrictive resources will certainly not ensure a more rationalised military capability and cutting defence means does not absolve Europeans of international responsibilities, thus reduced armaments will not ensure a more peaceful world.

Since 2004 the European Defence Agency (EDA) has been developing and strengthening the military capability of the CSDP. Established by the EU Council, it supports the latter and the Member States in their effort to improve the EU’s defence capabilities by boosting harmonisation of military needs as well as cooperating with programmes which aim to strengthen the European Defence Technological Industrial Base (EDTIB) and to promote research development. At the EDA’s annual conference round, which took place on 31 January 2012, proposals were developed which will be discussed at the next meeting of the Agency’s Steering Board Committee in spring 2012. The Committee is formed of the head of the EDA, High Representative Catherine Ashton, its Chief Executive Claude-France Arnould and Ministers for Defence of the Member States. This year the focus of the conference was on how to respond to austerity and to rethink defence cooperation, strategic priorities for the EDTIB and measures to increase the efficiency and cost-effectiveness of the defence market. In other words : implementing the concept of Smart Defence. French General Stéphane Abrial, NATO’s Commander of Allied Command Transformation, defines it as “a long-term vision.” Indeed, he adds, “Smart Defence means committing to implementing long-term strategic initiatives and developing capabilities which are essential to achieve this mission, which is based on focused multinational cooperation”.

On one hand, the obligations of the Alliance may require credible-sounding output, but on the other hand facts speak clearly : recent experience in Libya highlighted the inadequacy of the EU in carrying out air operations and once again NATO took on the task because the EU was not able to come to a decision. Furthermore : “operations are very demanding. Growing precision, information, surveillance means capabilities which not always are affordable for Member States alone” stresses EDA’s Chief Executive, Madame Claude-France Arnould. Europe must have military capabilities greater than the sum of its disparate parts and, for this reason, European governments need to work to build joint or complementary strengths. Budget stringencies –- and the lessons of Libya --- should accelerate this evolution. According to EDA’s Chief Executive “technology and innovation today are the driving factors” but in this difficult financial context, it seems more realistic to expect Members States to reorganise defence economy firstly by starting from resources they already have.

Alexandre Dossat, Aerospace and Defence Industries Association’s communication manager explains expenses for Defence Ministries. He stresses in particular that “cost for military personnel is the most important item in national defence budgets, and what’s more, such an element shows the need to spend not necessarily more, but certainly better in order to rationalise defence expenditure in favour of investments. At this moment we must use limited resources but work together in a more flexible way”. Cooperation is the key word in this situation of crisis. He explains that “in actual fact there are not new programmes to fund to improve military procurement, the solution is to consolidate demand and reduce market fragmentation”. Nevertheless the principle of pooling and sharing is still far from being common practice for military acquisitions, because Member States are still reluctant to accept a level of interdependence in a field which has implications for national sovereignty ; on other hand pooling and sharing of military assets requires a high level of mutual understanding in foreign policy. According to the EDA’s official data in 2010, despite total equipment procurement having grown by 1.8 billion Euros compared to 2009, European collaborative defence procurement still represents only a small part of military acquisition. Indeed it is a mere 22% (7.54 billion Euros when the national procurement amounts to 26.29 billion) compared with 76.6% for national provision, which explains the difficulty for European companies to penetrate the markets in other EU nations.

The low level of harmonisation could be explained by the low number of participants involved in intergovernmental cooperation, indeed, as in any negotiation, the fewer the number of participants, the easier it will be to reach a compromise. This is even more true considering the interests involved in defence cooperation, where strategic vision and needs are shared among countries striving to achieve a common goal. Thus while a common vision for CSDP is still lacking, the much maligned “two-speed Europe” is giving the answer : smaller is beautiful as some EDA’s officials might say.

A joint training exercise in dealing with improvised explosive devices Source : European Defence Agency

It is no surprise, then, that the states involved in an EDA cooperation programme must commit to sharing a lot of content and high standards. A readiness to collaborate, requirements, budgets, project management and industrial cooperation are a dissuasion for less motivated countries as much as they are an incentive for leading ones.

“The consequence” continues Dossat “is that the programmes involve only some states, generally those have highly developed military industries”. Cooperation programmes tend to include players with the most advanced capabilities in the relevant field and they balance the economical interests and foreign policy needs of each participating country. Thus the exclusion of other Member States from a programme becomes a natural condition for guaranteeing the survival of the CSDP, given that “implementing smart defence can have tough consequences for less well-performing industries. But it definitely improves the competitiveness of the most advanced players” says the ASD communications manager. This process causes cooperation to increase in projects with strong financial implications, where economic return is greater.

Nevertheless the invisible hand of the market will certainly be not sufficient to consolidate the EDTIB, and regulatory intervention at EU level may well be necessary, given the responsibility of the EU in times of crisis and the need to preserve technological knowledge, specialist skills, and know-how which represent a valuable asset in global competition. Europe should not allow itself to lose a part of this capital and long-term dependency on third parties for specialist skills is not sustainable if Europe wishes to maintain autonomy of action and operational sovereignty. Europe is a manufacturing economy that can hopefully avoid being consumed by the market competition represented by emerging powers, which by contrast are increasing military expenditure, but only if technological advantages can be maintained at very high standards.

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