Federica Mogherini, the EU High Representative for Foreign and Defense Policy, said in Brussels on Tuesday that “the European Union is and remains open to US [defense] companies and equipment.
“Let me also say that the EU is, actually, at the moment much more open than the US procurement market is for European Union companies and equipment: in the EU, there is no Buy European Act, and around 81% of international contracts go to US firms in Europe today, so I do not see a real reason for concern.”
Mogherini was responding to an extraordinary letter signed by two senior US officials, Under Secretary of Defense for Acquisition and Sustainment Ellen Lord and State Department Under Secretary for Arms Control and International Security Andrea Thompson, who wrote to her in early May to protest plans to establish an EU Defense Fund, which Washington claims contradict the Union’s commitments to NATO. The letter was first reported on Monday by German newsweekly Der Spiegel.
The US Administration seems to believe that European NATO member’s promise to increase their defense spending to 2% of GDP should predominantly be spent on US-made weapons to an even greater degree than is now the cae.
In the four-page, closely-typed letter addressed to “Dear Federica,” the two US officials criticize the two key EU projects, claim that they contradict EU commitments to NATO, and warn that the EU Permanent Defense Cooperation (PESCO) and the EU Defence Fund would "unfortunately" fail to meet the requirements of "joint arms industrial cooperation within the EU and across the Atlantic." Mogherini’s staff declined to release the letter, but Der Spiegel published extensive excerpts.
Lord and Thompson claim obstacles to US companies accessing the EU Defence Fund is "a dramatic reversal" of "three decades of increasing integration of the transatlantic defense sector" and contradicts concrete EU commitments to NATO. In short, they imply, the EU is putting its alliance with the United States at risk.
Washington is especially worried about the "restrictive language and regulations," warns the letter, and so demands concrete changes. "Before these contracts develop, we advise you to review them once again with a focus on our long-term goals for the transatlantic security partnership," the two American officials wrote.
If not, "It is clear that similar reciprocally imposed US restrictions would not be welcomed by our European partners and allies, and we would not relish having to consider them in the future," the two US officials wrote.
"The US is convinced that with small changes to the draft regulation for the European Defense Fund, the concerns can be removed," the letter says.
The European Defence Fund is intended to “coordinate, supplement and amplify national investments in defence,” and according to current plans will amount to €13 billion in 2021-2027. In its current, preliminary form, it has a budget envelope of €590 million, which will fund joint projects to be selected by the EU commission.
The ultimate goal is to promote armaments cooperation between EU member states, and to develop their military capabilities, as part of a drive to assume a greater share of the financial burden for their defense.
Excellent thread on the European Defence Fund which is the most important initiative taken up to now by the EU in the field of defence. Because it's about improving capabilities with adult money, it should be encouraged not disparaged by the US https://t.co/kNa0H9GDpx— François Heisbourg (@FHeisbourg) May 15, 2019
But this drive for EU self-sufficiency is not to the taste of the US Administration, which fears that US companies could be excluded from EU weapon projects, and the €13 billion defense fund.
"We Europeans are doing what our American friends have been demanding from us for many years," German Defense Minister Ursula von der Leyen said, "and our job now is to build confidence that NATO will benefit from the Union’s defense efforts."
Specifically, Washington complains that US companies are excluded from the funded development projects through "poison pill" clauses in the relevant contracts, as well as the basic requirement that participation by non-EU member states must be decided unanimously.
The EU also wants to prevent non-European participants from exporting subsidized systems worldwide, so current rules stipulate that the EU retains a say regarding future exports. In their letter, the US officials directly demand the deletion of this rule, saying each country should control its own arms exports, according to Der Spiegel.
The violent tone of the US letter has surprised many diplomats in the EU. It was true that reservations were made about trying to become more independent in the armaments sector. But now Washington threatens punitive measures, if the EU does not give in. "Conversely imposed restrictions would not be welcome in Europe, and we would not enjoy contemplating them," the letter said.
At the May 13 meeting in Brussels, EU foreign and defense ministers discussed a response to the US letter, which Mogherini said is “creating unnecessary agitation.” She added that “We are preparing, together with the commission and in agreement with member states, a clear and complete reply to the concerns of the US Administration.”
From behind the scenes in Brussels, however, there is little interest to give in to what is seen as unwarranted US interference in EU affairs, and there is little appetite to reopen the contracts and review the rules as requested by the United States.
Click here for video of Mogherini’s May 14 press conference, on the EU website.