Can the European Commission Develop Europe's Defence Industry?
(Source: Center for European Reform; issued November 18, 2019)
The EU aims to develop a home-grown European defence equipment market, and has created a new defence industry and space portfolio in the Commission to facilitate this. But the EU’s ambitions face stiff headwinds in an area dominated by national interests, the US and NATO.

For decades, member-states have resisted the European Union’s involvement in the development, production and procurement of military goods and services. National defence industries were considered matters of a country’s vital national interest and therefore immune to the union’s regulatory reach.

But in the last three years, several things have challenged this approach and led to calls for the EU to play a greater role: Europe’s neighbourhood has come under threat; the US commitment to guaranteeing Europe’s security has been called into question; and the UK has voted to leave the EU. As a result, the EU has agreed a range of new defence initiatives.

The European Commission now proposes to allocate a total of €13 billion to defence research and development in the EU’s 2021-2027 budget cycle – a 22-fold increase over the previous budget.

The new European Commission has also established its first ever Directorate-General for the defence industry and space, a bold statement that it intends to develop a home-grown pan-European defence equipment market. Once the new College of Commissioners takes office, the new DG will be subordinate to the French European Commissioner, Thierry Breton, a former economy, finance and industry minister, who will be in charge of an immense portfolio covering the internal market, defence, and digital issues. The new DG is the culmination of several years of high-profile announcements about how the EU would step up its game as a defence actor.

However, Breton has his work cut out for him. In order to realise the union's ambitions, he will have to deal with member-states that fiercely guard their national interests, industries, and export deals, and disagree about how to co-operate with third countries, especially the US. But he can make progress if he hires the right advisors, looks to complement national efforts, improves the EU’s defence planning, champions the right projects, and advances co-operation with NATO.

Even with a mandate limited to implementation, Breton faces huge challenges in getting the new DG to deliver improved European defence capability. As the first-ever Commissioner for the defence industry, the choices he makes while in office will shape the EU’s defence industrial agenda for years to come.

Click here for the full story, on the CER website.


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