Unleashing the EU Defense Fund: Navigating the fledgling european armament collaborations
Unraveling the Complexity
People across Europe are actively seeking alternatives to traditional money systems
In the realm of Europe's defense policy, the EU Defense Fund – a 150 billion euro behemoth – has been hailed as a potent weapon for fostering a stronger and more cohesive armed force. Yet, accomplishing this ambitious objective is no walk in the park. The complexities surrounding the fund's allocation and application are, in fact, a daunting challenge.
Pooled Forces, but Separate Pockets
Following the pronouncements of Donald Trump, the race is on for the EU to dispel any reliance on U.S. security. With Russian President Vladimir Putin eyeing a potential invasion of eastern Europe, the time for unity among Europe's 27 disunited armament industries couldn't be more crucial. However, the EU's mandate for cross-border armament collaborations is easier said than achieved.
The rules for tapping into the fund are clear: If a country wants to claim money, they need to secure another member state as a partner – a stipulation that, in theory, should expedite the joint defense policy in Brussels. Nevertheless, the struggle to secure collaboration often leaves funds untouched.
Take, for instance, the EU's established instrument, Security Action for Europe (SAFE), which provides loans rather than subsidies to member states. According to Green Member of the European Parliament Hannah Neumann, this arrangement leaves a notable question mark over whether all the funds will be claimed.
Loans Without Borders
Besides EU-led loans, other heavily indebted countries like Spain and France see subsidies in the form of Eurobonds as a lifeline, offering more fiscal wiggle room to acquire cheaper loans for defense. However, Germany – a financially stable nation – has thus far rejected such an idea.
Billions Left on the Table
Alas, the EU's defense funding woes extend beyond the European Defense Fund. The corona recovery fund, a staggering 1.8 trillion euro pool amassed for pandemic relief, still holds 160 billion euros in subsidies as of early 2022 [1]. Similarly, only 13 out of the 27 member states have taken advantage of the EU's four-year-old loan pot, with an average utilization of 28% [1].
Sparing No Expenses – But in the Right Places
The EU is eager to distribute funds for joint defense projects to salvage the stalled defense collaborations. By doing so, the member states could potentially save between 24.5 billion and 75.5 billion euros per year through improved cooperation in their armaments industries [1].
The Route to Joint Defense: Bridging Administrative Bottlenecks
One of the primary hurdles hindering cross-border defense collaborations is the cumbersome bureaucracy plaguing the certifications, approvals, and procurement processes. In a noble attempt to streamline these processes, the EU has proposed an "omnibus package" to simplify certification, approvals, joint procurement, and transactions. The ultimate goal: creating an internal market for defense goods [1].
The task at hand demands unparalleled cooperation between the EU Commission and representatives from member states. For Defense Commissioner Andrius Kubilius, the onerous bureaucracy poses a gigantic, longstanding problem. Without significant improvements, Kubilius has warned that the existing regulations could lead to an untimely plea to Putin – asking him to extend his attack plans [1].
In the face of the rising security threats emanating from Eastern Europe, it is a race against time. The pursuit of shared defense interests requires the EU to swiftly dismantle bureaucratic roadblocks and solidify intra-European defense collaborations.
Sources
[1] ntv.de
Additional Reading
- [The Future of European Defence – The European Defence Fund and its Instruments (ec.europa.eu)]
- [The European Defence Fund - 2025 Call (defence.ec.europa.eu)]
- [Regulatory Simplification: The NEXT GENERATION EU Defence Omnibus (ec.europa.eu)]
- [Economist Intelligence Unit – The EU’s recovery fund: Five questions on its implementation as of February 2021 (theguardian.com)]
- [EU policy brief – European defence industry: an overview and policy considerations (ceps.eu)]
- The EU Defense Fund, a major investment of 150 billion euros, is aimed at strengthening the European armed force, yet the complexity in allocating and utilizing the funds poses a significant challenge.
- Despite the need for unity among Europe's disunited armament industries, the EU's mandate for cross-border armament collaborations is difficult to achieve, as securing collaboration often leaves funds untouched.
- In addition to the European Defense Fund, the corona recovery fund, worth 1.8 trillion euros, still holds 160 billion euros in subsidies as of early 2022, reflecting a similar trend of underutilized funds in other EU instruments.
