EDTA comments on the Reflection paper on the future of European Defence

posted 12 Aug 2017, 12:37 by Jan Wind   [ updated 14 Aug 2017, 12:55 ]
On 7 June 2017 the European Commission publicised a reflection paper regarding the future of European Defence. The paper describes three scenarios for continued integration of defence planning, capability development and operations.

1. General comments
The Federation of European Defence Technology Associations (EDTA) welcomes yet another important paper on defence cooperation as it could establish a basis for future reference when cooperative activities are being contemplated. The paper however only describes goals and intentions. It does not even hint on routes to reach the goals. More importantly, it does not indicate which national or European bodies or institutions would take decisions in each of the scenarios.

It is necessary to have at least a view on potential routes to the goals of this Reflection paper. Otherwise, it will remain a dream as so many other plans for defence cooperation.

Page 5, 3rd paragraph, “In 2016, national governments stepped up their response to pressing security threats and the concerns of their citizens. Defence budgets were increased accordingly.” seems to become the understatement of the year after over 20 years of downtrend.
Pag 6, the last paragraph: “Economies of scale matter more than ever to improve effectiveness and efficiency.” Is not necessarily true: in some cases it could be more efficient, but it is often not more effective1.

2. Capability perspective: decision power
In the current intended level of European integration, quite comparable with scenario “A”, all decisive power lies within the member states. These will primarily decide on planning, capability development and operations based on their national priorities. In scenario B and C many of these decisions will be taken by European Institutions, like the Commission, the EU Parliament, EDA and a (new) dedicated European Defence Research Agency (page 14).
This is not necessarily bad for a Union moving slowly towards further integration, but the key lies with who defines requirements, who takes decisions and who pays the bills. When these elements are not balanced cooperation will fail. More in particular, when the power to decide is taken away from Member States, they will be reluctant to allocate national funding through the European Defence Fund.

The EDTA recommends developing an incentive or other solution to overcome or soften this loss of national autonomy. Lack of a solution will block the route to both scenario B and C.

3. Need for harmonisation of requirements and planning
Joint requirements, joint acquisition, budget coordination and synchronisation over long periods will be crucial for scenario B and C to be successful. For most Member States, this will be the most important change in their attitude. National variants like in the NH90, or budget shifts to suit the needs of a new elected parliament will not be possible anymore. Neither will it be possible any more to actively support a national technological and industry base.
This need for harmonisation, coordination and synchronisation is mentioned in the description of scenario B. The intention is however difficult to realise as long as investment decisions and definitions of needs and priorities remain in the hands of the Member States2.

To stimulate harmonisation and synchronisation the EDTA recommends to establish a “European Requirements and Synchronisation Evaluation Office or board”.

This entity should review requirements before submission in a public tender and provide recommendations for harmonisation3 and synchronisation4. Recommendations could include potential cost savings. Options for common life cycle support could be evaluated too.
Follow-up of Member States to these recommendations would be voluntary, but could be an element of rating for EU funding from the European Defence Fund in the future.

4. European Defence Technological and Industrial Base (EDTIB): specialisation
Much has to be done for cooperation to become the norm. In scenarios B and C, European organisations will coordinate and decide over planning and procurement.
Joint acquisition will lead to industrial specialisation. Not all research facilities and companies in Member States will be able to survive competition. This could – in the end – lead to monopolies.

The EDTA recommends to develop a European policy to retain a certain level of diversity in the defence research and capability sector.

It would be effective to concentrate activities in only a few centres of excellence in the EU. Two or three centres of excellence in each area of technology would suffice. These should compete, but mainly based on scientific excellence. Regardless ownership all Member States and the European commission should have unrestricted access to these facilities.
In our view this unavoidable shakeout of national facilities should not be effectuated by commercial competition. We believe that a more fundamental restructuring of technological and industrial capabilities across the Union based on technological excellence is important. To ascertain European technological independency the resulting facilities are of “strategic” value and should be protected from undesired external takeovers[5].

5. Technological drivers
On page 7 a few new and advanced technologies are listed that are relevant for the defence sector. Big data, cloud technology, unmanned vehicles, artificial intelligence and CBRN are mentioned.
Several of the technologies we mentioned in our comments to the technology focus of the EU global strategy paper of June 2016 are now also mentioned in the reflection paper. Still missing are: advanced sensors; command & control; low probability of intercept communication; advanced materials; kinetic interceptors and advanced training facilities.
In addition we would like to mention technological means for intelligence gathering (SIGINT, COMINT, IMINT, etc.). The lack of these means was felt strongly in recent EU missions.

The EDTA recommends to apply the incentive of a EU contribution to capability development only for technologies urgently needed for lacking capabilities. Technologies needed to ensure and retain strategic autonomy are of secondary importance.

6. Summary
The most important EDTA comments on the Reflection paper on the Future of European Defence are as follows:
  1. In scenario B and C of the reflection paper many decisions on capability development will be transferred to European institutions while Member States still have to provide national funding. We recommend developing an incentive to overcome this loss of national autonomy. Lack of a solution could block the route to both scenario B and C. 

  2. Harmonisation and synchronization of capability development projects is deemed necessary for the future of European defence. To stimulate this we recommend establishing a “European Requirements and Synchronisation Evaluation Office or board”. 

  3. Cooperation should become the norm in the EU. In scenarios B and C this could however lead to industrial monopolies. We recommend developing a European policy to retain a certain level of diversity in the defence research and capability development sector. 

  4. Future EU contributions to technology development seem to be focused on the need of European technological autonomy. We recommend shifting this focus to technology and capabilities urgently needed for lacking capabilities. 

The Hague, 17 August 2017
Questions? Please contact EDTA president Jan Wind at E: jw@fedta.eu or T: +31 6 2350 2003 

[1] See a.o. Edward A. Kolodziej ,”Making and Marketing Arms: The French Experience and Its Implications for the International System”, page 150, (Princeton Legacy Library) July 14, 2014.
[2] Communication on the European Defence Fund page 3
[3] It should be noted that full harmonization is often not necessary. Harmonisation at subsystem level is often just as effective.
[4] Private bridge financing (see Communication on the European Defence fund, page 13) will help to overcome budget synchronisation gaps, but only on a temporary basis.
[5] Not only “hostile” takeovers as mentioned in scenario C. A takeover considered friendly by a company and their shareholders could be undesired from a European strategic perspective.

Disclaimer: Facts and opinions in this document are based on open sources and on the knowledge and experience of individual members of EDTA member-associations. This is not an official view of any of the member associations. The federation accepts no legal responsibility for what has been put forward by their members.