Feb 23rd 2006
From The Economist print edition
Should the European Union have a defence budget?
AS A rule, the European Union doesn't do defence. At most, it messes around at the margin. In 1999, it promised to set up a 60,000-strong rapid-reaction force. When this turned out to be not much of a force, several countries promised 1,500-strong battlegroups, ready to jet off on peacekeeping missions at a drop of a blue helmet. What EU countries have never done is to club together to spend money on defence.
That could be about to change. In one of the least-trumpeted big ideas of recent years, the head of France's national armaments agency has called for a €200m ($240m) programme in which EU countries would collaborate on basic research and technology in defence. The programme would be run by the European Defence Agency, an offshoot of the EU's bureaucracy. France's defence minister will formally put the plan to a gathering of European defence ministers next month.
In the world of defence contractors, €200m barely buys you a Pentagon spanner. The American Defence Department's budget request for 2006 will be just over half a trillion dollars; DARPA, one of many agencies that do defence research, spends almost $3 billion a year. Yet thin as it is, this could be the end of a fairly thick wedge. If the plan is accepted, it will mark the EU's first real involvement in defence spending. If it takes off, it might one day point towards doing quite a lot more defence research collectively. Would that be a good thing?
No, say the sceptics, led (surprise, surprise) by the British. We support the idea of European co-operation in defence research, they say, but an EU programme is not the right way to go about it. Britain and France account for about two-thirds of the EU's total spending on research and technology in defence. These are the only countries that matter—and they are already co-operating. For example, they have just started work on small, portable radar systems to be mounted on unmanned drone aircraft.
Anything more than this project-by-project approach, say the British, would be unworkable, because European countries would not commit themselves to defence projects they do not control. Or if it did work, it would widen the military gap between America and Europe. European armies (except the British) tend to be too backward to use the latest American military gadgets (the Iraq war showed that even the British, whose military machine is relatively advanced, cannot fully keep up with the Americans). In any case, the Americans are increasingly loth to share them because they do not trust several European countries with their defence secrets.
As a result, say the sceptics, any EU programme would end up as another pointless piece of top-down bureaucracy; and, if it did not, it would undermine NATO. Which, some mutter darkly, is the real point. Those most hostile to the idea detect a French plot to build up a European research capacity against the day when NATO falls apart. As computer geeks might put it, the challenge to NATO is a feature not a bug in the plan.
Fears like this are not fanciful. NATO is Europe's core security alliance and the EU has always steered clear of defence partly for that reason. Nevertheless, there is a strong case for getting European countries to spend more, and to do so more efficiently. In military technology, most European countries bar Britain and France are a gang that cannot shoot straight. Overall, European countries spend a lot less than America on defence: 1.9% of GDP, compared with America's 3.4%. And they spend only half as much of their money on modernising equipment as America, and about 50% more on personnel costs. For most countries, these differences are likely to get bigger. Given Europe's demographic outlook, it is unlikely that the continent will spend a lot more on defence soon (many governments want to spend less), so the share going to personnel costs could even rise.
That being so, European countries will have to become more efficient if they are to have any hope of narrowing the gap with America. According to the chairman of the European Parliament's defence sub-committee, America is ten times more efficient in its defence spending than Europe—which, given the Pentagon's extravagant wastefulness, must mean that Europe is pretty bad (measures of defence efficiency use such yardsticks as the proportion of combat units ready for deployment).
Collaborating on defence research will not transform European efficiency by itself. EU countries will also have to spend more money modernising defence equipment, and to collaborate more on procurement. But it might help. By forcing countries to identify joint projects, it should cut down on overlap, first in research, then in production (Europe has 25 military shipyards, America four). Existing defence collaborations are bedevilled by conflicting budget cycles (when country A has money for research, country B has none). Such bureaucratic friction has always limited the scope of ad hoc co-operation. Pan-European projects could also make it possible for eastern Europeans to get into defence research. And it should be easier to run EU-wide projects competitively. At the moment, in any ad hoc deal, the work tends to be carved up pro rata among the national champions of the co-operating countries. An EU-wide system might conceivably be run differently, first identifying the project and then awarding the work competitively.
There is no guarantee that any of this would happen, of course. But if it did, EU co-operation could help, not damage, the transatlantic alliance. The biggest long-term threat to NATO comes not from Europe separating from or challenging America's military dominance: such a prospect is fanciful. It comes from chronic internal failure, and from Europe falling so far behind America that the two can no longer co-operate militarily. An EU-wide research programme is only a small part of what is needed to improve Europe's defences. But it is a part.