30th Nov 2022


How coronavirus might hit EU defence spending

  • If things remain as the status quo, neither the EU as a whole, nor individual member states, would be ready to face external and internal threats (Photo: MelkiaD)

The economic consequences of the Covid-19 global pandemic are alarming.

The IMF estimated a collapse of the global economy by three percent in 2020 and the forecast for the European Union is also worrisome.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

According to the Spring economic forecast, the economy will shrink by seven percent in 2020.

Among the casualties of coronavirus - worldwide and in the EU - is the defence sector.

South Korea and Thailand have already suffered budget cuts, but the impact of the crisis on the defence sector seems to be inevitable.

While decisions have not been made yet by member states, the EU Commission has already halved the European Defence Fund (EDF) to €6bn over seven years, while a military mobility plan worth €6.5bn was entirely discarded.

However, the Covid-19 pandemic has not made the world a less dangerous place and there is no alternative to having a functioning defence system in place.

With the situation in the Middle East/North Africa (MENA) region escalating, the ever more assertive global role for China, the growing area of influence of the Russian Federation as well as the looming threat of climate change driven crisis, the EU needs to have an operational defence system.

Whereas countries face a daunting challenge of having to choose between defence and social programmes, the European Union enjoys a privileged position since it can reduce spending while increasing functionality.

We argue that a rationalisation of spending through the Europeanisation of defence systems seems to be more appropriate than budget cuts at the member state level, for at least three reasons.

Spend - but rationalise

First, the Europeanisation of resources would translate into massive savings in times of crisis. In 2019, EU members spent roughly €203bn on the military sector.

This combined allocation is second only to military spending of the US ($640bn, €585bn) and China ($250bn). However, the fragmentation of defence systems undermines the effectiveness and the efficiency of armed forces.

Every year, between €25 and €100bn are lost because of the inefficient current system, organised with little coordination, as 80 percent of procurement and more than 90 percent of research and technology are developed on a national basis.

The EU Commission estimated that by increasing EU cooperation, countries would save up to 30 percent of annual expenditures in these sectors, leading to more coordination of the defence forces and Research and Development (R&D), while boosting technological innovation through resource-sharing.

Second, the fragmentation of EU defence in national systems structurally undermines the military capabilities of the EU as shown in the interventions (or lack thereof) in Kosovo and Libya (just to mention some).

Instead, pulling and sharing defence budgets is likely to benefit from economies of scale and centralised R&D, which have the indirect implications of also enhancing force interoperability.

The gap between what we spend now, what we could spend, and how much we could achieve by pulling resources together is rather astonishing.

Yet, there are talks about saving by cutting on the EDF, but bridging this gap through EU cooperation only means saving money and increasing output.

A centralised EU defence infrastructure would be built on the already existing Permanent Structured Cooperation (PESCO) and EDF framework.

This means to lay the foundation for a common market for research and development at the European level.

Duplication and overlap

Investing in the EDF would put a stop to the overlapping and duplication of European military goods, focus on responding to new defence needs (e.g. cybersecurity and space) and increase the overall capability of individual states.

The European Defence Industrial Development Programme, the Eurodrone (Medium Altitude Long Endurance Remotely Piloted Aircraft System/MALE RPAS) and OCEAN2020, are already a sign that a unified defence strategy leads to economic benefits and trickle-down effects.

For example, with the commission's support and coordination under PESCO, 47 projects are being developed, from training, to cyber. Member states should continue benefiting from this structure.

Third, defence spending is, ultimately, a public investment.

Given the global recession that is about to hit the globe and, especially Europe, a stream of targeted public investment could have a very positive strategic impact.

With higher chances for technological innovation, there would be a more resilient union to symmetric shocks (such as the one of the pandemic).

If things remain as the status quo, neither the EU as a whole, nor individual member states, would be ready to face external and internal threats.

It took a global pandemic to take seriously the proposal to give more financial resources to the European Commission with the Recovery Fund, maybe this is also the moment for pulling and sharing in the defence sector.

One of the first steps towards the creation of a European Community was the Pleven Plan in 1952, which failed after two years only because the French Parliament rejected it.

We hope that Covid-19 will bring the discussion back on the table. The world in the 21st century is not less dangerous than in the past and the EU needs to be ready for it.

Author bio

Francesco Giumelli is a associate professor in international relations at the University of Groningen. Chiara Magrelli is a research associate at the University of Groningen. They are working on the European Defence market under the EIBURS scheme of the European Investment Bank (EIB) Institute.


The views expressed in this opinion piece are the author's, not those of EUobserver.


Why the EU can't do security and defence

What if the EU can't guarantee European security? In times when US physical presence does not make up for its mental absence, the question got urgent.

Brexit raises questions for EU defence integration

Brussels' current vision for cooperation on defence, where third countries can contribute but have no say in decision-making and in the guidance of operations, is unlikely to be attractive to the UK.


EU marathon summit plus security policy This WEEK

EU leaders resume their summit over the long-term budget and recovery fund, after a fruitless weekend of meetings in Brussels. Meanwhile, the European Commission is to present a new security strategy for the EU plus several action plans.


EU easing lockdowns, counting costs This WEEK

"Freedom is the rule," in Belgium, the EU institutions' home, from Monday, when bars and cafes reopen. But 90 percent of EU talks - on economic rescues and Africa diplomacy - to stay online.

EU Commission slammed for Covid-19 'mid-threat' ranking

The European Commission classified on Wednesday the coronavirus as a "mid-level" threat to workers, drawing criticism from socialist lawmakers and trade unions because the decision allows businesses to apply less stringent safety measures in the workplace.

A missed opportunity in Kazakhstan

Tokayev received congratulations on his election victory from presidents Xi, Putin, Erdogan, and Lukashenko. However, the phone in the Akorda, Kazakhstan's presidential palace, did not ring with congratulatory calls from Berlin, Paris, London, or Washington.

News in Brief

  1. 'Pro-Kremlin group' in EU Parliament cyberattack
  2. Ukraine will decide on any peace talks, Borrell says
  3. Germany blocks sale of chip factory to Chinese subsidiary
  4. Strikes and protests over cost-of-living grip Greece, Belgium
  5. Liberal MEPs want Musk quizzed in parliament
  6. Bulgarian policeman shot dead at Turkish border
  7. 89 people allowed to disembark in Italy, aid group says
  8. UN chief tells world: Cooperate on climate or perish

Stakeholders' Highlights

  1. Nordic Council of MinistersCOP27: Food systems transformation for climate action
  2. Nordic Council of MinistersThe Nordic Region and the African Union urge the COP27 to talk about gender equality
  3. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  4. Friedrich Naumann Foundation European DialogueGender x Geopolitics: Shaping an Inclusive Foreign Security Policy for Europe
  5. Obama FoundationThe Obama Foundation Opens Applications for its Leaders Program in Europe
  6. EFBWW – EFBH – FETBBA lot more needs to be done to better protect construction workers from asbestos

Latest News

  1. Nato renews membership vow to Ukraine
  2. Catalan spyware victims demand justice
  3. Is the overwhelming critique of Qatar hypocritical?
  4. EU carbon-removal scheme dubbed 'smokescreen for inaction'
  5. EU lawmakers under pressure to act on 90,000 asbestos deaths
  6. Post-COP27 optimism — non-Western voices are growing
  7. Legal scholars: Prosecuting Putin 'legally problematic'
  8. A missed opportunity in Kazakhstan

Stakeholders' Highlights

  1. European Committee of the RegionsRe-Watch EURegions Week 2022
  2. UNESDA - Soft Drinks EuropeCall for EU action – SMEs in the beverage industry call for fairer access to recycled material
  3. Nordic Council of MinistersNordic prime ministers: “We will deepen co-operation on defence”
  4. EFBWW – EFBH – FETBBConstruction workers can check wages and working conditions in 36 countries
  5. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online
  6. European Centre for Press and Media FreedomEuropean Anti-SLAPP Conference 2022

Join EUobserver

Support quality EU news

Join us