EU to spend €1.5bn a year on joint defence

It said it should spend a further €1 billion a year on joint procurement of high-technology items such as surveillance drones.

R&D projects would be entirely financed from the EU budget.

The joint purchases, by groups of at least three firms from at least two EU states, would see the EU pay 20 percent of the cost and the participating countries, which would own and operate the assets, pay the rest.

The creation of the so called European Defence Fund was billed as Europe’s response to “the most severe security challenges of the past 60 years” - Russian revanchism and Middle East instability.

The fund was unveiled after the new US president Donald Trump shook faith in Nato last month by refusing to stand by its Article 5 obligation on joint defence.

It was also unveiled as the UK, the EU’s main military power and the main opponent of EU defence integration, prepares to start exit talks.

The Commission and the EU foreign service added in a “reflection paper” also on Wednesday that the fund could in future form part of the bloc’s “common defence and security”.

They said that member states’ defence forces could one day “be pre-positioned and be made permanently available for rapid deployment on behalf of the Union”.

These joint forces, or what eurosceptics have called an "EU army", would launch “operations against terrorist groups, naval operations in hostile environments or cyber-defence action”.

Federica Mogherini, the EU foreign affairs chief, said on Monday that EU states which are also Nato allies would still rely on Nato for territorial defence.

But she said they could also rely on EU help if they were attacked on the back of Article 42.7 of the EU treaty, which stipulates that other EU states have “an obligation of aid and assistance by all the means in their power”.

She noted that France already invoked this after the Paris terrorist attacks in 2015 and that this had led to “concrete actions” in terms of, for instance, intelligence sharing.

Jyrki Katainen, a former Finnish prime minister who is now commissioner for jobs and growth, said EU mutual defence could be of special help in the event of a “hybrid” war that used military and non-military means to attack an EU country.

He said a hybrid attack could see “the media shut down, the electricity [supply] shut down, bank transactions have problems, and all these three issues happen together and maybe there are also little green or grey men or women”.

The phrase "little green men" refers to Russian special forces without insignia which invaded Crimea in Ukraine in 2014 .

France welcomes plan

The EU plan was immediately welcomed by France.

Its armed forces minister, Sylvie Goulard, said on Wednesday the proposed EU defence fund was “a turning point for a better sharing of costs, but also for defence capabilities”.

She added that it would give “political impetus” to the EU’s ambition to become “sovereign” in terms of of its technological and strategic capabilities.

Jens Stoltenberg, the Nato head, also welcomed the EU initiative.

“Stronger European defence … will strengthen the European pillar in Nato”, he said.

The British Conservative Party, some far-left politicians, and arms control NGOs spoke out against the scheme.

Geoffrey Van Orden, a British Tory MEP, said it was an EU "ego trip" that would create "alternative structures [to Nato] that will merely increase the transatlantic divide".

Sabine Loesing, a German far-left MEP, said it was the “start of a very slippery slope” that would lead to an “EU defence budget [that] will presumably be in the hundreds of billions in the near future”.

But the Commission proposals won support from mainstream groups in the European Parliament, who will need to sign off on the fund.

Manfred Weber, a German MEP who chairs the centre-right EPP group, the largest in parliament, said on Wednesday: “This is, after the euro, the second major development for Europe. I believe that common defence is … a must”.

Guy Verhofstadt, a Belgian MEP who leads the liberal Alde group, said: “The proposed European Defence Fund is an important first step towards much needed joint capabilities on defence”.

He said the Commission should have been more bold in its vision of an EU army. “We have to act now, independently and efficiently. That is why I am in favour of … joint action and a real defence union”, he said.

Prototype fund

An EU official noted on Wednesday that the Commission was already allocating €590 million to a prototype of the joint defence fund for the years 2017 to 2020.

The official said the €25 million set aside for 2017 was “something that the Commission had never done before” because in the past it had stayed out of military funding.

The official added that the EU institutions would not get any of their own military capabilities even if the plan went ahead at full pelt.

“Member states are the ones that are going to own the capabilities at the end of the day”, the official said.

The Commission noted on Wednesday that past overlaps and complications in member states’ defence planning had led to waste.

EU states had 36 “defence platforms and systems” in place versus 11 in the US.

It said member states’ joint projects, such as the Eurofighter Typhoon or the Tiger helicopter, had in the past cost too much, taken too long, and had to produce aircraft with too many varied specifications. It said one joint helicopter, the NH90, “had to be developed in 23 versions”.

But it said other projects, such as the Meteor air-to-air missile, which was developed by the UK, Germany, Italy, France, Spain, and Sweden were a “prime example” of how to work together.

It noted that the €590 million for the prototype defence fund would be ripped from the EU’s existing budget for “connecting Europe” (including projects “contributing to sustainable development and protection of the environment”), as well as from the budget for satellite navigation and earth observation, and for resaerch into nuclear fusion.