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Permanent Structured Cooperation

What is the EU’s defence pact PESCO and how can it be retooled?

Unrealised dreams for European defence integration have come in many guises. From the failed European Defence Community of 1954 to the unsuccessful European Security and Defence Union of 2003, such stillborn initiatives have reflected the difficulty of bringing together countries with different defence reflexes, histories and geographies. Defence is a matter of strict national sovereignty too. 

That is what makes PESCO, the European Union’s flagship initiative in defence, so unique – and why a new phase from 2025 could help could help boost intergovernmental cooperation and revitalise the European defence technological and industrial base. The European Defence Agency is part of PESCO’s secretariat, along with the European External Action Service and the European Union Military Staff.. 

Admittedly, the defence pact may not have the snappiest name. (Translated from Italian, 'pesco’ means peach tree.) Its origins are obscure, buried in an article of the Lisbon Treaty.  But Permanent Structured Cooperation, or PESCO, is a reality, legally binding Member States together to meet commitments in raising defence spending, to plan together, and develop capabilities and deploy them together – all while keeping the new assets in the hands of individual armed forces.  

PESCO’s power potential lies in its design. Not all Member States have to participate in every project. But all know that pooling defence capacities makes economic sense. Working in national military silos costs between €25 billion and €100 billion each year, according to the European Parliament’s 2022 defence report. 

Nearly five years on from its inauguration in December 2017, PESCO has a renewed opportunity to contribute to European security, to the European pillar in NATO and avoid financial waste. European Union national defence has spending continued to rise – growing 12% in 2023, according to the latest annual report on the status of PESCO implementation


Since 2018, Member States have come together to research, develop and produce military capabilities across all military domains in PESCO. Two projects, the European Medical Command and the Cyber Rapid Response Teams have reached full operational capacity (FOC) within PESCO. Twenty-two projects are slated to reach FOC in 2025. The European Medical Command and Cyber Rapid Response Teams have already been used or activated in support of EU missions and operations in Ukraine and Mozambique. The medical command was also used during the COVID-19 pandemic. 

PESCO now has 68 projects underway so far in its first phase between 2018 and 2025. 

But PESCO was born in a different era. Since Russia’s unprovoked invasion of Ukraine in February 2022, high-intensity warfare is back in Europe. So it is right to ask: has PESCO been overtaken by events? The EU is urgently retooling its defence industrial base in support of Ukraine. Artillery, air defence, unmanned ground systems, helicopters and air-launched missiles are all in demand.  

PESCO can, of course, boast a significant project on military mobility. Led by the Netherlands and even with involvement by some non-EU countries, the PESCO project invests in infrastructure and transport to speed troops and equipment through EU borders. It also directly contributes to NATO’s capacity for collective defence. 

Yet overall, PESCO remains only a small part of Member States’ contribution to capability development, according to the pact’s own 2023 progress report. To overcome shortfalls in European militaries, more countries need to better coordinate their defence planning. Investing nationally remains the norm, rather than the exception.  

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As Russia’s ongoing war of aggression against Ukraine highlights the need to revitalise the EU’s ability to act, Member States are coming together to reinvigorate PESCO. Spanish Defence Minister Margarita Robles, EU High Representative Josep Borrell and European Defence Agency Chief Executive Jiří Šedivý all called for new energy to be injected into the EU defence initiative at a special conference in September to start reflecting what comes next for PESCO post 2025. 

PESCO does not operate in a vacuum. It is part of the EU’s defence jigsaw that includes the European Defence Agency, the €8 billion European Defence Fund (EDF), the EU Capability Development Priorities (which help identify which assets to produce and procure), the Military Planning and Conduct Capability (MPCC) for EU military missions, and the EU’s defence review, known as CARD. 

As PESCO’s initial period ends in 2025, preparations for PESCO’s Strategic Review have begun to allow for a reinvigorated PESCO from 2026. Areas of focus might be to reverse the decline in research and technology spending, to encourage a prioritisation of European projects, allow more cross-border cooperation of European industry and to encourage a joint and shared use of capabilities.   

Many EU and NATO defence initiatives have had too short a life-cycle, suffering from limited follow up over the years. With defence budgets across Europe increasing, PESCO can again show that it is unique and succeed where others have failed.