There is a growing consensus that Europe needs to do more to protect its interests and values globally. The adoption of the EU Global Strategy (EUGS), the Commission’s European Defence Action Plan and the activation of the Treaty of Lisbon articles on Permanent Structured Cooperation (PESCO), all point in this direction. Member States are giving more importance to defence issues, as demonstrated by increases in defence expenditure and renewed interest in multinational cooperation. 

Whilst the benefits of multinational cooperation were never disputed, concrete measurable progress remained difficult to track, in particular due to the lack of a shared tool capturing collaborative efforts at the European level. By adopting the Implementation Plan of the EUGS, Member States agreed to create the Coordinated Annual Review of Defence (CARD) as a means of fostering increased consistency between national defence plans from a European perspective and promoting more systematic defence cooperation among Member States.


Shaping the CARD concept in a changing EU defence context

On 18 May 2017, the Council of the EU endorsed the modalities to establish the CARD and launched the CARD Trial Run. Over the following months, EDA collected all available information on Member States’ defence ex penditure and capabilit y development efforts, grouping it along the three lines indicated in the Council conclusions: (i) Member States’ aggregated defence plans, (ii) the implementation of the EU Capability Development Priorities, and (iii) the development of European cooperation.

The information gathering phase was followed by bilateral dialogues between Member States and EDA, supported by the EU Military Staff (EUMS), aimed at clarifying, validating and completing the data compiled by EDA in each Member States’ CARD Initial Information Document. The consolidated data, aggregated at EU-level, provided the basis for the analytical work that resulted in the CARD Aggregated Analysis presented to Member States’ Capability Directors in June 2018.

The CARD Trial Run Report, which derived from it, reflects the main findings and conclusions, including dedicated contributions from the EU Military Committee (EUMC), as well as recommendations and preliminary lessons learned. The European capability landscape which emerges from the report offers a view of what Member States collectively achieve, including future trends at the European level. This view is enhanced through the coherence with NATO defence planning activities, as nearly all Member States invited EDA and the EUMS to attend review meetings of the NATO Defence Planning Process (NDPP) or the Partnership for Peace Planning and Review Process (PARP) and made their replies to the NATO Defence Planning Capability Survey questionnaires available to both EU institutions.

The EDA Steering Board encouraged Member States to implement the recommendations of the CARD Trial Run Report, including in the development of the ‘Strategic Context Cases’ (SCCs) for the implementation of the 2018 EU Capability Development Priorities, and tasked the Agency to forward the report to the Council with a view to confirming the CARD as a standing activity and launch the first full CARD cycle in autumn 2019.


CARD Trial Run findings

The CARD Trial Run findings confirmed that there is a positive trend regarding the overall defence spending of the 27 participating Member States over the 2015-2019 period, although in real terms defence expenditure in 2017 still remained below the 2005 level. 

Investment in general, and procurement expenditure in particular, are increasing across Member States, but at a very different pace and scale. The 20% collective investment benchmark was reached in 2016 and defence investment will likely continue to increase further, representing some €47 billion of investment in 2017. However, 12 Member States represent 81% of the total EU defence investment. 

Investment in defence research and development has decreased from 23.5% of total investment in 2015 to 21% in 2017 and is estimated to decrease further over time. The fact that the collective benchmark, aiming at 2% of total defence spending being invested in defence Research & Technology (R&T), has never been reached raises concerns regarding the long-term European technological innovation capacity, being driven by only eight Member States, representing 95% of European defence R&T expenditure. 

Over the 2015-2020 period, one quarter of Member States allocated more than 50% of their defence investment to the Priority Actions from the 2014 EU Capability Development Plan (CDP), while the vast majority of investments supporting these priorities were allocated to national projects. 

The EU Military Committee’s contribution to the CARD Trial Run established that the EU does not have available all of the required military capabilities necessary for the implementation of the EU CSDP military Level of Ambition (LoA) derived from the EU Global Strategy. These deficiencies are reflected in two sets of High Impact Capability Goals (HICG), addressing major shortfalls in the short-term and medium term. The level of Member States’ deployed forces in CSDP and non-CSDP operations and missions remained rather constant over the last three to four years, with an average level of 48,000 troops, although there is a disparity between Member States in terms of type of operation, engagement framework and overall operational effort. While defence expenditure related to operational activities remained stable, representing some 3.5% of Member States’ total defence budget, there is room for further enhanced cooperation between Member States. 

Data shared by 12 Member States show a steady increase in relative terms in the collaborative dimension of capability development, from 24% in 2015 to nearly 31% in 2017. Data shared by 15 Member States shows that the collaborative part of European Defence R&T expenditure remained around 11% between 2015 and 2017 but decreased by 6% in absolute terms.

Tailored collaborative opportunities presented to individual Member States were well received. The top collaborative areas retaining Member States’ interest were Short Range Air Defence (SHORAD), armoured vehicles (including main battle tanks), helicopters (light and medium), medical support, cyber defence, satellite communications, tactical Unmanned Aerial Systems (UAS), maritime mine countermeasures and maritime security. All these collaborative opportunities are linked to the recently approved 2018 EU Capability Development Priorities. 

Trial Run conclusions, recommendations and preliminary lessons identified 

The conclusions of the CARD Trial Run can be summarised as follows: 

● the bilateral dialogues were particularly well received by Member States as evidenced by reactions in the various fora where the aggregated analysis and the report were presented. These meetings allowed Member States, EDA and the EUMS to engage in discussions on collective defence expenditure, operational commitments, the implementation of EU Capability Development Priorities and potential collaborative opportunities;

● the CARD made use of all information available to EDA in view of limiting – to all possible extents – additional requests for information to Member States, thereby reducing the administrative burden on Member States. Some gaps were identified, particularly with respect to forward-looking financial information, highlighting the need for accurate and high-quality data to drive the analysis;

● the CARD Trial Run highlighted the fact that Member States still carry out defence planning and acquisition mostly from a national perspective. The EU needs to move from ad hoc multinational projects towards a systematic and structured alignment of Member States’ defence planning. Member States do cooperate, but an accurate and comprehensive EU overview on which areas, to what extent and with whom, is still lacking. 


CARD Trial Run recommendations on the European defence expenditure landscape 

Pursuing further consistency in defence spending and promoting a European technologically innovative capacity, the CARD Trial Run recommendations on the European defence expenditure landscape propose that Member States include in their multi-year defence plans voluntary national objectives regarding the annual growth rates of their defence budget and R&T expenditure, as well as concrete measures aimed at rebalancing defence expenditure in favour of investment programmes and enhancing their participation in collaborative projects. 

CARD Trial Run recommendations on the European capability development landscape

The recommendations focusing on the European capability development landscape propose that participating Member States aim for greater coherence between their national capability development plans, including on timelines, engage more in cooperative activities, and consider channelling invest ment s on medical capabilities into ensuring a European capability in support of Common Security and Defence Policy (CSDP) operations.

The report also invites Member States to enhance their participation in European collaborative projects, notably making best use of the recently established EU defence initiatives such as PESCO, the Preparatory Action on Defence Research (PARD), the European Defence Industrial Development Programme (EDIDP) and soon the European Defence Fund (EDF).

Preliminary lessons identified

Preliminary lessons identified focus on the mutual benefits of the CARD bilateral dialogues, the challenging timelines of the CARD Trial Run and potential improvements in data collection, especially with regard to forward looking financial data and collaborative expenditure. Furthermore it is acknowledged that the coherence of output between the CARD as well as the Capability Development Plan, and respective NATO processes, such as NDPP has been and will continue to be ensured where requirements overlap, while recognising the different nature of the two organisations and their respective responsibilities. 

CARD as the cornerstone of recent EU security and defence initiatives 

“The CARD is an essential intermediate step in the overall EU capability development process”, stresses EDA Chief Executive Jorge Domecq. Several new EU security and defence initiatives where launched quasi simultaneously – the CDP revision, CARD and PESCO. The coherence between these initiatives must be ensured and the way they affect each other is not only to be understood but purposefully planned. 

“A coherent approach from priority setting to output is important and adequate sequencing is critical to ensure that the different steps of the overall approach reinforce each other. In a somewhat simplistic manner, we could say that the CDP tells us what to focus our common efforts on, the CARD gives us an overview of where we stand and identifies next steps, PESCO in turn gives us options on how to do it in a collaborative manner, while the EDF could provide the funds to support the implementation of cooperative defence projects in general, but with a bonus, if in PESCO”, Mr Domecq explains. 

‘Pathfinder’ for cooperation opportunities 

The CARD introduces a monitoring mechanism, driven by Member States and one of the major expectations of the CARD is to act as a pathfinder in the identification of opportunities, where Member States can join their efforts in collaboratively developing or procuring defence assets. The CARD will be built-up incrementally over time and will play a crucial role in providing a comprehensive picture of Member States’ defence plans and capabilities, the state of play regarding collaboration, as well as progress towards EU priorities. It will help identify Member States’ needs through a structured review process which can lead to cooperative projects. This is the point where the CARD connects to PESCO.

Under PESCO a lot has been done in a very short timeframe. It is however important to underline that PESCO is much more than an umbrella for projects, it is primarily about common planning, increasing spending, collaborating more, and using existing capabilities, if needed, all in a structured and more efficient manner.

The third initiative, the European Defence Fund, which provides major EU-funding to defence projects for the first time, is not yet in its full cycle. While the research window is already in its test phase with the Preparatory Action, the capability window will do the same with the start of the European Defence Industrial Development Programme (EDIDP) next year.

“Even if we ensure that all these three initiatives are smoothly coordinated and harmonised, and Member States commit to work along these lines, there is one element which is indispensable for coherent capability development at European level, and that is Common Priority Setting through the Capability Development Plan, which must be the baseline for CARD, PESCO and EDF,” underlines Jorge Domecq. 


Towards the first full CARD cycle in 2019  

The CARD Trial Run will provide a baseline for subsequent iterations of the review. Work accomplished until now will be discussed with all relevant stakeholders to understand the necessary lessons learned. Under the auspices of the Austrian Presidency of the Council, a workshop on lessons identified will take place at the end of 2018. A second workshop is planned for early 2019, under the auspices of the Romanian Presidency of the Council, will address the methodology for the first full CARD.

The first full CARD cycle will be based on the 2018 EU Capability Priorities, which encompass the entire capability spectrum and have a wider scope than the 2014 CDP Priority Areas which were used as the reference for the CARD Trial Run. Greater attention will be paid to prioritisation, notably in relation to R&T. 

Concrete efforts aimed at raising Europe’s global role are underway. A prerequisite to reaching the level of ambition defined in the EUGS is instilling greater coherence in the way Member States plan and develop capabilities. The CARD offers Member States a tool to increase consistency between their national defence plans from a European perspective and to engage more systematically in defence cooperation.