Quo vadis EDA?

Since  its  creation  in  2004,  expectations  about  the  future  of  EDA  were  high.  The  founding  fathers  had  learned  from  the  past  to  avoid  a  stove-piped  institution  solely  focussed  on  one  single  area  of  capability  development,  such  as  research  and  technology  (R&T).  No,  EDA  would  encompass  the  whole  chain,  from  demand  to  supply.  This  was  reflected  in  EDA’s  original  structure  with  four  Directorates:  Capabilities  (setting  requirements);  R&T;  Armaments;  Industry  &  Market.  Based  on  the  assessment  of  Europe’s  military  capability  shortfalls,  R&T  projects  would  be  launched  and  armaments  procurement  programmes  initiated,  involving  European  defence  industries  as  early  as  possible  to  ensure a capability-driven approach.

It sounded too good to be true

Indeed,  reality  turned  out  to  be  different.  Most  of  EDA’s  achievements  have  been  realised  in  what  was  originally  considered  as  ‘low-hanging  fruit’:  organising  training  programmes (helicopters, transport aircraft, air-to-air  refuelling,  unmanned  aircraft);  pooling  acquisition  by  Member  States,  for  example with regard to commercial satellite communication services; or launching portals  and  tools  to  assist  Member  States  and  EU  actors  in  defence  planning,  operations and other activities.

There are many other EDA projects and their importance should not be underestimated. Nevertheless, the number of large equipment procurement programmes, initiated by EDA, is just a single digit figure. The pooled acquisition of the Multi-Role Tanker Transport (MRTT) aircraft, now by five European countries, is an example. For the development of the Medium Altitude Long Endurance Remotely Piloted Aircraft System (MALE RPAS), initial work was also conducted in the EDA framework. However, even for these multinational acquisition programmes there is almost no visibility of the Agency’s involvement. EDA conducts the upstream work of initiating and facilitating such European collaborative capability projects while the Bonn-based Organisation Conjointe de Coopération en matière d’Armament (OCCAR) manages the development and acquisition programmes downstream. Recent initiatives, such as the Franco-German Future Combat Air System and the Main Ground Combat System projects, were launched outside the EDA context.

Small Agency

In  2019,  EDA  is  still  a  small  Agency  in  terms  of budget and staff. It is worth looking back at what the original expectations looked like.  At  the  end  of  2005,  the  first  full  year of  EDA’s  existence  with  a  budget  of  €21.2  million,  the  staff  headcount  was  80.  In  the  summer  of  2005,  Nick  Witney,  EDA’s  first  Chief Executive, asked all personnel present at  an  internal  meeting  to  provide  their  forecasts  on  the  numbers  of  staff  and  the  Agency’s budget in 2008. The average score was  150  staff  members  and  a  €40  million  budget. At the time, this was considered as a realistic outcome, somewhere in the middle between  the  optimistic  and  pessimistic  forecasts.  The  2019  budget  figure  is  even  lower  (€32.5  million),  while  the  number  of  staff (around 170 today) barely exceeds the 2008  forecast.  It  is  interesting  to  compare  EDA  with  Frontex,  the  European  Border  and  Coast Guard Agency. Frontex started in 2005 with  a  budget  of  €6  million;  in  2018  it  had  risen  to  €320  million.  It  now  employs  320  personnel and the number will grow to 1,250 by 2021. Thus, compared to Frontex, EDA has experienced a very limited growth-path.

An underused Agency

EDA’s performance should not be measured by  the  size  of  its  budget  and  staff,  though.  Member  States  were  right  in  opposing  institution-building as a goal in itself. Output should  be  the  benchmark,  it  was  often  stated. Unfortunately, results only partly materialised  as  most  Member  States  were  reluctant  to  use  the  Agency  for  seeking collaboration on R&T and armament procurement  programmes.  The  figures  speak  for  themselves:  at  the  end  of  2018,  EDA’s R&T portfolio amounted to €274 million in projects and programmes stretching over several  years.  The  collaborative  European  Defence  R&T  expenditure  as  a  percentage  of  the  total  Defence  R&T  budgets  has  gone  down  from  its  peak  of  16.6%  (2008)  to  8%  (2017),  far  away  from  the  20%  benchmark  agreed  by  Ministers  of  Defence  in  2007.  For  European  collaborative  defence  equipment  procurement,  the  benchmark  is  35%  of  the  total;  EDA  data  show  that  European  countries only spent 16.8% together.

Conclusion:  a  big  gap  continues  to  exist  between  political  statements  on  the  need  for European defence cooperation, and daily practice. Despite all the initiatives taken after the  launch  of  the  EU  Global  Strategy  in  2016  – such as the Coordinated Annual Review on Defence  (CARD)  and  Permanent  Structured  Cooperation  (PESCO)  –  the  ‘dating  house’  for  collaborative  investment  to  improve  European military capabilities remains largely underused.  Even  more  worrying  is  that  the  2017-2018  CARD  trial  run  has  shown  that  three quarters of Member States allocated less than 50% of their defence investment to priority actions stemming from the Agency’s Capability  Development  Plan.1  If  in  the  past  fifteen  years  the  majority  of  European  countries  have  not  implemented  what  their  Defence Ministers have subscribed to, will it happen in the future?

Change is needed

Europe’s security is endangered by a complex set of threats and challenges which require well-coordinated responses by all actors involved, nationally through a whole-of-government approach or even a whole-of-society approach, and internationally by the coordinated efforts of the two leading organisations: EU and NATO. Looking at all the available instruments that are needed for integrated responses, the military element is most underdeveloped. The European capability shortfalls, which were listed at the start of the European Security and Defence Policy in 2000, still exist today despite improvements in areas like strategic transport, intelligence and reconnaissance. Others have been added, from cyber capabilities and artificial intelligence applications to high-end fighting power. The latter has returned prominently on the priority list due to the threats that Europe is facing, to its East in particular. There is no lack of priorities, but there is a lack of solutions. In the meantime, US President Trump is increasing the pressure on European countries by asking them to share the defence burden more equally with the United States.

The new framework

In  recent  years,  important  new  initiatives  have been launched under political pressure to  improve  European  defence  capabilities,  both  in  the  EU  and  NATO.  In  the  EU,  the  famous  trio  of  CARD,  PESCO  and  the  EDF  (European  Defence  Fund)  now  provide  the  framework  for  European  military  capability  development.  In  particular,  PESCO  and  the  EDF  have  been  labelled  as  ‘game  changers’.  PESCO  marks  the  transition  from  ’voluntarism’  to  ‘commitment’  and  the  EDF  is  a  revolutionary  step  of  making  the  Union  budget available for defence investment.

Nevertheless,  the  question  may  be  asked  whether  these  breakthrough  initiatives  will  deliver  a  quantum  leap  in  European  military  capability development. Member States have  the  lead  in  PESCO:  a  justified  principle  as they own the capabilities and they decide on their national participation in multinational military  operations.  Yet,  based  on  the  same  principle,  project  selection  may  be  driven  by  national  needs  rather  than  European  capability shortfalls.

The  34  PESCO  projects,  launched  so  far,  constitute  a  mixed  bag.  If  they  were  fully  implemented,  the  most  pressing  European  capability shortfalls would continue to exist. The  EDF  offers  great  potential  to  stimulate  collaborative capability development programmes  as  the  Fund  makes  cross-border cooperation a precondition for investing money from the Union budget for  defence.  An  important  aim  of  the  EDF  is  to  strengthen  the  European  Defence  Industrial  and  Technological  Base  (EDTIB),  as  underlined  in  the  Commission’s  EDF  publications.  The  selection  of  projects  and  programmes  in  the  pilot  programmes  –  the  Preparatory Action on Defence Research (2017-2019)  and  the  European  Defence  Industrial  Development  Programme  (2019-2020) – is in accordance with the capability priorities  as  defined  in  EDA’s  Capability  Development Plan.

euSo far, so good. But the risk of an industry-driven selection process will not automatically disappear. Throughout the EDF’s full lifetime, which is up to 2027, the capability-driven approach will have to be ensured. In that context, it is not comforting to read in the EDF (draft) Regulation that EDA will have observer status in the programme committees.

At the centre

If  the  EU  Member  States  were  to  take  European  military  capability  development  seriously  –  not  only  in  declarations  and  Council  conclusions  but  also  in  practical  collaborative programmes – then EDA should be  fully  used  for  that  purpose.  This  would  imply  at  least  three  key  changes  to  the  current situation.

• First ,the Agency should be the central place  where  the  defence  investment  of  the  Member  States  is  monitored  and  assessed, based on the capability priorities stemming from the Capability Development Plan.  CARD  and  EDA’s  (shared)  secretariat  role  in  PESCO  offer  the  necessary  tools.  They  have  to  be  used  fully  and  should  be  further enhanced as required. Equally, EDA should play such a role for EDF investment, from  the  start  in  the  programme  selection  committees  by  ensuring  the  capability-driven approach and throughout the programme implementation phase.
• Second,the whole chain of capability development – from setting common requirements to the production of equipment – should be managed under one roof. With too many actors in the chain, the door is open for deviating from the original definitions of operational and technical requirements during the downstream phases of capability development. We have seen it in the past. Commonly procured ships, vehicles and helicopters look the same on the outside but they are often very different on the inside – thus restricting the potential for interoperability and cost saving both for production and during the through-life maintenance period. In this context, the merging of OCCAR and EDA should be investigated. Multinational programme organisations outside the EU could be connected to EDA for reporting and assessment.
• Third, Member States should consider a serious growth path for the Agency’s budget and staff when they express the political will to use EDA to the maximum extent. It is not about duplication with NATO nor about unwanted EU institution-building. EDA is the Defence Agency of and for the Member States. If they want to be in the driving seat, then they have to entrust EDA with the appropriate resources. The Agency has already been given new tasks in recent years – such as for implementation of CARD and PESCO – without any increase in the budget. Now, it is time to address the issue of resources in an output-related manner, not on the basis of ideology or politics. It will simply be impossible for the Agency to conduct the increasing amount of work without additional staff and money.

Naturally,  making  EDA  the  real  centre  of  European  capability  development  should  not  be  done  in  isolation  from  NATO.  Since  the  CDP  is  already  defining  European  capability priorities beyond the needs of the Common  Security  and  Defence  Policy,  it  is  not  too  difficult  to  synchronise  capability  development  with  the  NATO  Defence  Planning  Process.  Equally,  this  applies  to  monitoring and assessment.

The way ahead

The  one-liner  of  the  first  EU  High  Representative  and  Head  of  the  Agency,  Javier Solana, ‘to spend better and to spend more together’ is as relevant as it was in the early years of EDA’s existence.

The  years  of  austerity  (2010-2014)  resulted  in a certain renationalisation of defence planning  and  programming.  Across  Europe  defence budgets are now rising again. Under President Trump, the US pressure on Europe to  contribute  more  to  its  own  defence  has  been stepped up considerably. NATO remains fundamental  to  European  security,  but  the  Alliance’s  future  is  becoming  increasingly  dependent on Europe’s contribution. The fragmentation  of  European  capability  development  has  to  stop.  Just  pumping  more  money  into  defence  is  not  enough.  It  can even lead to further fragmentation and a waste of resources.

Spending  better  and  spending  more  together implies coordinated defence planning  and  maximising  collaborative  investment in order to increase interoperable forces  and  standardised  equipment.  This  cannot be done solely between the capitals. It needs a European house. EDA was created for that purpose fifteen years ago. Let us use it to its full extent.