Presentations on the current state of the EU's defense industry are being circulated among EU institutions. Amidst the deluge of data, schedules, conclusions and forecasts, we can see just how wide the gap is between the EU and the world's leading companies when it comes to defense spending.
Between 1999 and 2023, Community countries' military spending increased by just 40 percent, while the United States increased its spending by 68 percent over the same quarter-century. But this is nothing compared to Russia and China. Vladimir Putin's government boasted a 523 percent increase, while the Middle Kingdom boasted a 651 percent increase. This best illustrates where the EU is today in terms of defense capabilities.
The same analysis available to EU institutions shows that between 2006 and 2022, member states spent 2% on armaments. An additional €1.8 trillion of GDP will be at our disposal to improve our defense capabilities. In fact, they have allocated only $424 billion in European currency for this purpose. The EU's weakness is also reflected in its share of the world arms market. The EU owns only 13% of it, and the EU's biggest concern, Italy's Leonardo, is only the 13th largest arms company in the world.
These are dire statistics, given the increasingly real Russian threat and the need for the EU to take its own security seriously.
White paper will tell the truth about the EU
The scale of the European defense and arms industry, above all of which needs and priorities are ignored, will be evidenced by the so-called “industry”. European Defense White Paper. This is the document that President Ursula von der Leyen promised Europeans to complete within the first 100 days of the new European Commission. The book is written by Kaja Callas, EU foreign affairs chief, and Andrius Kubilius, EU commissioner for defense and space.
Consider your current budget situation and what you still have room for in it. And since this place doesn't exist at all, this is probably the best indication of where the funding is going
~Brussels officials familiar with EU finances
“The White Paper is primarily aimed at presenting issues in the defense sector, the state of industrial competitiveness and investment needs,” we read in one of the EU communications on the subject. The document prepared by Karas and Cubilius identifies the main geopolitical challenges and analyzes the growing military power of other major world powers, with special emphasis on their ability to respond to emerging threats. It also aims to outline the general framework for EU defense integration. actors.
According to the announcement, the analysis prepared by the EU commissioner supports a European air defense shield, strengthening cybersecurity capabilities, closer cooperation between the EU and NATO, more effective military spending in member states, reducing dependence on external weapons, etc. It is said to provide an answer to the problem. It focuses on investments within the EU and focuses on arms cooperation in the areas of industry, innovation, collective purchasing and production.
100 billion euros for armaments in new EU budget
Everyone in the EU is waiting for the final results of the research by Kai Callas and Andrius Kubilius, but it is already clear to everyone that the situation in the EU is poor from a security and defense perspective. That's why big changes are already on the horizon.
Andrius Kubilius, European Union Defense and Space Commissioner/JOHN THYS/POOL/AFP
In the current seven-year EU budget (equivalent to €1 trillion), a modest €10 billion is allocated to defence. Secretary Kubilius wants to increase this amount tenfold in the new budget projections (2028-34). “We need to prepare for the possibility of a Russian invasion,” he argued in a recent Politico interview. He added: “If we fail in Ukraine, it may naturally increase the likelihood of Russian military aggression against EU member states.”
Kubilius himself acknowledged that such a significant increase in armaments funding would be a huge challenge, and that member states would face long discussions on where to get the necessary funds. But this is a challenge that must be addressed if the EU does not want to fear the future. The former Lithuanian prime minister stressed that the cost of EU countries cutting back on spending on their own national security would be much higher than the seven-year budget of 100 billion euros mentioned above.
For Kubilius' plan to succeed, his relationship with Piotr Serafin, the Polish commissioner in charge of EU finances, will be crucial. Intaria understands that politicians from both countries have already had the opportunity to talk and agree that security and defense are areas that EU countries have neglected for years and cannot afford to make savings.
Serafin's aides look forward to further concrete and fruitful talks with Kubilius. – Create a plan about what initiatives and projects you want to implement and on what scale, where there is a possibility of financing by Member States, where with the EU budget, where with no funding available. I want you to do it. An EU official explained. – Once we have those details, we will be able to sit down and discuss the cost and funding sources for each project, – he says.
security and defense. 500 billion euros “per notebook”
However, Interia's interlocutors in Brussels also highlighted another issue that is of vital importance at this moment. It is one thing to increase defense spending from 2028-34, but the EU must act now because the needs and threats are here and now. Moreover, in the face of changes in the White House, Ukraine will now be more dependent than ever on aid from EU countries.
All of this means further spending is required. The problem is, there's no way to pay for them. Only a small portion of the EU budget has been allocated to defense, and most of it has already been allocated. – What will be needed after spending a new budget that will yield results in 2029 or even 2030, by which time both the war and Ukraine may be over? Immediate action is needed – a senior Polish diplomat leaves no doubt. – Consider your current budget situation and what you still have room for. And since this place does not exist at all, this is perhaps the best indication of the direction of the funding, explains one Brussels official familiar with the EU's finances.
There should be no problem in southern countries. They care about certain things and we care about certain things. There is plenty of room to reach an agreement. The challengers are Dutch and German.
~ Experienced EU diplomat
Poland therefore plans to intensify its diplomatic and political actions during its presidential term in order to convince other community partners of the need to obtain external financing for defense and armament in the coming years. All the more so because it will also help raise money for East Shield, one of Donald Tusk's government's flagship projects. The Polish government estimates the investment budget at 10 billion zlotys, but this is provisional and only covers material costs. In Brussels, it is said that the entire project (materials, widely understood civilian and military infrastructure, equipment, logistics facilities, military personnel) will ultimately cost many times more.
Nevertheless, sources in Brussels argue that the chances for common financing are great, as understanding of the project is common, especially among regional countries. The Eastern Shield could also extend to other countries on the eastern flanks of the EU and NATO.
But for this to happen, the EU first needs to raise additional funds for defense. Interlia has learned that options currently being considered include co-financing (as during the coronavirus pandemic), issuing Eurobonds, increasing military spending in member states' budgets, or raising finances on defense funding. This is a relaxation of the system. by EU countries (actually beyond EU budget limits).
Ursula von der Leyen, President of the European Commission/AFP
The amounts involved are substantial. Sources in Brussels say it will total 500 billion euros over the next few years. The problem is finding the necessary majority within the EU to obtain new funds, perhaps through loans, not to mention consensus. It is an open secret that perceptions of the Russian threat vary widely across EU countries, for example in the eastern and southern parts of the European Union.
Information obtained by Intel also indicates that building such a durable majority will be one of the biggest challenges in Poland's EU presidency, which begins in January. Currently, Poland's position is supported by the Baltic states and the Nordic countries, which historically belonged to the so-called European countries: Denmark, Sweden and Finland. A group of misers, countries that are extremely reluctant to increase spending in the EU budget, let alone raise money from outside.
The biggest challenges are, surprisingly, not the southern EU states, but the Netherlands and Germany. The Dutch belong to the “miser group” already mentioned, and have also been ruled by a Eurosceptic government for several months. Meanwhile, Germany is preparing for early parliamentary elections and no one wants to hear about EU defense funding.・There should be no problem in southern countries. They care about certain things and we care about certain things. There is plenty of room to reach an agreement. The challenge lies with the Dutch and the Germans, an experienced EU diplomat told Intalia.
“Event”: Ursula von der Leyen speaks about the new European Commission/Porsat News/Porsat News
