European Union

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Europe needs to take more responsibility for its own security, and look not just to the war in Ukraine but face up to future threats, Head of the European Defence Agency (EDA), High Representative Josep Borrell said on Thursday. Speaking at EDA’s annual conference in Brussels, Borrell called on Member States to cooperate more to equip Member States with the defence capacities the European Union needs.

At the forum, “Investing in European Defence”, Head of Agency Borrell said the EU was also at a turning point in defence spending, after the EU’s Member States surpassed the €200 billion-level in 2021 for the first time. Borrell presented EDA defence data for 2021.

“After the Cold War, we shrunk our forces to small-size armies without coordination … We lack critical defence capabilities,” Borrell said. “We have to compensate years of underspending”, he told the conference.

“Total defence expenditure that Member States have announced will grow by another €70 billion in the next three years,” Borrell said. “But people don’t fight with banknotes. There’s a lot of work to be done. This is going to be a challenge to spend this money in a coordinated manner. If our national decisions are only focusing on present needs … it will be again a fragmented European capability landscape.”

Speaking to the EU defence community, with some 300 participants at the Brussels venue and many more following online, Borrell said we need to find the right balance between responding to present needs and preparing for future threats.

Borrell outlined the positive trends but underscored the risks. “We are facing real threats, close by and likely to get worse,” Borrell said.

EDA READY TO SUPPORT PROCUREMENT

Defence investments in the EU reached a record level of €52 billion in 2021, making up almost a quarter of total defence spending. For the third year in a row, EU Member States collectively met and went beyond the 20% agreed benchmark. Nineteen Member States reached the benchmark, the highest number since EDA started collecting data, and five more than in 2020.

But even if collaborative defence equipment procurement rose to 18% of total spending on equipment from 11% in 2020, “we are still far below the 35% agreed benchmark,” Borrell said.

Borrell told the conference that EDA stands ready to support the actual procurement, or even act as contracting agent, if Member States so wish. The Agency has the legal basis and experience to do so

The EU needs to address short term needs by investing and procuring jointly. “Put simply: buying more together,” Borrell said.

EDA Chief Executive Jiří Šedivý also told the conference that Europe must ramp up its capacity to act militarily – because EU citizens want it. “Our citizens want and expect us to act. A recent flash Eurobarometer survey that three quarters of Europeans say that ‘we need grater military cooperation within the EU.’

Caisse nationale d’assurance pension
Freedom of movement for persons
Cross-border workers are not required to have registered in Luxembourg a civil partnership (PACS) that was entered into in another Member State

Brussels, 8 December 2022. The European Defence Agency (EDA) has today published its annual Defence Data report for 2020-2021, detailing defence spending by the 26 EDA Member States. In 2021, total European defence spending stood at a new high of €214 billion, marking a further 6% increase on 2020 and the seventh year of consecutive growth. EDA’s report finds that Member States are investing more than ever on the procurement of defence equipment and research and development with a 16% rise compared to 2020, totalling a record €52 billion.

RECORD EUROPEAN DEFENCE EXPENDITURE & INVESTMENT

At €214 billion, total defence expenditure corresponds to 1.5% of the 26 EDA Member States’ gross domestic product (GDP), the same as recorded in 2020. The 6% rise in spending compared to 2020, marks the strongest yearly growth rate since the rebound started in 2015 following the financial crisis. Compared to the historic low reached in 2014, defence expenditure has increased by almost €52 billion, or 32% in real terms.

EDA’s Defence Data report finds that the sustained increase in overall spending is also reflected in national numbers. In 2021, of the 18 Member States who increased spending, six raised it by 10% or more. The highest increases amounted to more than €4 billion by Italy in absolute terms and a 42%, 33% and 27%, increase in relative terms by Finland, Greece and Slovenia respectively. However, eight Member States reduced spending, with the largest national cut standing at 15% in relative terms.

EDA’s Defence Data report concludes that defence expenditure has globally resisted the economic impact caused by the COVID-19 pandemic. Member States’ announcements following Russia’s war of aggression against Ukraine signals that the increases in expenditure are likely to continue in the years ahead.

HR/VP and Head of the European Defence Agency Josep Borrell said: “European defence cooperation has come a long way. However, too little is spent in cooperation. As Member States increase their defence expenditure in defence, cooperation must now become the norm. We have built the cooperation frameworks to make this happen. Spending alone is not enough, we need to do it better, and that means doing it together. This is the only way to effectively equip European armed forces for the challenges ahead.”

REBOUND IN COLLABORATIVE EUROPEAN DEFENCE SPENDING 

The significant increase in defence spending has also translated into an appreciable rise in collaborative European spending, but still well below agreed collective benchmarks. In 2021, Member States allocated a record €7.9 billion to European collaborative defence equipment procurement projects, almost double the €4.1 billion recorded in 2020.

Spending on European collaborative defence equipment procurement in 2021 accounted for 18% of total defence equipment procurement, an increase on the 11% in 2020. A contributing factor is also the higher number of Member States who provided data in 2021 compared to 2020. The 35% European collaborative defence equipment procurement benchmark, which is also a commitment under the Permanent Structured Cooperation (PESCO), remains out of reach and will require almost doubling current investment in this area to reach the benchmark, which translates to €15.1 billion.

EUROPEAN DEFENCE SPENDING - 2021 KEY FINDINGS

EDA’s report, based on data voluntarily provided by 26 Ministries of Defence, also finds that total defence expenditure represented 2.9% of total government expenditure. Additional findings include:

• Of the €52 billion spent on defence investments, 82% or €43 billion were used for equipment procurement and 18% or €9 billion for research and development. This is a similar percentage split as recorded over the past three years.
• Defence research and technology spending is uneven across Member States, with 13 increasing, 12 decreasing, and one unchanged. Standing at 3.7% of total expenditure on R&T, Germany has the highest allocation of the 26 Member States in this area.

INCREASED INVESTMENT IN DEFENCE RESEARCH & TECHNOLOGY BUT COOPERATION LAGS

In 2021, defence Research and Technology (R&T) spending amounted to €3.6 billion, marking a massive 41% increase compared to 2020 and a new EDA recorded high. Compared to the historic low in spending reached in 2016, expenditure for defence R&T almost tripled. In 2021, over €1 billion extra was allocated, putting the 2% agreed benchmark within reach, but falling short at 1.7%. However, the trend is driven by Germany and France, which are responsible for more than 80% of the total defence R&T expenditure. As in 2020, they remain the only two Member States to reach the 2% benchmark.

In 2021, Member States spent €248 million on defence R&T projects in cooperation with other EU states, marking the first significant growth in this area since several years, totalling almost 70% compared to 2020. Nevertheless, expenditure lags compared to the high of €477 million recorded in 2008. Today, just 7% of total defence R&T expenditure is spent in cooperation, the second lowest recorded by EDA, and far from the 20% collective benchmark.

BACKGROUND

EDA collects defence data on an annual basis, and has done so since 2006, in line with the Agency’s Ministerial Steering Board Decision of November 2005. The Ministries of Defence of the Agency’s 26 Member States provide the data. EDA acts as the custodian of the data and publishes the aggregated figures in its booklets.

All data is collated (“total incorporates 26 EDA Member States”), and it has been rounded. Defence expenditure figures are provided in constant 2021 prices, to take inflation into account and allow for a comparison across years.

Notes for editors

1. EDA Defence Data Report 2020-2021
2. EDA Defence Data webpage
3. The European Defence Agency (EDA), the hub for European defence cooperation:
   1. Created in 2004 to support and facilitate defence cooperation in Europe, EDA has become the place where countries willing to develop their defence capabilities collaboratively can do so.
   2. EDA’s expertise and activities cover the whole spectrum of cooperation: from harmonising requirements to delivering operational capabilities; from research & technology (R&T) and innovation to developing technology demonstrators; from training and exercises to support to CSDP operations.
   3. EDA also closely engages with the European defence industry to enhance Europe’s defence technological and industrial base and help make the industry stronger and more competitive.
   4. The Agency’s role and impact have constantly grown, especially with the implementation of the EU’s Global Strategy (2016) which also led Member States to reinforce the Agency’s mission in 2017.
4. Follow #EUdefence on social media (Twitter, LinkedIn, Instagram, YouTube) for more and visit our website www.eda.europa.eu.

 

PRESS CONTACTS EDA

Elisabeth SCHOEFFMANN

Head of Media & Communication

Tel: +32 470 87 01 65

Paul QUINN

Media & Communications Officer

Tel: +32 2 504 28 24

 

Orde van Vlaamse Balies and Others
Combatting aggressive tax planning: the obligation for a lawyer to inform other intermediaries involved is not necessary and infringes the right to respect for communications with his or her client

Orde van Vlaamse Balies and Others
Combatting aggressive tax planning: the obligation for a lawyer to inform other intermediaries involved is not necessary and infringes the right to respect for communications with his or her client

Google (Déréférencement d’un contenu prétendument inexact)
Right to erasure (‘right to be forgotten’): the operator of a search engine must dereference information found in the referenced content where the person requesting dereferencing proves that such information is manifestly inaccurate

Written by Ionel Zamfir.

For two decades, the EU has sought to modernise its preferential trade relationship with the sub-Saharan African, Caribbean and Pacific (ACP) countries and establish free trade areas with regional groupings under so-called economic partnership agreements (EPAs). The process of establishing the EPAs has been longer and more complicated than initially expected, encountering criticism and opposition from civil society and some governments in ACP countries, who have been worried about the potential negative impact. So far, the results are mixed, with nine agreements negotiated – covering more than half of the ACP countries – but not yet all implemented.

EPAs are free trade agreements that allow ACP countries to continue exporting their products to the EU duty free and quota free, while ensuring full compliance with World Trade Organization (WTO) rules. EU goods should also benefit gradually from full liberalisation, though with numerous exceptions related to goods ACP countries wish to protect from external competition, particularly agricultural products. In this respect, EPAs are development-oriented, asymmetric agreements providing important advantages and safeguards to ACP countries, to foster their sustainable economic development, regional integration and integration on world markets.

While their potential impact has given rise to both numerous fears and great expectations, assessments of EPAs that have already been implemented show very limited effects, possibly due to their long drawn-out and gradual implementation. The risk of fragmenting regional integration schemes, particularly in Africa, is mitigated by the slow pace of trade integration on the continent.

The European Parliament has closely monitored the EPA process from the beginning. In a resolution of June 2022 on the future of EU trade with Africa, the Parliament insisted on a careful assessment of their impact by the Commission, on strengthening their – currently limited – sustainable development provisions and introducing a sanctions mechanism for non-compliance, and on the need to ensure that they do not disrupt regional integration.

This briefing updates a previous publication from July 2018.

Read the complete briefing on ‘EU economic partnership agreements with ACP countries: Which way forward?‘ in the Think Tank pages of the European Parliament.

Listen to policy podcast ‘EU economic partnership agreements with ACP countries: Which way forward?’ on YouTube.

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