Brussels, 28 February 2024
Madam President,
Mr State Secretary,
Honourable Members,
In the last years, many European illusions have been shattered. The illusion that peace is permanent. The illusion that economic prosperity might matter more to Putin than destroying a free and democratic Ukraine. The illusion that Europe on its own was doing enough on security – be it economic or military, conventional or cyber. As we look around us, it is clear there is no room for any more illusions. Putin used the peace dividend to prepare for this war. As a result, the world is as dangerous as it has been for generations. Russia’s brutal war of aggression against Ukraine is now in its third year and is more entrenched and intense than ever.
We are seeing the potency and the dangers of a rising and disturbing league of authoritarians. North Korea is delivering order after order of ammunition shells to Russia. And Iran is providing attack drones, and crucially also the technology behind them, to inflict untold damage on Ukrainian cities and citizens. The continuing war in Gaza and the large-scale destabilisation in the Middle East point to an era of insecurity and conflict in the region and beyond. And we are also seeing the continued rise of aggressive economic competition and distortion, which brings with it some very real European security risks. So, to put it as bluntly as outgoing President Niinistö of Finland did last month: ‘Europe has to wake up.’ And I would add: urgently. We all know there is so much at stake here – our freedom and our prosperity. And we have to start acting like it.
We need to start working on the future of the European security architecture. In all of its dimensions and with all of the speed and political will that is required. Because the truth is, we have not been living with conflict merely since 2022, but for far longer. The threats to our security, our prosperity and our way of life come in many different forms, and we all know them. Some of them are obvious, some of them are hazier on the surface. Be it tackling political interference reducing our dangerous dependencies – a policy I have called de-risking – or be it eliminating hostile actors from our critical infrastructure. We Europeans must be on guard. This is not just about defeating bullies on the battlefield but across all our society.
The good news is: We have started a lot of that work already. In fact, the last years have not only served to shatter some European illusions. But they have also shattered many illusions about Europe. That our unity would not hold in the face of a war on our continent. Or that our rules and divisions would hold us back in providing massive financial, military and political support. Well, over the last two years, Europe has shown and proven that it will support Ukraine for as long as it takes. And we have also shown and proven that a more sovereign Europe is not just wishful thinking.
At this point let me be clear: European sovereignty will make our partnerships stronger. It will never affect the importance and the need for our NATO alliance. In fact, a more sovereign Europe, in particular on defence, is vital to strengthening NATO. That is why I am pleased with the news that Sweden will soon become a NATO ally. And I want to congratulate Sweden under the leadership of Prime Minister Ulf Kristersson on the historic step for this country . At its core, European sovereignty is about taking responsibility ourselves for what is vital, and even existential, for us. It is about our ability but also about our willingness to defend our interests and values ourselves. This is what Leaders agreed with the Versailles agenda just after the start of the war to reduce our strategic dependencies in critical areas like energy, key technologies – you remember the semi-conductors –, economic capacities and of course defence.
Member States have stepped up. Just last week, the naval mission Aspides was launched to protect against the direct threat to the freedom of navigation. Freedom of navigation that serves as a bedrock of global trade in one of the world’s most critical waterways. And Member States have stepped up their defence spending too. Their national defence budgets have already risen by 20% from last year. And NATO has just announced that it expects 18 of its members to beat the 2% defence spending target this year. That is up from only 3 members a decade ago. And together, we are now spending more jointly on common capacities and projects between Europeans. The European Peace Facility has mobilised EUR 6.1 billion to support the Ukrainian armed forces with lethal and non-lethal military equipment and supplies. The European Defence Fund is investing in high-end defence capabilities in critical areas such as, naval, ground, air combat, space-based early warning systems or cyber. And we have taken big steps forward in growing our defence industrial and manufacturing capacities. In the next weeks, we will announce award decisions under the ASAP programme. This funding will enable us to roughly double European ammunition production, to over 2 million shells a year by the end of 2025.
Honourable Members,
All of this progress shows that Europe has started to grasp the urgency and the scale of the challenge that is ahead of us. But there is a lot more to do. And we need to move fast. The threat of war may not be imminent, but it is not impossible. The risks of war should not be overblown, but they should be prepared for. And that starts with the urgent need to rebuild, replenish and modernise Member States’ armed forces. In doing so, Europe should strive to develop and manufacture the next generation of battle-winning operational capabilities and to ensure it has the sufficient quantity of material and the technological superiority that we may need in the future. That means turbocharging our defence industrial capacity in the next five years.
At the heart of this must be a simple principle: Europe must spend more, spend better, spend European. We will put forward some proposals in the next weeks with the first ever European Industrial Defence Strategy. One of the central aims of the Strategy, and the European Defence Investment Programme that will come with it, will be to prioritise defence joint procurement. Just as we did it very successfully with the vaccines or for example with natural gas. This will help us reduce fragmentation and increase interoperability. But to do this we must collectively send a strong signal to industry. This is why we will look at how to facilitate for example offtake agreements. They need security and the knowledge that products will be taken off. Or for example advance purchase agreements where we provide guarantees. This would give our defence industry companies very stable orders and most importantly predictability in the long run.
We will increase support for industrial ramp-up, as we are now doing with ammunition through ASAP. We will identify European Defence Projects of Common Interest, to focus efforts and resources where it has the biggest impact and added value. And we will focus on innovation to ensure Europe has that edge in the new technologies, which we see being deployed across the world in different conflicts. This must be a truly European effort. And that is why I am proud to announce that we will set up an Office for Defence Innovation in Kyiv. This will bring Ukraine ever closer to Europe and it will enable all Member States to draw on Ukraine’s battlefield experience and expertise in industrial defence innovation.
Honourable Members,
Taking this step together on defence will not be easy. It will require bold decisions and political courage. And it will require above all a new European defence mind-set from institutions to industry to investors alike. That is why I am very encouraged by the words of President Calviño that the EIB is ready to do more to contribute to joint projects that boost the European defence industry. And I really call now on Member States to endorse this proposal. Defence industry in Europe needs access to capital. I would like to encourage our public and private lenders to support our defence industry and in particular small and medium enterprises. Also in defence, small and medium enterprises are the backbone of our industry. They are the driver of innovation and a critical factor in the Single Market. And the topic needs undivided attention. This is why I am personally supportive of a designated Defence Commissioner for the next Commission.
And beyond that, I would like us to think bigger. It is time to start a conversation about using the windfall profits of frozen Russian assets to jointly purchase military equipment for Ukraine. There could be no stronger symbol and no greater use for that money than to make Ukraine and all of Europe a safer place to live.
Honourable Members,
Ultimately, this is about Europe taking responsibility for its own security. The simple truth is: We do not have the luxury of comfort. We do not have the control over elections or decisions in other parts of the world. And we simply do not have the time to skirt around the issue. With or without the support of our partners, we cannot let Russia win. And the cost of insecurity – the cost of a Russian victory – is far greater than any saving we could make now. This is why it is time for Europe to step up.
Long live Europe.