Brussels, 11 October 2022
Dear Representatives of the defence community in Europe,
Ladies and gentlemen
I am glad to be with you today to open the afternoon debates of the second edition of this European Defence & Security conference.
Since the first edition last year, the security landscape in Europe has dramatically changed. With the aggression of Russia in Ukraine, V. Putin attempts to redesign the security architecture of Europe and threatens the fundamental values of what makes Europe: freedom, self-determination, peace.
Peace has never been and is not a given. Let’s not be afraid of words: the return of the war on the European continent is a wake-up call for all.
The return of a high intensity conflict obliges us to review our approach to Europe’s security. Sanctions but also the strategy of decoupling all the dependencies we may have with Russia (technological, energy, other).
Since the 24th of February 2022, Europe acted quickly, always in unity, but also in cooperation with our partners within NATO.
We have – and this is unprecedented in the history of the Union – organised an arms transfer to support Ukraine, using the European Peace Facility which was not necessarily designed for this at the outset. This shows our commitment and determination to support Ukraine.
We are also very attentive to the hybrid dimension of this war, in particular the threats to critical infrastructures such as the energy network, the transport sector, and space assets, whether they are physical or cyber threats. We also counter the massive disinformation machine that accompanies Russia’s military action.
All these elements are all pointing to the same conclusion: Europe must become a stronger and more credible security provider, including for its own security.
From the traditional soft power, it must progressively evolve towards hard power with the attributes that this requires.
This the meaning of the Strategic Compass adopted by all Member States as a European common defence doctrine.
This is also the messages of the leaders who, in Versailles last may, called for a more integrated Europe in terms of defence.
Defence investment gaps
The reality of the numbers, however, is revealing.
The EU Member States are investing collectively €200bn a year in defence, when the US alone invests around $800bn. Over the last 20 years, our defence spending have increased by 20% when they increased by 66% in the US, 290% in Russia, and 590% in China.
If we had all invested 2% of our GDP in defence since the start of the Euro, we would have invested 1300bn euros additional into defence. And these figures hide very large national disparities. Not all Member States made the same efforts to ensure Europe’s security. This is a fact.
This translates of course into capabilities and industrial gaps as well as dependencies which we must now urgently address.
Several Member States are now investing heavily into defence (more than €200bn announced, more will follow). These are welcome, but my message is simple: these investments cannot fragment Europe. They must be used to foster cooperation, rather than support exclusively national lines.
The only approach is indeed a European one.
So let me explain where I believe we should collectively bring the European Defence Union.
First pillar: a strong R&D in defence
The first pillar of our strategy is of course the European Defence Fund.
Before the war in Ukraine, we had already taken unprecedented steps at European level to strengthen our cooperation, with the PESCO and above all the European Defence Fund.
Who would have thought years ago that today we would have, through the EDF, a €8bn European Defence R&D programme able to invest in concrete defence capabilities and technologies?
Despite our initially very different positions, we managed to find a way to ensure Europe’s is not lagging behind when it comes to capability and technological development.
In 2021, we invested €1.2bn in 61 strategic projects, involving 700 entities (of which 43% of SMEs) from 26 countries with an average of 8 Member States per projects. We have supported projects in Air missile defence, Air, ground and naval combat, Mobility or Cyber and Space. The calls for 2022 are open.
This shows that what we have built collectively with the EDF is working and that the governance and security safeguards we have built into the program are the right ones.
Now of course, we must also always try to improve, especially looking at the lessons learned with the first iteration of projects. I see two courses of actions:
- While competition must remain the cornerstone of our intervention, we must never lose sight that defence is a specific sector: ultimately, we want to support the defense capabilities that Member States need and are willing to buy. So we need to reflect on how to integrate a stronger dose of strategic planning into the European Defence Fund for the general interest of the EU.
- Second, the principle of the European Defence fund is co-funding. I would like to see a significant improvement in the leverage, that is, the level of money that member states are willing to commit – in addition to the EU budget – to develop certain capabilities.
These two elements are paramount if we are to advocate – like I do – that EDF should be allocated more money to face with the current realities.
Europe has no time to lose in scaling up its defense capabilities, which are pre-requisite to become a credible security actor.
Second pillar – A joint acquisition programme
The second pillar of our strategy is about developing a European joint acquisition Stratgey.
Indeed, after the cooperation in R&D, we need to structure a cooperation mechanism for the acquisition.
Joint procurement currently accounts for only 8% of purchases in the EU, which is far from the 35% target it has set itself. In addition, 60% of purchases are made on non-European equipment. There is a need to develop a strong European framework for joint acquisition.
This is what the Commission proposed through the EDIRPA, and the more permanent European Defence Investment Programme (EDIP).
Our objectives are threefold:
First, we must respond collectively to the depletion of national stocks in armaments and munitions following the transfer to Ukraine. This situation represents in itself a security risk and we must act fast. With EDIRPA, we propose a European vehicle to lead part of the recovery effort.
Second, we must avoid fragmentation. The risk is indeed to channel the massive investment increase into purely national lines. This could lead to a lack of interoperability and could undermine all the efforts we do through EDF to consolidate a European industrial base. So with EDIRPA we are offering to the Member States a European alternative to invest together.
Third, we must support the adaption of our defence industry. I will not offend anyone in saying that today, our European defence industrial apparatus is not adapted to the security reality we are facing, neither in volume nor in pace. There is a great risk, as with vaccines, that MS will be put in competition with each other for the same equipment, with the effect of raising prices and driving out those who do not have the means or the volume. EDIRPA is designed to act in a European spirit, to structure the demand and to support a fast industrial ramp-up.
This proposal is now in negotiation between the co-legislators
I will allow myself only one remark as these negotiations are ongoing: while we take these unprecedent steps, we must also be clear that our strategic and security interests, as Europe, is to ensure that the European industry is benefiting from these efforts. We are not changing the rules of defence procurement in the EU, each Member state can buy the capabilities it wants with its own budget. But nobody would understand that EU budget is mobilised to support non-EU industry.
I want to be extremely clear: There is no trade-off between quality/efficiency and European capabilities.
I now count on the Council and the EP to move forward quickly, in line with the need to give Member States and the industry visibility while the recovery effort is underway.
Third Pillar: Defence & Security in a broader sense
The third pillar of a true Defence union is to extend the notion of security and defence to new sectors.
This is especially the case I believe on 4 dimensions: Cyber, Space, Critical infrastructures, Technological superiority.
Let me briefly touch on each of them, as they are all included in our Strategic Compass.
First on cyber, we will present early November, together with HRVP Borrell, a new cyber defence policy. While the Commission has put forward a wide array of initiatives on cybersecurity, it is time to enhance our cooperation on cyberdefence to protect, detect, defend and deter.
I especially wish that
- We work toward the creation of a European infrastructure of SOCs, to build a true European Cyber Shield, with a clear defence dimension.
- We create a cyber Solidarity mechanism based on a cyber emergency fund and cyber reserve corps to enhance our solidarity in case of major cyber-attacks.
- We build a joint and common cyber situational awareness, which would be the basis for stronger cooperation, also at the operational level.
Second, on space. Space is a newly contested area, where our competitors can have hostile behaviour and threaten vital interests (we have seen it with the anti satellites strike ran by Russia before the war, or the cyber attacks on ViaSat). This why we need to develop a true space dimension in our defence strategy. We will present this strategy early next year.
I want all EU space infrastructures to develop a defense dimension, as we have done with Galileo PRS. This will be true for Copernicus, for the upcoming connectivity constellation and the Space Traffic Management system. This is a major paradigm shift, breaking taboos. But a necessary change.
Third, on critical infrastructures. Unfortunately, the news of these past days are showing how in an hybrid warfare, critical infrastructures in Energy, telecom, transport and others can be targeted to disrupt our strategic interests.
While the legislative framework exists to enhance their security, what we lack is concrete operational capacity to ensure collective protection to these infrastructures. This is what we will try to fix very soon (likely next week), along the lines of what we have in the case of cyberattacks.
Fourth, on technological superiority. Europe must remain at the edge of technologies while closing existing dependencies and avoiding creating new ones.
Whether it is in cyber, quantum, space, chips, supercomputers, Europe cannot lag behind.
Synergies with the advanced civilian technologies are therefore essential. But for that, we need to be better organized at the European level. With this in mind , we are working on the following elements:
- We will map out our strategic technological dependencies and act upon them to reduce them by mobilising all the EU instruments.
- We will also create a EU sovereignty Fund to have the means to reduce our dependencies and protect EU’s strategic interest whether for a technology or a given company in a strategic value chain.
- We will work towards an ambitious European Defence Innovation Scheme, designed to bridge all the EU instruments supporting disruptive innovation, and create a Cassini for defence fund of €1bn. NATO is doing DIANA, EU will do EDIS.
Conclusion
Ladies & Gentlemen
In conclusion, we have made unprecedented progress defense cooperation in recent years. We have launched new capabilities and industrial projects, we have built confidence and we have established new governance.
But the war in Ukraine calls on us – Member States, EU institutions, Industry – to accelerate and take European defense to the next level. You can count on me to take this vision forward.
Source – EU Commission