Check against delivery!
Good morning to everybody, I am very glad to be here with you. I have just come back from Skopje. The weather was very bad at the Brussels airport, so we had to divert to another airport, that is why I came late, and I was unable to listen to the full speech of the President of the [European] Commission [Ursula von der Leyen].
But I am very happy to be here. It is my duty to be here, because, as Head of the European Defence Agency (EDA), I know how important it is the role of this agency is. It was important when it was created and now it is more important than ever because we are living troubled times. And it is clear that the European Defence Agency is an important tool to strengthen European defence.
This gathering brings together more than 1,000 participants from all key stakeholders. European Union institutions – President [of the European Council, Charles] Michel and President von der Leyen attended this year’s conference, which is a clear signal of the importance of the agency and the centrality of this event on how to “Power up our European Defence”.
I will try not to say the same things that both Presidents have already said. It will be difficult. It will be difficult because both have been delivering important speeches, and I was very happy that the two Presidents wanted to attend our meeting.
Let’s try to be a little bit more operational in order to look ahead. But let’s also remind all of us that to talk about defence is as old as the European project itself, if you remember 1950.
In 1950, the first idea about European integration was through defence and it was a plan – the Pleven Plan – to build a European Defence Community. And the history would have been written in a different manner if the French National Assembly would have ratified the treaty that [would have] created a European army.
In fact, governments agreed but the French Parliament decided to say “no” for a coalition of the Gaullists who were not very happy to see a French soldier under the command of a German officer, and the Communist party who was not very happy to increase the defence capacities of the Europeans in front of the Soviet Union.
So, for one reason or the other, the fact is that this treaty was never ratified. And then the founding fathers decided that maybe to go through defence was too hard. It was touching too much the national fibre. It was touching too much the national sovereignty, and it was better to go through another way which was less sensitive: economics and trade.
Then we went through the market. We started creating the “Common Market”. When I was a young student, the European Union did not exist, it only existed the common market. It was a common market, it was common. But it was a long time ago.
Now, today, we are living in a completely different geostrategic context and today, the Europeans, the European governments are undertaking the biggest rearmament effort in Europe since 1950. We are in a moment in which everybody agrees that it is necessary to re-increase our military capacities, to build weapons together, arguing that it will be cheaper, but also to strengthen European defence capabilities from any point of view.
That is why, in this moment, we are living in a situation in which nobody doubts about the fact that Europe is in danger – as crude as this. I said that – when I presented the Strategic Compass – “Europe is in danger”. At that time, people believed “That is a slogan. That is a slogan to sell the product”.
Because it was before the Russia’s war of aggression against Ukraine, some weeks before that. It was before the major security crisis in the Sahel, [which] we still do not know exactly how to deal with. And certainly, it was much before what is going on in the Middle East.
So, the feeling that Europe is in danger has been growing since the moment we presented the Strategic Compass.
Russia’s aggression against Ukraine has reminded us how critical our military capabilities are. They were and they still are. [I am] talking about tanks, ammunition, artillery. [I am] talking about hybrid threats on space, cyber, critical infrastructures, on information manipulation, on security of supplies. All sense of being in danger, I think has become real.
And my job – my portfolio – is about Foreign and Security [policy]. The term “Security” was a second rank issue, because, well, “security” [but] we are not at war, we do not talk about security. But now, more and more the High Representative is not only about foreign policy, it is about foreign policy, security, and defence. I was very happy to have presented this Strategic Compass, that will be for sure one landmark for the building of the European Defence.
Now, we have to push forward. We have to push forward moving from a crisis approach to a sustained strategy, because we are living in crisis mode. There is an everyday crisis, and you pay attention to what is going on today, and maybe tomorrow. But we have to switch to a sustained and strategically-defined defence effort.
Our reaction to the war in Ukraine – against Ukraine – has been, as the President [von der Leyen] has explained, unprecedented on many levels, particularly on the military one.
I remember very well on the first days of January 2022 , one month before the war [aggression] started, I visited [the] Donbass and I had a meeting with the Prime Minister of Ukraine [Denys Shmyhal] and he asked me: “They will invade me” – it was not a question, it was an affirmation. “They will invade us, and when this happens, will you support us? I am sure you will tell me that you will not send your troops to fight together with us. You will not sacrifice the lives of the young Europeans but at least, are you going to provide us with the arms that we will need in order to defend us?” And I could not give a positive answer at that moment. I was not sure that this could be what [in] the end has happened. I could not say: “Oh yes, be sure, we will.”
But when the war started, the answer was: “Yes, we will.” The next time I saw the Prime Minister of Ukraine, he was in the same office with a lot of sand sacks on the windows of the office to protect [it] against the bombs. Things had changed a lot but then, I could say: “Yes, we are supporting you.” A taboo was broken. Military support to a country at war is something that the European Union – as European Union, not as Member States isolated – had never done before.
And since then, we have mobilised €27 billion of military support – not from the European institutions alone, all together. Member States bilaterally plus through the European institutions, through the European Peace Facility, we have provided €27 billion of military support – which is far from being negligeable – and we have been training 34,000 Ukrainian soldiers all over Europe. In almost all European countries, there are training activities and we plan to continue increasing the number of trained soldiers until 40,000 in the immediate weeks. This is unprecedented.
We have been using innovative tools, like the European Peace Facility (EPF) which was not at all conceived to support Ukraine. It was conceived, with a very much limited amount of resources to provide arms to the partners, mainly in Africa, where we were having training activities. But immediately after, the question was quite natural: if we are able support, in Africa, people who are fighting against terrorism, why shouldn’t we support a country like Ukraine who is fighting a full-range invasion? And this positive answer has changed the political landscape of the European Union, with respect [to] our role as a security and defence provider.
Now, we are very much engaged on the joint procurement of ammunition. I want to thank the European Defence Agency for its work, organising a joint procurement framework with 7 Member States already placing orders – these framework contracts. And more will be signed in the coming weeks in order to reach this 1 million ammunition target that we set some months ago.
We need to do much more to fulfil this target. We are not there yet. There are European armies that have been providing from their stocks about more than 300,000 shots, but we have to produce. Maybe we have to redirect our exports because an important part of our production is being exported to third countries. Maybe today it is much more urgent to provide this production to Ukraine because some of the clients of our defence industries – good for them – they will not need these ammunitions for tomorrow, they will stock it. So, maybe they can stock less and provide more to Ukraine. With the same capacities of production, you can give more to Ukrainians.
But certainly, we have to increase our capacity of production and the President von der Leyen has already explained how the [European] Commission and my colleague [Commissioner for the Internal Market, Thierry] Breton – with whom I am very happy to have such good cooperation – has put in place this new “Act in Support of Ammunition Production” (ASAP) and this reinforcement of the Procurement Act “EDIRPA”. This has been explained. I will not go into details, but it is an important way for the European Commission to participate in the effort of boosting the defence capabilities through boosting the defence industry capability.
There is not a strategic autonomy without a strong defence industry capacity. But we know that today, many European armies are buying a lot of their arms out of Europe. We know that inside Europe, we have discussion about the fragmentation of our industry. It is the old debate among economists. What is better? To have a small number of providers and to use economies of scale or, to have many in order to create competitivity and to boost innovation through competition? Economists have been discussing about that for years.
Well, in the United States, they have a less [smaller] number of providers for their military welfare than us, but they are asking themselves if this is a good solution and maybe they should have some more [providers] in order to boost competition and increase innovation.
Later, we will see that one of our weak points is research and innovation. But this is going on: how many industries, the fragmentation among Member States, army, national security, national identity rooted in the history, what kind of arms each army needs – it depends for what they want to use these arms. It is not the same thing to face an invasion from Russia on the flat lands of Central Europe that go to the jungles somewhere, to the desserts in Africa. You do not need the same kind of warfare. And in different scenarios, different Member States have been forging their military history, their military capacities.
The scenarios of war are different for ones and the others. When we want to build a common approach, we have to take into account all [of] that. And we do. I think we have been able to look for common ground and see all together how we can address our weakness.
Our mobilisation for Ukraine has been impressive. But this war has exposed our lack of defence investment in the previous decades. Until 2014, the Europeans have gone through a silent process of disarmament. Slowly, slowly, we were investing less in defence. And in 2014, Crimea’s invasion was the first wake up [call] and since 2014 until now, we have continued increasing our defence expenditure.
And last year, the defence expenditure of the 27 Member States – 27 because this report is the first time that it talks about the 27 [Member States] because Denmark is included. By the way, the report now puts names. [In] the last report, you could not see who is doing what. Now, you see Member State by Member State, it has been deanonymised. The press was criticising us saying: “But you do not tell us one by one who is doing [what] each one of them, the Member States.” Now, you have it.
All together, we raised the figure of €240 billion. It is [€]70 [billion more] than in 2014. So, in less than 10 years, we have increased our military expenditure by [€]70 [billion].
And last year, [it increased] by 6% compared to 2021. It shows that it is a [sustained] trend.
Compared to 2014, as I said, it is €70 billion more. If I am not mistaken, it was €170 [billion], it is about a little bit less than 50% [so] 40% [increase]. It is quite impressive, and it is accelerating.
But if you want to compensate the under-expenditure of these years, you have to make the integral. You have to sum up all the years differences, not just to have a look at the last year but all the years. And there is a lot of support, a lot of money needed in order to fill in this gap.
An important thing is that our expenditure privileges investment. Investment has increased [to] the figure of €58 billion – which is almost one quarter, about 24-25% of the defence expenditure.
It is the fourth year in a row that defence expenditure investment is increasing inside total figure. Four years in a row, we have increased our material capacity. It is good because we had a benchmark. We said defence investments have to be 20% of the total expenditure. We are at 24%, we are above the benchmark.
And what about our relationship with the Gross Domestic Product (GDP)? We are far away from the 2% target of NATO, we are at 1.5%. It means that if we were at the 2% target, we should add to this expenditure about €75 billion more per year.
Certainly, it is going to be difficult to ask the Ministers of Finance to make this big effort in a single budget period. But keep the figures in mind – we have increased a lot, we still are at 1.5% of the GDP.
In comparison to the United States, the United States is [at] about 3.5% [of the GDP]. So, they spend two points more of their GDP than us.
Russia – certainly Russia is at war – has been increasing its [defence] expenditure from 3.6% of the GDP to 4.3% last year. An increase of 70% [in the 2024 defence budget compared to 2023]. This is certainly a war economy. They have to do that, because they have been losing a lot [of] military capacities, but 70% increase in the military defence capability is a lot.
We are doing well, but we still lack a lot of critical capabilities, and we need to invest more on defence.
This is a message that, as High Representative for Security and Defence, I have to address to the European governments.
Not only we have to spend more, not only we have to invest more, we have to do it in the more [most] cooperative possible way. We have to do it together to fill gaps, to avoid duplication, strengthening industrial capabilities, to take care of our strategic enablers, in which we have a certain weakness. I said from [since] the beginning of my mandate: we have to do more and better together. This should not be a slogan, this should be a reality.
In order to build this reality, we have tools. We have the Coordinated Annual Review on Defence (CARD), that shows us what do we need to do.
We have the Permanent Structured Cooperation (PESCO) and we have the European Defence Fund, from the side of the Commission that will provide additional financial support.
On PESCO, we have 68 cooperative projects, but I think that we have to increase the level of our ambition, because these projects are important but they are in the periphery of the military capacity.
Why could we not think that the next generation of warships could be a PESCO project? We have to have a strategic review of PESCO. We launched it, and this is an opportunity – I am addressing the managers of the EDA – to think bigger.
PESCO projects have to touch the core of the military capabilities. This idea of thinking of the next generation ships as a PESCO project is something that would enhance the role of the European Defence Agency.
We have our Capability Development Plan, which defines which are our priorities.
The [27] Ministers of Defence agreed [on] which are these priorities. The industry has to have the capacity to supply, but the military responsibles have to have the demand side. The defence industry has to produce, to fulfil some requirements of our armies. It is up to our armies to define what do they need, and the industry has to follow.
The industry has to produce what we need, but what we need has to be defined. And this exercise of defining our needs is what the European Defence Agency is doing. It is a clear roadmap. It is a clear map of what our European armies need, and what the industry has to provide.
We have defined [priorities across] five strategic domains – land, air, maritime, cyber and space – and the strategic enablers that are crucial as force multipliers.
Then, we had to do something that is closed to this expression: “To put boots on the ground”. I mean, we have to have military capacities to be able to be deployed under the European Union’s banner.
It is not the European army, but it is the [EU] Rapid Deployment Capacity. To be able to deploy quickly a capability of intervention in some scenarios in which it is clear that going together, will multiply our capacity, and will decrease risks and costs.
This is the most important part of the Strategic Compass, and it has to be a reality by 2025. I will not be here, but I want to [leave] to my successor everything in order for this being a reality.
We started doing that in Cádiz – thank you to the Spanish Presidency [of the Council of the European Union] – for the first-ever European Union live military exercise. I think it was nine Members of the European Union deploying navy, air and land capacities, not in the framework of NATO, but among us, as a pre-configuration for the deployment of this force in 2025.
Thanks to Germany for being ready to do the same kind of exercises next year.
Another example, two days ago – I was not able to attend the inauguration but – in Portugal, we opened the new Multinational Helicopter Training Centre (MHTC) in Sintra, where the already existing EDA programmes gathered together in order to train the crews of helicopters from 16 Member States. It is another way of creating economies of scale, and making our people work together and share not only the technical capability but this sense of community, this sense of partnership, friendship, comradery that is an important part of any army.
This is something that EDA is pushing. It is not just a paperback, it is just something lively, involving people, involving capacities in some concrete places, doing concrete things that increase the interoperability of our armies.
This is the way. We have to aggregate demand and procure together. Instead of going to the industry one by one without a clear horizon, we have to aggregate demand and to give a clear horizon to the firms. Because if I was a leader of a defence industry and I was asked to increase my capacity of production, the first thing I will ask is: “Is it going to be a solvable demand? And for how long?”
This is what we have to define otherwise there will not be investments: aggregate demand and to procure together.
The ammunition [is] the first thing, but others will have to follow. Because we need a stronger, resilient and innovative European defence industry. Important for Ukraine, important for us. If we can increase our capability together with the Ukrainian capability – much better.
We have created immediate responses [EDIRPA and ASAP] but we need more strategic thinking and acting.
That is why, together with the Commission, we are working on this European Defence Industrial Strategy. Once again, I want to thank Commissioner Breton and his Commission’ services for the good cooperation between in an inter-governmental body, as is the European Defence Agency, and a community body as is the internal market and the industrial regulation of Europe’s economy.
We have a challenge, which is the access to public and private finance. The financing of the defence sector has to be addressed. The joint statement endorsed by the European Union Defence Ministers earlier this month, during our last [Ministerial] Board [meeting] of the EDA, sends a clear message in this regard.
I was very surprised when some important European banker told me that his risk committee would not advise them to finance defence projects. How is it [possible]?
It looks a bit strange that, at that moment our risk management people could say: “No, no, we do not invest, we do not support financing the [defence] industry because there is a kind of negative connotation about investing in defence”.
This is a cultural fact. Our society has to understand that they need to invest in defence. Everybody prefers butter to cannons but sometimes, if you do not have cannons, you do not have butter. That is important to bring to the mindset of the European people that defence expenditure is not just a waste of money. It is an existential requirement for Europeans to face the challenges of our world.
This is a task for the politicians, for the ones who go to ask for the votes of the people, the ones who explain where tax money goes, in order to make a choice between social needs – which are certainly very important – but also to make clear that defence is a boost for the economy. It is a job creation process, it is an innovation process and it is the basis of our security.
With that comes the weak point. I said that we are spending more, we are investing more. Unhappily, the figures show that in research and technology, we are not doing as well as needed. The expenditure in research and technology has decreased in 2022 with respect to 2021. [It is] not a small decrease, it is almost 6% less. This, we cannot afford.
The new generation of arms will not grow up on trees, they will not appear by an accident of nature. It will be the result of our engineers working, researching, investing, discovering how to make better use of all the materials and technologies.
We have to reverse urgently this trend. This is a warning. We cannot spend more, invest more and research less. Because if we want to be at the forefront of the military capability, it has to be through research and technology. And to develop better the state-of-art of our defence, we have this Hub for [Defence] Innovation at the European Defence Agency. We can play a role in this context. Later today, we will award the 2023 EDA Defence Innovation Prize. But we cannot continue investing on the tools of the past. We have to create the tools of the future, and that requires research and innovation.
In conclusion, defence has come a long way during the last years. I do not see our geopolitical environment to improve. On the contrary, what I see is a clear deterioration and degradation of our geostrategic environment. This requires us to do more and in a closer coordination among us.
The same ambition applies to the defence sector. The same ambition applies to the industry and to the cooperation between our armies. Because the transformation that Russia has started, aggressing Ukraine, and the trends in the world with more and more contestation about the role of the “West” with respect to so many conflicts, some of them [which] we are not talking about, but they exist. Who is talking about the situation in Sudan? Who is talking about the Horn of Africa? Who is talking about Sahel? Who is talking about some conflicts which are still there for years and years?
It looks like our society can only talk about one crisis at the time, and now it is the crisis in Palestine and Israel. But the war in Ukraine continues every day with a high toll on human lives. So, we cannot decrease our engagement with our defence and in our support in defence of Ukraine. Because, in the end, it is the same fight, the fight for our existential [existence], and we have to make the sacrifice and the efforts necessary, supporting our armed forces, developing our defence capacity, and making understand our societies that this is the challenge for today and we cannot miss it.
Thank you.
Link to the video: https://audiovisual.ec.europa.eu/en/video/I-249965
Source: EEAS