Von der Leyen’s Defence Union dream won’t come easy – or cheap

European Commission President Ursula von der Leyen has made defence a centrepiece of her campaign for a second term in office.

But her strategy must overcome significant political, financial and legal hurdles – and is likely to major on boosting its long-neglected industry, rather than sending EU troops into battle, Euronews was told.

“The world is as dangerous as it has been for generations,” European Commission President Ursula von der Leyen, previously Germany’s defence minister, told lawmakers in a February speech that cited turbulence in Europe and the Middle East. “Europe has to wake up.”

A week later, as she accepted the nomination of her centre-right EPP party for a further five-year stint leading the EU executive, she pledged a European Defence Union, with a designated commissioner responsible.

That would represent a significant departure – and it won’t be easy.

The EU has long been seen as a peace project mainly concerned with regulating markets: economic leviathan, military minnow.

Many believe that needs to change, given Russia’s aggression against Ukraine.

“There is awareness that there is an existential issue for the continent, for the EU,” MEP Sven Mikser (Estonia/Socialists and Democrats) told Euronews, adding: “We have been collectively taking out the peace dividend for far too long.”

US bedrock

US support has long been a bedrock of European security – but Mikser believes presidential candidate Donald Trump and his increasingly inward-looking Republican party may now see NATO less as a guarantor of US security, and more as a fee-based service.

“There is a realistic chance that we see the US taking less interest,” Mikser, who was previously Estonia’s foreign minister, said in an interview. “Europe will have to be ready to do even more.”

Both EU governments and their electorates seem to recognise the need to strengthen the military.

In 2024, 18 NATO members, including many from the EU, are expected to spend at least 2% of their economy on defence, according to the alliance’s Secretary General Jens Stoltenberg. In 2014, just three met that target.

A recent bloc-wide poll for Euronews shows nearly half of voters see EU defence as a political priority – all the more so in countries that border Russia.

An EU army?

The EU has made little progress establishing an operational military presence.

Von der Leyen herself cites Aspides, an EU defensive mission that sent four frigates to the Red Sea to protect trade ships from Houthi attacks.

But EU joint exercises have so far been modest by NATO standards, and, though there’s talk of deploying them in specialised situations such as evacuations, it’s still not clear when and how that might happen.

The EPP manifesto for European Parliament elections due in June looks ahead to “integrated European forces” in air, land and sea, but Mikser dismissses the idea of an EU army as “far-fetched”.

“This will not happen in the foreseeable future,” Mikser said, as the military is a major attribute of national sovereignty. “NATO is obviously going to remain the organisation of choice when it comes to military operations.”

As such, EU action is likely to focus on a more traditional economic role for the EU: stimulating the domestic defence industry.

The Commission says the sector has a turnover of €70bn, and employs half a million people.

But in practice, of military purchases made by EU states since the Russian invasion, nearly four fifths are from providers outside the bloc, chiefly the US.

Shortcomings in production capacity were laid bare when the EU failed to achieve a target to send Ukraine a million shells, and are now lawmakers’ focus.

“Our priority should be on the coordinated procurement and production of weapons and munition, in order to create an effective single European defence market,” David McAllister (Germany/European People’s Party) told Euronews in a written interview.

As such EU defence policy – at least in the medium term – seems likely to build on existing projects, including EDIRPA, boosting demand by common procurement, and ASAP, stimulating ammunition supply.

But even more modest market-focused policies still face a host of major challenges, not least a massive funding gap.

The EU’s normal approach would be legislation to govern and consolidate the market – but that won’t be enough, Sophia Besch told Euronews.

“Regulation and harmonisation we’ve been trying for 30 years, and it hasn’t worked,” as EU treaty exemptions let countries circumvent EU defence laws, said Besch, a fellow in the Europe Programme at the Carnegie Endowment for International Peace.

Instead, she said, the EU needs to offer funding – and a lot more than the meagre €1.5bn it recently proposed.

EU commissioner Thierry Breton has himself talked of the need for a €100bn fund, and there’s been a range of proposals to close that gap.

They include extending the reach of the European Investment Bank, carving out military spending from constraints on budget deficits, and even European defence bonds – an innovative form of finance that’s likely to provoke scepticism among frugal members wary of pooling debt.

The cost of Russian victory

However big the price tag, von der Leyen argues the cost of a Russian victory would be greater still.

But, when funding the EU budget, “member states go into these negotiations with their own parochial interests”, Besch said.

Those intergovernmental dynamics can be still worse in the field of defence – as Ireland remains steadfastly neutral, Hungary deploys its veto, and EU treaties restrict the commission’s ability to buy arms directly.

Last time the EU agreed its seven-year budget plans, defence spending was slashed in favour of more traditional areas such as farm subsidies.

Those hurdles have meant slow progress, even in an area Brussels paints as urgent.

The EU recently agreed its €5bn European Peace Facility (EPF) after significant debate, but the end result is “administratively burdensome and democratically untransparent,” Dylan Macchiarini Crosson, a researcher at Brussels-based think tank the Centre for European Policy Studies, told Euronews.

A new commissioner?

Von der Leyen’s promises of institutional change could help, Crosson argues: a new defence commissioner could potentially wring some powers back from the more nationally-controlled EU external action service, such as the ability to set regulatory standards.

But equally, the EU’s track record isn’t great, and the rightward shift predicted in the next European Parliament could bring national sensitivities even more to the foreground, he believes.

The fact that the Czech government recently moved to coordinate national military procurements – exactly what the Commission hoped to do via EDIRPA and the EPF – is an “indictment of what’s been done thus far” by the EU, Crosson said.

Transatlantic views

Whatever the EU does in this area, policymakers across the Atlantic are watching closely – and perhaps more supportively than before.

“Historically, Washington has been sceptical of European defence projects,” said James Batchik, associate director at the Atlantic Council’s Europe Center, citing previous concerns from former Secretary of State Madeleine Allbright that the EU might duplicate or delink from NATO structures. “That’s generally changed: America welcomes a more active Europe.”

Meanwhile US presidential elections, taking place just days after a new Commission is sworn in, could represent its first major challenge.

There’s a clear contrast between the candidates: both Besch and Batchik describe incumbent Joe Biden as an instinctive transatlanticist, while Trump has said he’d encourage Russia to invade supposed European allies.

But the imperative for Europe to protect itself shouldn’t depend on who’s in the White House, Batchik told Euronews.

EU states “missed the boat” in understanding geopolitical threats over the last three decades, he said – and US election results “won’t change the long term necessity of this defence transformation in Europe.”