It defined, amongst other things, a new new a things, other amongst defined, It light of day. the had seen and Defence for Security Plan 2016 Implementation the November By high at follow speed. would phase next the that expected people few –very of preparations year a whole – after in June 2016 Strategy EU Global the welcomed Council European the When of PESCOThe start Security and Defence Policy (CSDP). At the the At (CSDP). Policy and Defence Security level of ambition for EU’s the Common party participation in projects, both still requiring a Council decision. Secondly, the the Secondly, decision. aCouncil requiring still both in projects, participation party and third commitments of PESCO sequencing of the issues the to paid be will attention Particular projects. the as well as of PESCO governance the to in 2018 regard with of PESCO process implementation the at look will It aims. two has Report Policy This come. to yet is for PESCO test real the start aquick After resolved. be have to still issues governance several while started has Implementation of batch projects. 17 first of the selection the including pressure, time huge under launched been has PESCO critical. is and beyond in 2018 of PESCO implementation the Therefore, raised. have been High expectations demanding missions”. most the to aview with binding commitments “more have made which and criteria” higher fulfil capabilities military “whose of defence area in the states all willing member together bring to meant is Treaty, the to PESCO According (PESCO). Cooperation 2017,In December Structured Permanent launched Council the ground. the off get to has 2018 implementation Union, where European year the is in the taken have been initiatives of defence amultitude in which aperiod After a with conclude will Report Policy The PESCO? to relate Initiative, Intervention European Macron’s President as such formats, cooperation other will How needed? are projects of types What of the ambition? EU’slevel fulfilling to contribute projects and its PESCO can extent what to question: forward-looking amore address to wants Report Policy set of recommendations on these questions. on these of set recommendations the next challenge implementation: PESCO 2018 SEPTEMBER Union had been a taboo in the Berlaymont Berlaymont in the ataboo had been Union momentum’, the by spending defence as a‘new or a‘game changer’ a ‘breakthrough’, agenda defence Commission’s the labelled commentators Many development. capability military and on &technology research defence on budget Union the from money of sums large spend to proposing Plan, Action Defence European its published Commission European the moment, same

Dick Zandee Policy Report Clingendael Policy Report

building until that moment.1 Finally, in phrase depicted the compromise between November 2016 the Council asked the High the German aim of including the maximum Representative/Vice President Federica number of EU member states – predominantly Mogherini to develop the blueprint for a defined by political reasons – and the French Coordinated Annual Review on Defence approach of creating a more ambitious and (CARD) in order to systematically assess smaller core – driven primarily by capability improvement by the member military aspirations. Several months later 25 states and to create better opportunities EU member states would sign up to PESCO for collaboration. (, and the UK did not). It is no surprise that the list of criteria reflected In 2017 further results were produced. the common denominator of almost all EU The CARD proposal was agreed upon member states and not the ambitions of the by the EU member states in May and countries which were ready to move ahead implementation through a trial run began ‘faster and further’. The next step was to agree soon after. In June the Commission on a list of PESCO projects – the so-called presented the second level consisting of groups of varying and legislation for the European Defence composition. Member states proposed over Industrial Investment Plan (EDIDP) for 50 projects which were reduced to 17 and spending € 500 million on the development adopted by the Council in PESCO composition of military equipment in 2019-2020. in March 2018. Although the proposed By mid-2018 the trilogy process of seeking projects were staffed by the EU member an agreement between the Council, the states, the (EDA) and the member states and the EU Military Staff (EUMS), political had been completed. The implementation motives also played a role in selecting the first of the EDIDP is underway, parallel to its batch of projects. The review of the Capability sister process – the Preparatory Action Development Plan had just started, but was on Defence Research 2017-2019 – which only to be completed by June 2018. Therefore, had started earlier on. While the European this could not be fully taken into account. Defence Agency (work on CARD) and the Commission (on EDF) moved forward, the member states also started to take action PESCO in 2018 on their own. After months of discussions and preparations , , Both the embedding of PESCO in the EU and sent a letter to the HR/VP in institutional landscape, sequencing of July 2017 on possible commitments for “an commitments, third state participation as inclusive and ambitious” PESCO2. The famous well as the implementation of projects remain at the agenda in 2018. Preparations have started to launch a second batch of PESCO 1 See e.g.: EU Unveils “Game Changer” Defence Fund projects in November 2018 as foreseen in For Post- Era, Forces Network, 13-6-2018, the implementation roadmap of March 2018 www.forces.network/news/eu-unveils-game- (see below). Thus, the implementation and changer-defence-fund-post-brexit-era; Vincenzo preparations of decision-making on remaining Camporini, Keith Harley, Jean-Pierre Maulny, Dick issues are taking place at the same time. Zandee, European Preference, Strategic Autonomy This is reflected in this section. and the European Defence Fund, Ares Report #22, November 2017; Dick Zandee, New kid on the block Governance implementation – The and European defence, The overall governance provisions formed Clingendael Policy Brief, December 2016. part of the December 2017 Council decision 2 Permanent Structured Cooperation (PESCO) – FR/ on launching PESCO.3 The decision defined DE/ES/IT Proposals on the necessary commitments and elements for an inclusive and ambitious PESCO – Supported by BE, CZ, FI and NL. Cover letter to High Representative of the Union for Foreign Affairs and Security Policy, signed by Parly, Dr. 3 Council Decision establishing Permanent Structured Ursula von der Leyen, Mari Dolores de Cospedal, Cooperation (PESCO) and determining the list of Roberta Pinotti – Paris, Berlin, Madrid, Rome, Participating Member States, Council of the European 21 July 2017. Union, 14866-17, Brussels, 8 December 2017.

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the tasks of the Council (in PESCO the implementation of the projects in terms formation), the procedures of proposing, of what has been achieved, what are the identifying and evaluating PESCO projects milestones and the deliverables. as well as supporting arrangements. On 6 March 2018 the Council met for the first Sequencing of commitments time in PESCO decision-making formation In the December 2017 Council decision two – in essence the full Council formation consecutive initial phases were defined for with the three non-PESCO EU member the fulfilment of the PESCO commitments: states in a listening mode. A roadmap for 2018-2020 and 2021-2025. At the beginning the implementation of PESCO was agreed of each phase more precise objectives have upon on that date. It covered unresolved to be defined – known as ‘sequencing’ – but governance issues and a calendar for a this would be decided upon in the future. review and assessment of the National The Council’s adoption of a recommendation Implementation Plans (NIP) which detail how on the matter has been postponed twice.5 participating member states plan to fulfil the Apparently, PESCO member states are more binding commitments.4 Governance struggling with defining more precise rules for PESCO projects were agreed upon commitments. This comes as no surprise: by the Council in June, in line with the the inclusiveness of PESCO’s upper layer of roadmap. commitments makes it inherently difficult to conduct this work. Predictably, the ‘slow PESCO is a member states’-driven movers’ will put their feet on the brake when cooperation format. The PESCO Secretariat the ‘fast movers’ want to accelerate. New in Brussels is meant to support the compromises are likely, but anything that participating member states. It comprises makes the generally phrased commitments three elements: the European External Action of December 2017 more concrete will be Service (EEAS), including the EUMS, and the welcome. It is needed to turn the PESCO EDA. The most important tasks, as defined commitments into real benchmarks. Thus, in the Council decision of December 2017, lie it will make the assessment of compliance with the EUMS (assessment of operational more substantial. What can be done? project proposals and compliance) and the The commitments are broken down into EDA (assessment of capability development five categories6: project proposals and compliance). The EEAS has an overall coordinating role 1. The first category covers defence and will probably act as the editor of the expenditure criteria. The aim should be Annual Report on PESCO which the High to define more detailed objectives in line Representative presents to the Council. with existing agreements. NATO member The tripartite Secretariat seems to function states have a commitment to spend 2% of reasonably well, but it should be noted that their GDP on defence by 2024. Naturally, also here the real test is yet to come. The non-NATO PESCO participating countries Annual Report is of high political importance. Thus, if the assessments delivered by the EUMS and/or the EDA were to contain critical remarks there could be a risk of 5 The Implementation Roadmap mentions June 2018 watering these down for political purposes. for adopting a related Council recommendation. To prevent this from happening, the Annual The Council Conclusions of 25 June 2018 state Report should contain the necessary amount that such a recommendation should be adopted of facts and figures on compliance with the “in principle in July 2018” See: Council Conclusions PESCO commitments but also with regard to on Security and Defence in the context of the EU Global Strategy – Council Conclusions 25 June 2018, Council of the , 10246/18, , 25 June 2018, para. 2. 6 Annex – List of ambitious and more binding 4 Council Recommendation concerning a roadmap commitments undertaken by participating Member for the implementation of PESCO, Council of the States in the five areas set out by Article 2 of European Union, Press Release, Brussels 6 March Protocol 10, Council Decision establishing PESCO, 2018. 8 December 2018.

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cannot be held responsible for applying the EDIDP offers an extra 10% financial the 2% spending target, although e.g. bonus for PESCO projects on top of the makes a clear reference to standard 20% for the development of realising it in its National Implementation prototypes. The EDF is mentioned in Plan for PESCO.7 This problem could the PESCO commitments list, but the be overcome by specifically making the participating member states’ commitment following reference: ‘applicable to NATO to collaborative spending could be member states’. Non-NATO countries made more explicit by introducing the like Finland could continue to report on benchmarks on collaborative defence realising the 2% target as they wish. The R&T and investment spending, which other two criteria – 20% of the defence were agreed upon in 2007, into the list. budget to be spent on investment and 2% on research & technology (R&T) – 2. The second category deals with generally have been agreed in the EDA Ministerial phrased commitments on harmonising Steering Board of November 2007. military needs such as through the The PESCO commitments text repeats implementation of CARD and involvement the 2007 language, i.e. they are both in the EDF. The relationship between ‘collective’ benchmarks, meaning that CARD and PESCO is unclear. CARD the benchmark applies to the total applies to all EU member states and expenditure of all PESCO members participation is ‘voluntary’ – offering together and not nationally. For R&T this the usual escape route for doing little is logical: several European countries only or nothing. CARD is primarily focussed buy military equipment ‘off the shelf’ and, on reviewing the defence efforts of therefore, do not invest in defence R&T all EU member states and incentivises themselves. Here, the only option might opportunities for collaboration. In the be that PESCO countries with defence PESCO Council decision the same EU R&T spending apply the benchmark countries, except three, have accepted nationally, in addition to the agreed a more far-reaching system of reporting collective benchmark. The on the fulfilment of commitments and the has already started to apply the 2% assessment thereof. After Brexit becomes R&T benchmark for its national defence a reality, only Denmark – which is unlikely budget. The 20% investment benchmark to participate in the ‘voluntary’ CARD should be applied nationally as it is an due to the country’s CSDP opt-out – and agreed NATO target.8 Two other EDA Malta will be left out. Thus, it seems 2007 benchmarks are not mentioned at logical that in due course CARD will be all in the PESCO commitments, which is merged with the PESCO arrangements quite astonishing as they directly relate instead of keeping two systems side- to the aim of increasing collaborative by-side. Lessons learned during the defence capability projects9: to spend at initial implementation of both systems least 20% of defence R&T expenditure should be taken into account. A specific and 35% of defence investment on capability for which commitments could European collaborative projects and be defined more precisely is cyber programmes. The EDF is meant to defence. Its growing importance should stimulate such collaborative efforts and be reflected by committing to e.g. participation in cyber defence-related collaborative projects, in the Cyber Centre of Excellence in Tallinn and in cyber 7 PESCO – National Implementation Plan, defence training and exercises. Puolustusministeriö Försvarsministeriet – Ministry of Defence, 4 December, 2017. 3. The third category concerns operational 8 Again, if not all non-NATO PESCO participating capabilities for EU-led operations. In member states could agree, the same solution could be applied as with regard to the 2% GDP terms of participation in military CSDP target. operations there is little or nothing that 9 This aim is mentioned in the first category of the can be made more precise. Political PESCO Commitments Annex. circumstances and, in several member

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states, parliamentary involvement in in one PESCO project, according to the decision-making on participation in text. For the latter, consideration could crisis management operations, make be given to increasing the number in it almost impossible to specify more particular in view of new projects which detailed commitments. Clearly, regularly will be added to the existing list of 17. updating the databases of available At the launch of PESCO, the Capability national forces for CSDP operations Development Plan (CDP) still had to is required, based on the new level be reviewed. In June 2018 the CDP of ambition. However, the EUMS as review was approved, including the list the guardian of such information will of capability development priorities.10 only be able to conduct this work if These should now be included in member states agree on defining military the PESCO commitments in order to tasks on the basis of the new level of ensure that participating member states ambition, scenario’s, requirements, etc. prioritise their capability development As EU member states disagree on the accordingly. On the other hand, it should translation of the level of ambition into be noted that the CDP’s 38 capability clearly defined military tasks, in particular priorities are very generically phrased. at the high end of the spectrum, it might National Implementation Plans and their be better to conduct this work in the assessment by the PESCO Secretariat context of a PESCO project representing should make clear if national plans are the willing and able member states. The really in line with the CDP priorities. already existing EUFOR Crisis Response The same applies to the assessment Operation Core (EUFOR CROC) project of new proposals, which is already would be the natural candidate for this underway for the second batch in view work. With regard to EU Battlegroups of decision-making in the (PESCO) the problem in the EU is not so much the Council in November 2018. commitment to contribute to EUBGs as such but to have them on stand-by in the 5. The fifth category commits the EU Battlegroup roster and, even more PESCO participants to take part in importantly, to deploy them in real-life the development of major joint or operations. The remaining areas for the European equipment programmes in the further specification of commitments framework of EDA. OCCAR should be are standardisation and interoperability considered as the preferred organisation between EUBGs, the arrangements for for the management of collaborative making other operational formations in procurement programmes.11 Again, bilateral or subregional formats available there is a reference to strengthening the to the EU and the common funding of EDTIB and making it more competitive. CSDP military operations. For the latter, More precise commitments should the High Representative has presented focus on bringing already existing major a proposal for a European Peace Facility collaborative European programmes for (EPF) with a financial investment of € 10.5 billion for the period 2021-2027. A link between PESCO and the EPF is worth considering. 10 New 2018 EU Capability Development Priorities approved, Latest News – European Defence 4. The fourth category deals with prioritising Agency, Brussels – 28 June, 2018; 2018 EU the European shortfalls in capability Capability Development Priorities, attached to development and giving preference to Capability Development Plan, Fact Sheet European collaborative approaches instead of Defence Agency. exclusively national solutions. There is 11 OCCAR = Organisation Conjointe de Coopération en matière d’Armement, an international also a reference to increasing ’s organisation whose core business is the through- strategic autonomy and to strengthen life management of cooperative defence equipment the European Defence Technological and programmes such as the Tiger Armed Helicopter Industrial Base (EDTIB). Participating and the A400M military transport aircraft. See: member states should at least participate www.occar-int/about-us.

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developing military equipment under third state in order to be eligible for joining the wing of EDA-OCCAR, such as the a PESCO project. For example, the added EuroDRONE MALE project (see below). value should be specified. What will the The EDF should be mentioned as a third state concerned contribute to the potential (co-)financing tool for the R&T project and how firm is the commitment to and development phases. Consequently, the project’s aim, objectives, milestones and member states should report on their deliverables? Another element could be the participation in collaborative programmes financial or operational contribution of a third (co-)financed by the EDF. state. It also seems logical that third states, contributing to projects, should support the With regard to the timing of commitments overall PESCO aims (without themselves (2018-2020; 2021-2025) it is logical to expect being held responsible at the commitments’ that some benchmarks will be realised upper level). For participation in PESCO later than others. For example, the 2% projects which are carried out under the GDP benchmark applies to 2024 in NATO; roof of the EDA it might be necessary to therefore, the same will apply to the EU. have an Administrative Arrangement in On the other hand, the proposed more place.12 Project arrangements for third states precise commitments in categories 2-4 are should be as flexible as possible, but need realistically within reach in the next few to be balanced with EU rules which might years. For the fifth category it will be very be applicable to the project governance much dependent on the status of major level. Thirdly, there is a link with the EDF for European collaborative programmes. the involvement of defence technological entities in third states. In the EDIDP context Third state participation a number of rules have been defined for the Another unresolved topic of a sensitive participation of defence industries in Europe nature is third state participation in PESCO with a home base in third states. Naturally, projects. For some participants, it is highly PESCO projects using EDF funding will have desirable to open up projects to countries to follow these rules. like , the post-Brexit UK or the US – when there is clear added value in having NATO such partners on board. For example, in The link to NATO remains very important the PESCO project US for both political reasons – to show that participation is desirable as the Americans both organisations are not competing but will have to move large volumes of equipment reinforcing each other – and to ensure around for Europe’s defence, albeit in the consistent capability development. The NATO context. Norway is a major contributor overall EU-NATO cooperation framework to EDA projects and is a partner in European was put in place at the Alliance’s Warsaw collaborative procurement programmes – Summit in 2016 and has been updated e.g with Germany for the acquisition of new regularly since then. What now matters is to submarines. However, there are potential look more closely at the tools used on both third state candidates whose participation sides. At the capability development level might raise serious objections in some there is a great deal of misunderstanding PESCO capitals. Political sensitivities will about harmonising the NATO Defence have to be taken on board in settling the Planning Process (NDPP) with the CDP. third state issue. The two are different by nature. In essence, the NDPP is the Alliance’s tool to assess Firstly, as already defined in the decision the member states’ contributions to the on launching PESCO, the Council will determine on each occasion if a third state meets the general conditions for joining a 12 Administrative Arrangements (AAs) define the PESCO project. As the Council will also take relationship and cooperation rules and procedures the decision on these general conditions between the EU and non-EU entities (either a double check has already been built in. states or organisations). Several AAs have been Secondly, the general conditions should agreed upon in the past, e.g. with Norway, , list a set of criteria to be fulfilled by the Switzerland, and OCCAR.

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Figure 1 – 17 PESCO projects

Operational Capability development Other European Medical Command European Secure Software Defined Radio Military Mobility (ESSOR) Network of logistic hubs in Europe and Maritime (semi-) Autonomous Systems for ­support to Operations Mine Countermeasures European Training Mission Competence Harbour & Maritime Surveillance and Centre ­Protection European Training Certification Centre for Upgrade of Maritime Surveillance European Armies Energy Operational Function Strategic Command and Control System for CSDP Missions and Operations Deployable Military Disaster Relief Armoured Infantry Fighting Vehicle/­ ­Capability Package Amphibious Assault Vehicle/Light ­Armoured Vehicle Cyber Threats and Incident Response Indirect Fire Support (EuroArtillery) ­Information Sharing Platform Cyber Rapid Response Teams and Mutual Assistance in Cyber Security EUFOR Crisis Response Operation (­EUFOR CROC)

forces needed to carry out the Alliance’s already announced such an initiative – or military level of ambition. The CDP has been have carried it out in the past – but all EU designed specifically to analyse what sort of and NATO countries should apply the same military capabilities the EU needs in a more approach for the sake of efficiency. general sense and where the major shortfalls lie. It ‘informs’ capitals, it does not assess Projects their performances and, above all, it should The first batch of 17 PESCO projects can drive collaborative capability development be categorised in different ways. The programmes. PESCO Factsheet of the EU refers to three areas and puts most projects (9) in the box With the introduction of the CARD and of operational domains.13 It is a strange PESCO monitoring and assessment tools the categorisation which does not separate EU’s processes come closer to the NDPP. the two major PESCO areas of operational There will be a greater overlap between the and capability development projects in a two. In the past, the major area of overlap consistent way. A more logical classification was information on the status and planning is two major categories: projects related to of national armed forces. Countries that are operational formations (including training) members of both the EU and NATO used the and projects for capability development same tool for sending relevant information (equipment). A third category would contain to both organisations. Now, the analysis other projects. See Figure 1. and assessment of the member states’ performance also asks for close coordination in Brussels between the responsible parts of the organisation in both organisations, 13 The three categories are: (i) common training in particular the Defence Planning & Policy and exercises (2 projects); (ii) operational domains Division in the NATO International Staff and – land, air, maritime, cyber (9 projects); (iii) joint the CARD/PESCO Secretariats. Member and enabling capabilities – bridging operational states could also help by inviting EU/EDA to gaps (6 projects). See: Permanent Structured NATO consultations with national planners Cooperation (PESCO) – Factsheet, European and vice versa. In fact, several countries have External Action Service, Brussels, 28/06/2018.

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The first batch of 17 PESCO projects is a Report on PESCO has to be used to point mixed bag of operational and capability to the member states’ responsibilities in development projects. Checked against this respect. the CDP almost all of them are in line with EU capability development priorities. This is mainly due to the extension of the CDP PESCO’s next phase priorities: they have reinforced the focus on high-end capabilities and other focus Capability-driven projects areas of member states such as for territorial Hopefully, later this year the Council decide defence and security or cyber defence. upon the arrangements for third state The fact that Military Mobility (MM) has contributions and adopt a second batch become the PESCO flagship is confirming of PESCO projects. Two prerequisites are this trend. It serves NATO needs to move key to improve project selection: (i) the forces across Europe for Article 5 exercises proposed projects have to be in line with the and contingencies. But MM can equally be CDP priorities and should address the most important for the EU, e.g. to move equipment critical European shortfalls; (ii) at least one within Europe for CSDP operations taking or two of them have to be of a real strategic place outside Europe or to support border nature in terms of impact, both for European protection activities. One could even argue capability improvement and for strengthening that MM has become a flagship because the EDTIB. The first precondition begs for it serves both organisations. Clearly, both a thorough scrutiny process by the PESCO the EU and NATO have to solve the many secretariat for proposed projects. With CARD problems related to MM – clearances, in place and PESCO tools available, the customs procedures, infrastructure, EUMS and the EDA should be able to make logistics, etc. The challenge will not be to a fair judgment on each proposal if it fulfils sustain the support of the EU and NATO the capability-driven approach. In case the as organisations, but rather to generate answer is positive, this assessment should the adequate involvement of all national be attached to the list of approved projects actors – including Ministries of Transport in order to show publicly which European or Infrastructure and the private sector – to shortfalls will be addressed. Naturally, the undertake the necessary action. This ‘whole- same assessment has to take place with of-government’ approach is already reflected regard to non-PESCO projects which might at the EU level14, but still needs to be adopted be eligible for EDF financing. in many capitals. In fact, a ‘whole-of-society’ approach is needed as private companies With regard to new flagships in the second have to be involved as well.15 Other PESCO batch the French-German-Italian-Spanish projects have progressed in a slower manner, EuroDRONE MALE16 seems to be an ideal but one should be aware that capability candidate. The project addresses a key development projects in particular do not European shortfall and has the governmental move at the speed of light. Nevertheless, support of four important European being PESCO projects, ‘moving to higher countries. Defence industries are already gears’ should be the rule – not ‘business as committed to entering the next phase of usual’. In most cases it is not clear at all what development and procurement after a model is happening and concerns about project was unveiled at the Berlin Airshow in April progress seem to be justified. The Annual 2018.17 By bringing the project into PESCO, it should be opened up to other countries and the industrial cooperation could also be multiplied. In line with the new level 14 The European Commission has proposed to spend of ambition, resulting from the EU Global € 6.5 billion in the period 2021-2027 on transport investment for enhancing strategic infrastrucures to make them fit for military mobility. See:EU Budget for the Future: Connecting Europe Facility, European 16 MALE: Medium-Altitude Long-Endurance. Commission, 02/05/2018. 17 Airbus, Dassault Aviation and Leonardo reaffirm their 15 For example privatised railroad companies, private total commitment in the first fully European MALE owners of key infrastructure and so forth. programme, Airbus, 26. April 2018.

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Strategy, high-end capabilities should also CROC, E2I, JEF, FNC……and so on.20 The be included in PESCO. The Franco-German name of the game should not be to create Main Ground Combat System project, aimed additional formations, but rather to bring at the long-term replacement of tanks order into disorder.21 All recent initiatives are and self-propelled artillery with systems focussing on intervention-type operations. based on new technologies, would fall The new level of ambition for the EU implies into that category. In order to standardise a reinforced focus on “high-end warfare”.22 European land weapons systems, widening The question is if and how PESCO could the number of participants by bringing the contribute to realise this objective. Clearly, project under the PESCO roof would be most there are serious hurdles to be taken. Firstly, welcome. In due course it could also open several existing formations or initiatives up a supply market to the Franco-German (CJEF, E2I, JEF) include the UK, a non-EU led company KNDS.18 Looking at the naval country as of the spring of 2019. The CJEF, sector, the next generation non-nuclear the JEF and E2I have deliberately been set submarines could be a candidate. Germany up outside the EU (or NATO) institutional and Norway have already agreed to procure framework to pool countries willing and able the same submarine. Detailed operational to intervene in crises, if needed with high- requirements are still to be defined and the end capabilities. Bringing such cooperation whole process of research and development formats into PESCO requires at least solid has yet to start. There is time for other third state participation arrangements, which European countries to join, such as are unlikely to satisfy the demands of and the Netherlands, by turning this bilateral being the lead nation in the JEF and a major effort into a PESCO project, including in the contributor to the CJEF and E2I. Secondly, defence industrial area.19 Both the future Germany has developed the FNC in particular Main Ground Combat System and the for NATO’s core Article 5 task in view of conventionally driven submarines would the need to reinforce heavy land forces also be showcases for how already planned for follow-on operations to the enhanced projects in smaller defence clusters could be Forward Presence and NATO Response opened up to wider participation with strong Force capabilities. Thus, the link with the EU commitments – thus fulfilling PESCO’s and CSDP requirements is rather weak. objectives. In a general sense, multinational defence clusters could become the drivers The question is really how the already of proposing PESCO projects, building existing PESCO CROC project – also with on already ongoing cooperation formats Germany as the lead nation – can be linked and the synchronised defence planning of cluster partners.

Operational projects 20 CJTF: Combined Joint Expeditionary Force, Franco- There is no shortage of already existing or British; CROC: Crisis Response Operation (Core), a PESCO project with Germany as the lead nation planned operational cooperation formats and France, Italy, Spain and as participants; in Europe. In fact, one becomes lost in E2I: European Intervention Initiative, France as the alphabet soup of acronyms: CJEF, the lead nation with , Denmark, , Germany, the Netherlands, , Spain and the UK as participants; JEF: Joint Expeditionary Force, the UK as the lead nation with Denmark, Estonia, Finland, , , the Netherlands, Norway and as participants; FNC: Framework 18 KNDS = Kraus Maffei Wegmann (KMW) + Nation Concept, Germany as the lead nation with Nexter Defence Systems. KNDS is the holding 19 other European countries as participants. company of the German KMW and the French 21 See: Dick Zandee, Developing European defence Nexter, established at the end of 2015. KNDS is capabilities – Bringing order into disorder, the defence industrial leg of the Franco-German Clingendael Report, October 2017. Margriet Drent, governmental Main Ground Combat System Eric Wilms, Dick Zandee, Making sense of European project. defence, Clingendael Report, December 2017. 19 Germany, Norway formally start submarine 22 Fact Sheet on ‘New 2018 EU Capability cooperation, Naval Today, 23 August 2017. Development Priorities approved’, p. 3.

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to the formations and initiatives outside Another interesting question is the following: the EU. The aim of CROC is to establish a should PESCO operational projects also closely coordinated catalogue of capabilities contribute to NATO’s level of ambition? designed to shorten the planning time of The Military Mobility project clearly does. military EU operations.23 Four of the five Most capability development projects will CROC partipating member states are also equally be for the benefit of the Alliance, as participants in E2I. It seems quite logical to most PESCO participating member states connect the two initiatives as there seems are also NATO countries and have only to be an overlap in terms of threat analysis one set of forces. Operational capabilities and finding ways to improve reaction and across the whole spectrum, from capacity- planning time in crisis circumstances. building (training, assistance) to high-end A formal link would be difficult (because military operations, are all on the NATO of the UK participation in E2I), but perhaps list of required military forces. As the EU is there is scope at the level of specific E2I primarily focussed on crisis management projects, assuming that third country operations, the overlapping area consists participation can be agreed upon by the mainly of forces to be deployed rapidly Council. Informal relations could be used, and over an extensive distance. That would in particular as most probably the same imply that member states – rather than the staff officers in capitals are involved in institutions which will end up in political- both projects. Issues like threat analysis, bureaucratic competition and strife – will scenario’s, doctrine and planning are likely take a fresh look at how capabilities for the candidates for such interaction. NRF, EU Battlegoups and other formations can be optimally aligned and rationalised. On the operational side of enablers one If EU-NATO cooperation will progress further, could think of creating a European Air dual-hatted EU-NATO crisis reaction forces Reconnaissance Fleet (EARF), in the short could perhaps become a reality. term by bringing together nations operating (or acquiring within the next few years) Keep the momentum remotely piloted air systems in the MALE Many EU (and NATO) defence initiatives category, such as France, Germany, Italy and have experienced a short life-cycle. the Netherlands. In the second half of the Just five years ago security and defence 2020s all EARF participants should operate discussions were focussed on ‘pooling & the same platform (EuroDRONE MALE) sharing’ and ‘smart defence’. There was which will also create optimal conditions limited follow-up and the new cooperation for combining in-life maintenance and formats disappeared from the radar screen support, thus maximising cost-effectiveness. soon after their launch. Decisions at a high The experience of the successful European political level were not properly implemented Air Transport Command (EATC) should be at the working level – in other words there used to create the EARF. was too limited ‘buy-in’ by the defence planners and procurement staff in capitals. Defence budget cuts in the years 2010-2014 made it even more difficult as very few new multinational programmes were launched. Instead, international defence cooperation was primarily focussed on operational 23 Niklas Helwig, New Tasks for EU-NATO Cooperation formations. – An Inclusive EU Defence Policy Requires Close Collaboration with NATO, SWP Comment 4, January Today, the situation is quite different. 2018. The website of the German Ministry of Defence budgets across Europe are Defence has little or no information on CROC and it increasing, new large multinational is dated 17 December 2017. It only mentions three programmes are on the horizon and, last objectives: common analysis of potential threats; improvement of equipment and personnel planning; but not least, almost all EU member states shortening reaction time and planning in crises. have signed up to PESCO commitments See: www.bmvg.de/de/aktuelles/einstieg-in-die- and projects. Nevertheless, keeping up verteidigungsunion--20748. the current momentum is still a challenge

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requiring at least two critical steps to be cooperation in the broader sense. Clearly, taken. Firstly, practice in other areas such parliamentary support also remains a key as the Eurozone, counter-terrorism and factor – requiring both information sharing migration has shown that sustained political and regular debates on the matter, also in attention at the highest level is needed in multi-country formats. A less stove-piped order to make progress. Nationally, it implies approach in parliaments could assist to that Ministers of Foreign Affairs and Defence realise the whole-of-governement approach, have to bring in other ministries into their for example by organising combined efforts to take the security and defence meetings of the Defence Committee and the agenda forward in a whole-of-government Transport an Infrastructure Committee. approach instead of operating in their own closed-off stove-pipes. In this respect, Thirdly, at the EU level PESCO in some countries the secrecy culture of implementation will falter unless the agenda Defence Ministries and armed forces is a of the regularly addresses liability, which has to be dealt with. More security and defence issues. In the last few transparency will facilitate efforts to buy-in years EU Heads of State and Government other national security stakeholders such have almost every half year discussed as Ministries of Justice and Home Affairs, European defence matters. The European Economic Affairs and Infrastructure. There Commission under President Juncker’s is still a long and widing road to go in many leadership has made an excellent collective capitals. Clearly, this also requires strong effort – involving several Commissioners – leadership and support from the central level to put defence high on the list of priorities. of government, i.e. the President and/or the The European Parliament has been active Prime Minister. Due to the changed security and now even has a decisive vote in defence environment, the attention paid to security when money from the Union budget is and defence matters at the highest national (planned to be) used. Keeping the PESCO level has increased considerably in recent momentum at the EU level requires the years. Keeping the momentum for PESCO institutional leadership, together with the first and foremost asks for strong national national highest political level, to remain political leadership. involved through assessing progress, taking additional steps if needed and following Secondly, a great deal of effort is still needed up EU-level decisions consistently at the to involve defence and procurement planners national level. within the Ministries of Defence. PESCO has been realised because Ministers of Foreign Affairs and Defence plus their security and Conclusions and defence policy directorates have made recommendations huge efforts – with the assistance of the Brussels institutions – after the launch of the EUGS. Now it is time to embed PESCO General in the national planning and procurement 1. The first year of PESCO implementation apparatus, which often has little or no is showing how difficult it is to turn knowledge and experience of the EU politically agreed decisions, taken in and where NATO reflexes dominate the a very short timeframe, into practice. international aspect of their work. Changing Generally speaking, it is too early to tell culture always takes time, but for PESCO if PESCO implementation is successful. and its projects to succeed, shifting to A proper assessment can only be made higher gears will be absolutely necessary in after several years, in particular with order to realise the ‘automatic’ involvement regard to capability development projects of expert staff instead of the existing ‘ad which are multi-annual by nature. hoc’ and often ‘forced’ involvement. In that sense, the communication departments of 2. Permanent Structured Cooperation the Ministries of Foreign Affairs and Defence has been launched on the basis of the should also play a more proactive role in Franco-German compromise of ‘ambition promoting PESCO and European defence and inclusiveness’. The consequence

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of this diplomatic compromise is Brexit has become a reality in the spring a continued debate among the of 2019 and assuming that Denmark 25 participating member states when it will not participate in CARD due to its comes to the further refinement of the defence opt-out, there is only one EU details related to PESCO governance, member state left within CARD but the sequencing of commitments and outside PESCO: Malta. Thus, merging to implementation in general. The first CARD and PESCO in the medium to year of implementation already shows longer term seems to be the next logical the challenge related to a simultaneous step, which will also help to reduce the ambitious and inclusive PESCO. administrative-bureaucratic burden of member states and the PESCO 3. The tripartite nature of the PESCO Secretariat. Secretariat (European External Action Service, including the EU Military Staff, 6. The Treaty’s reference to “more binding and the European Defence Agency) commitments with a view to the most seems complicated but has functioned demanding missions” requires a reasonably well so far. The next step translation of the new level of ambition is the Annual Report for which the for CSDP, including at the high end of EUMS (operational commitments the spectrum, into defined military tasks. and projects) and the EDA (capability On the other hand, it is unlikely that all development commitments and projects) EU member states will agree on detailing will provide the building blocks in military tasks for high-end operations. terms of compliance by member states. The solution will have to be found at the It is essential that the EEAS, editing project level of PESCO countries willing the Annual Report, and the High and able to plan and conduct high-end Representative, presenting it to the operations. The existing Crisis Response Council, ensure that the Report contains Operation Core (CROC) project is the the real facts and figures on compliance logical candidate for conducting this and does not conceal them for political- work. diplomatic reasons. 7. The number of projects in which PESCO Governance – sequencing countries are committed to participating 4. The commitments on defence should be increased, at least to two and expenditure should be brought into perhaps more if the amount of projects line with the benchmarks, as agreed increases further in the future. When by the EDA Ministerial Steering Board proposing projects PESCO participating in 2007. In particular, the benchmarks member states have to indicate the on European collaborative spending relationship to CDP priorities. Also in the (R&T and equipment investment) National Implementation Plans and their should be added to the list of PESCO assessment by the PESCO Secretariat commitments. The NATO 2% GDP the link between projects and the CDP target should be included for PESCO priorities has to be made clear. Naturally, participating member states that are also the assessment of project proposals members of the Alliance. Non-NATO requires the same scrutiny – in the short PESCO countries could apply the target term for the second batch to be agreed as they deem necessary (assuming that upon in November 2018. full subscription for some of the non- NATO PESCO participating member Governance – third state states will not be acceptable). participation 8. A double check on third state 5. In the near term the Coordinated Annual participation in PESCO projects already Review of Defence (CARD) and the exists as candidates have to comply PESCO compliance assessment should with the general conditions – still to be continue to exist in parallel as they defined and agreed by the Council – and serve different purposes. However, after a specific Council decision is required

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for each concrete case. The general actors is key to solving the problems conditions should clearly spell out what around MM. information should be provided by a third state, in particular the added value it will Pesco’s next phase bring to a PESCO project. It is logical that 11. Every future PESCO project proposal third states subscribe to the overall aims has to be capability-driven by indicating of PESCO and that an Administrative to which CDP priority it is related. In the Arrangement with EDA might have to be second batch at least one project should agreed before joining projects carried out be of a strategic nature, both in terms under the Agency’s roof. of addressing key European capability shortfalls as well as with regard to Relationship with NATO strengthening the European Defence 9. The NATO Defence Planning System Technological and Industrial Base (NDPP) and the EU’s Capability (EDTIB). Development Plan (CDP) are tools with different purposes. The NDPP 12. In that context, the French-German- assesses the contributions of the Italian-Spanish EuroDRONE MALE Alliance’s member states to the initiative should become a PESCO collective NATO military requirements project. Other PESCO countries should while the CDP drives collaborative be allowed to join the project, assuming capability improvement projects and that they provide concrete contributions. programmes. However, with the CARD In the land sector the same could apply and PESCO compliance assessment to the Franco-German Main Ground new elements have been brought into Combat System project. Concerning the EU processes which will overlap naval systems the German-Norwegian with the NDPP. Secretariats in both programme for the next generation non- organisations should further increase nuclear submarines could be considered their informal cooperation to ensure as another potential candidate, although the consistency of their assessment it can only be proposed once third state in overlapping areas. Member states participation arrangements have been could invite EUMS/EDA representatives agreed. In all cases of bringing existing to their NATO consultations and, vice- bilateral or multinational programmes versa, for their EU consultations invite into the PESCO basket of projects, the NATO representatives. industrial cooperation format will also have to be opened to defence companies Projects located in the countries joining the new 10. The first batch of 17 PESCO projects PESCO project. has been launched under time pressure. With the reviewed CDP in place the 13. There is no need to create new proposed second batch of projects rapid reaction or intervention-type have to be checked thoroughly against multinational combat formations. Rather, the CDP priorities. In presenting the existing formats and inititiatives should be proposed projects to the Council it harmonised as far as possible. The CROC should be made clear how they relate to project in PESCO and President Macron’s the CDP priorities, in other words how European Intervention Initiative (E2I) have they contribute to solving European several overlapping aspects. A formal link capability shortfalls. Military Mobility is difficult because of UK participation (MM) remains a PESCO flagship as a in E2I. By using informal contacts the key enabler for moving forces across two projects should be synchronised Europe. The most important factor for to the maximum extent and, if at all the success of the MM project is to apply possible, under third state participation a whole-of-government/society approach arrangements, and they could perhaps in the participating member states as be merged. the involvement of many non-defence

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14. On the operational side of enablers a European Air Reconnaissance Fleet (EARF) could be created to pool & share the capacities of several European countries operating Remotely Piloted Air Vehicles in the Medium-Altitude Long-Endurence (MALE) class. Common acquisition of the EuroDRONE MALE in the second half of the 2020s is highly desirable for reasons of standardisation and cost-effectiveness.

15. To keep the momentum in PESCO three critical steps have to be taken. Firstly, PESCO and in particular relevant PESCO projects need broader support in capitals, outside the Ministries of Foreign Affairs and Defence. A whole- of-government approach is required and is key for certain PESCO projects such as Military Mobility. Strong political leadership at the highest level (Presidents, Prime Ministers) is essential for such a government-wide approach. Secondly, within the Defence Ministries awareness campaigns should be started to embed PESCO and European defence cooperation in general into the defence and procurement planning apparatus of experts. Clearly, parliamentary support also remains a key factor. Thirdly, at the EU level the European Council should continue its existing habit of regularly addressing European defence cooperation, assessing progress and taking additional steps if needed.

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About the author

Dick Zandee is Senior Research Fellow and Head of the Security unit of the Research department. His research focuses on security and defence issues, including strategies, policies, capability development, research and technology, armaments cooperation and industrial aspects. Recent subjects are: EU and NATO responses to new threats; the counter-ISIS campaign; the implementation of the EU Global Strategy in the security and defence area; lessons from multinational defence cooperation models. He also focuses on current news in the security and defence area, commenting in the press and to other media.

Disclaimer: This Policy Report has been commissioned by the Netherlands Ministries of Foreign Affairs and Defence within the PROGRESS framework agreement, lot 4, 2018. Responsibility for the contents and for the opinions expressed rests solely with the authors; publication does not constitute an endorsement by the Netherlands Ministries of Foreign Affairs and Defence.