European Commission President Ursula von der Leyen’s long-awaited unveiling of her “college” of commissioners for her second term came with some surprises, including in the shape of Andrius Kubilius. The 68-year Lithuanian is the European Union’s first ever defense commissioner. For him to feel his way into the new role, it will be essential to ensure smooth interrelations with the other commissioners in the college.
Most notably, the new defense commissioner will need to work in step with the High Representative for Foreign Affairs and Security Policy and Vice President (HRVP), Kaja Kallas. On the face of things, this should be relatively easy to achieve: We are talking about two former prime ministers from the Baltic States who are acutely aware of the threats Europe is facing. The new defense (and space) commissioner will also need to collaborate with two executive vice presidents—France’s Stéphane Séjourné (industrial strategy) and Finland’s Henna Virkkunen (tech sovereignty, security, and democracy). There are also the various commissioners for enlargement (which includes the defense of Ukraine), preparedness and crisis management, economic security, as well as startups and R&I.
Should any frictions arise over the next five years due to political contestation, we should expect President von der Leyen to pull rank and take charge of any difficult organizational questions. In any case, the mission letter to the new commissioner does not radically alter the role previously held by Thierry Breton.
Making a Difference?
Aside from any intra-institutional issues, however, the real question is what difference the new post will make in practice. Any earlier plans to somehow introduce a defense commissioner to cover practically all aspects of defense have clearly been shelved. Such a plan was unrealistic from the start. For one thing, member states would have protested, and it was not possible under the existing EU Treaties anyway. The treaties make clear that defense writ large (i.e., everything other than defense industrial matters) are under the exclusive purview of member states. Consequently, the new defense commissioner will not play any role in military operations, and he will not control tools like PESCO, the “permanent structured cooperation” in defense launched in 2017 to strengthen Europe’s security, or the European Peace Facility, a fund used mainly to finance weapon deliveries to Ukraine.
Still, the defense commissioner role is important because it has a purview over the central pillar of EU security and defense policy: Europe’s defense industry. Over the past five years, backed by an energetic commissioner (Breton) and money, the defense and space portfolios have grown in stature and relevance. Russia’s war on Ukraine, and the way it exposed the deep vulnerabilities of and gaps in the European defense industry, has only increased the importance of defense industrial policy at the EU level. Interestingly, under Breton the role included a strong diplomatic element, with the commissioner visiting capitals and companies to strong-arm them into producing more ammunition, while also seeking to address the structural issues that served as inhibitors to a more effective defense sector in the EU.
At the outset of the creation of DG Defis, the defense industry and space portfolio, in 2021, it may have been the case that the European Commission’s work in the industrial field would have been largely to implement the European Defense Fund; thus, a mainly managerial function. This is not to underplay the importance of the EDF. Although only €8 billion will be invested under the EDF until 2027, the present ideas of investing in common defense projects and joint procurement would not have seen the light of day without the bold decision to create the EDF in the first place. Yet Russia’s war has presented the EU with no option but to look beyond the EDF and to focus more on the defense sector as a whole, including on ammunition and equipment production.
Supporting Europe’s Defense Industry
Member states have encouraged the European Commission to engage with the fundamental question of how best to support the European defense industry. This can be seen through their endorsement of the Strategic Compass and the release of the Versailles Declaration, both released in March 2022 underlining the importance of the defense industry. Based on the strategic direction provided by these two documents, the EU has gone on to publish a European Defense Industrial Strategy through which it has proposed the future European Defense Industrial Program (EDIP). This will see the EU venture into joint defense procurement for the first time.
On top of this, the Letta and Draghi reports (named after the two former Italian prime ministers who wrote them) have both underlined the essential role that the defense sector plays in the EU’s overall competitiveness. The forthcoming report by Sauli Niinistö on defense preparedness and the expected White Paper on defense will only underscore how relevant the defense sector has become for the EU.
Three Main Issues
Despite this burst of initiative, however, there will be at least three main issues for the new defense commissioner to contend with. First, he will be in a key position to argue for a sizeable amount of money for the EDIP under the new Multiannual Financial Framework (MFF), the EU’s budget for 2028-34. Negotiations are ongoing, but Andrius Kubilius’ predecessor had called for at least €100 billion to finance common EU procurement. Where such levels of money will come from is still unknown.
The obvious option is to make more room for defense investments within the MFF, but this will create tensions with other spending priorities. The other option is to borrow the money from markets, but countries such as Germany have already publicly voiced their opposition to this route. There are other options including the greater use of European Investment Bank loans or the use of frozen Russian assets—these last two options present their own challenges though.
In the end, some compromise between these options may be found, but the risk is that funds are cobbled together at an underwhelming volume. An EDIP worth €8 billion, much like its EDF counterpart, will not reflect the security realities of the hour.
Yet, finding the money is only one part of the challenge—the other is how to spend it wisely on capabilities the EU and its member states need. True, the European Commission has called for core projects such as air and missile defense and cyber as the key areas to focus on. However, beyond individual projects the real challenge will be to recalibrate the EU’s overall (albeit nascent) defense planning structures.
Institutional Rivalries
Steps have been taken in recent years to ensure that the EU’s Capability Development Plan informs investments made under the EDF. However, the truth of the matter is that institutional rivalries conspire to weaken the overall connection between identified military needs, capability requirements, future technology horizons, and defense industrial policy. The EU has all of these component parts, regardless of how (in)effective they may be, but there is no agreement on which body should make the ultimate decision on where money should be invested at the EU level.
Several member states bulk at the idea of the commission having a free hand for such decisions. All of these factors could likely come to a head in the not-too-distant future over how the new defense commissioner will relate to HRVP Kallas and the role of the European Defense Agency (EDA)—the intergovernmental body that manages several relevant defense planning tools including PESCO, CDP, and the Coordinated Annual Review on Defense.
The third major issue will be how to develop EU-NATO relations in defense industrial policy. Many leaders and experts on both sides of the Atlantic are calling for a stronger European pillar in NATO. The idea is certainly not new, but it remains decidedly unclear what this means in practice; both in a general sense and more specifically in the defense industrial field. Although the character and familiarity of the new leadership at NATO and the EU will add fresh energy, it remains highly doubtful that the structural impediments will be surmounted over the next five years. In fact, there is a high level of competition between NATO and the EU in defense industrial policy, mainly due to the overlapping but distinct membership struture of each organisation and the industrial interests of the United States and United Kingdom.
In the past, NATO has made the official claim that EU-NATO relations can only deepen when the EU gives non-EU states such as the US or UK access to funding schemes like the EDF. The story on this front does not end with the fund, however, as the current plans for the EDIP (the first challenge) include a discussion about revising the rules that have kept American and British firms at arm’s length from the EDF. The more money that it appears likely to be endowed with under the EDIP, the greater the pressure there will be from the US and UK to seek access.
Yet, even here the familiar political considerations come into play: Non-EU states could in theory “pay their way” into the EDIP, but at the cost of the EU potentially losing control over how the common defense equipment developed can be used and/or exported. The risk is that any US participation in EU financing schemes would be to subject EU defense investments to American technology and export controls, which are decided in Washington and not Brussels.
So, some things will change, but a lot will stay the same. Still, the defense commissioner arrives in Brussels with a wealth of political experience, having served as Lithuania’s prime minister as well as an MEP in the European Parliament. Additionally, having an Eastern European perspective will also be interesting and essential in the coming years. “Eastern Flank” states, directly neighboring Russia, are topping the list when it comes to making legitimate calls for greater defense investments and capabilities.
The road ahead will be challenging, but there is every chance to make a success of EU defense industrial policy in the years ahead.
Daniel Fiott is Head of the Defense and Statecraft Program at the Center for Security, Diplomacy and Strategy (CSDS), Vrije Universiteit Brussel (VUB), and a Non-Resident Fellow at the Real Instituto Elcano.
