Documents considered by the Committee on 28 March 2018 Contents

1Permanent Structured Cooperation

Committee’s assessment

Politically important

Committee’s decision

Not cleared from scrutiny; recommended for debate on the floor of the House; drawn to the attention of the Defence and Foreign Affairs Committees

Document details

(a) Council Recommendation of 6 March 2018 concerning a roadmap for the implementation of PESCO; (b) Council Decision (CFSP) 2018/340 of 6 March 2018 establishing the list of projects to be developed under PESCO

Legal base

Articles 42(6) TEU and Council Decision (CFSP) 2017/2315 of 11 December 2017; unanimity by PESCO participating Member States.

Department

Foreign and Commonwealth Office AND Ministry of Defence

Document Numbers

(a) (39552), —; (b) (39553), —

Summary and Committee’s conclusions

1.1The 2009 Lisbon Treaty created the legal basis for “Permanent Structured Cooperation” (PESCO) in the area of defence, a political framework within which EU Member States can choose to make commitments intended to improve their military assets and defence capabilities in the context of specific initiatives and projects. PESCO does not affect the veto of each EU Member State over CSDP operations and other EU foreign policy measures under the Treaties,1 or their right to decide unilaterally whether to deploy military personnel or equipment to specific operations or missions.

1.2In December 2017, against a general backdrop of intensified cooperation on defence matters at EU-level,2 twenty-five EU countries—all except the UK, Denmark and Malta—formally launched PESCO. They also identified a provisional list of 17 projects to be undertaken to improve their assets and increase their defensive capabilities. It was clear that not all participating countries would be involved in all projects.

1.3While the UK is not a formal participant in PESCO, the Government has supported its launch, as well as consistently calling for a legal framework—which is still being discussed by the participating countries—that will allow non-EU countries to request involvement in specific projects. This would enable the Ministry of Defence and UK industry to seek participation in PESCO after Brexit on a case-by-case basis.

1.4When we considered the launch of PESCO in December 2017, we concluded it was a major political development—irrespective of the UK’s decision not to participate and its exit from the EU—in light of the Government’s clear interest in safeguarding its ability to participate in projects of mutual benefit under the PESCO aegis. We therefore recommended the Council Decisions establishing PESCO for debate on the Floor of the House.3

1.5In early March 2018, the Defence Ministers of the PESCO countries adopted a Council Decision that formally established the 17 projects,4 as well as a separate Council Recommendation on PESCO’s implementation.5 The latter sets out a timetable for the adoption of detailed governance arrangements for individual projects (June 2018), the addition of new projects to the existing list (November 2018) and the legal principles for ‘third country’ participation (“by the end of 2018”). The list of seventeen PESCO projects formally endorsed by the Council reflects the list provisionally adopted by the participating countries back in December 2017.6

1.6As a non-participating State, the UK did not vote on either document and will not be bound by them. The Minister for Europe (Sir Alan Duncan) submitted an Explanatory Memorandum on both documents on 20 March, reiterating the Government’s support for PESCO and confirming the UK will seek a clear legal route for participation in individual projects after Brexit (to ensure it can seek involvement where this is in the UK’s interest or “where there is clear value in doing so, including for [the] defence industry”, and to prevent duplication of efforts between PESCO and NATO).7

1.7From the seventeen current PESCO projects, the Minister identified the ‘military mobility’ project8 as the one of principal interest to the UK. The European Commission is due to set out its specific proposals for the removal of customs and regulatory barriers to the movement of troops and military equipment within the EU in an Action Plan in spring 2018.

1.8We thank the Minister for his Explanatory Memorandum, and reiterate our previous conclusion that the launch of PESCO is of major political importance, especially as the Government will in the coming months and years seek to shape a new security and defence relationship with the EU and its Member States. We urge the Government to schedule the debate on PESCO we called for in December last year without delay.

1.9Crucially, the Minister has again confirmed the Government wants the flexibility to seek involvement in specific PESCO projects even after the UK has left the EU, where this is considered in the national interest.9 The modalities and constraints any such participation might impose on the UK will not be clear for some time. The participating countries have committed, “in principle”, to adopt rules for involvement by non-EU countries “by the end of 2020”, but declined to be more specific. We ask the Minister to keep us fully informed of any developments in the establishment of the third country arrangements, although we understand the UK will have no formal say in that process.

1.10We also note that the Ministry of Defence is principally interested in participating in the PESCO project relating to ‘military mobility’. As we noted in our Report of November 2017, this relates to the removal of regulatory and other barriers to the movement of troops and equipment within the EU, as well as improvements in physical infrastructure needed for the movement of military convoys within the EU by rail, road, air and water (possibly with financial assistance from the EU budget).

1.11Problematically for the Government, ‘military mobility’ is the project most likely to involve binding EU legislation, rather than pure intergovernmental cooperation between national defence forces. It could require amendments to EU law in areas such as customs, transport and freight. This, under the Treaties, will usually require the involvement of the European Commission as the initiator of EU legislation in those areas, and the European Parliament as co-legislator with the Member States. The UK will no longer have a vote over any legislative initiatives taken as part of this project after it ceases to be a Member State. In any event, given the decision to leave the Single Market and the Customs Union after the post-Brexit transitional period, the extent to which the UK would benefit from measures taken as part of the ‘military mobility’ project is uncertain at this stage.

1.12As part of Brexit, the UK is placing itself outside the remit of EU law, and as such it is unclear if lifting of regulatory and customs hurdles would—should the Government secure formal participation in this project—also apply to military transports to and from non-EU countries, or to British troops and equipment being moved within the EU. We will return to this subject when the European Commission publishes its Military Mobility Action Plan with concrete proposals later this spring. We expect further information from the Minister about the potential benefits and costs to the UK of cooperation with the EU in this area after Brexit, including the potential need for continued regulatory alignment with EU law.

1.13More generally, we still await further information from the Government about its detailed proposals for a new foreign policy and defence partnership with the EU after Brexit. The Government has told us that it wants to be able to participate not only in what is likely to be the most regulation-heavy PESCO project, but also secure involvement of the British defence industry in EU-funded research and development of military technology under the new European Defence Fund,10 and a role for the UK military in the EU’s Common Security and Defence Policy.11 The overall implications of seeking such a close relationship for the operation of the UK’s defence and foreign policy is not yet clear, especially where it includes cooperation within the EU’s legal structures as a non-Member State and without the Government’s current representation and voting rights.

1.14As the debate we recommended on PESCO has not yet taken place on the floor of the House, we recommend that these latest Council documents be added to our previous recommendation so that Members from all parties are fully informed of the latest developments at EU-level when they debate the implications of Permanent Structured Cooperation for the UK after Brexit. We also draw these documents to the attention of the Defence and Foreign Affairs Committees.

Full details of the documents

(a) Council Recommendation of 6 March 2018 concerning a roadmap for the implementation of PESCO: (39552), —; (b) Council Decision (CFSP) 2018/340 of 6 March 2018 establishing the list of projects to be developed under PESCO: (39553), —.

Background

1.15On 11 December 2017 twenty-five EU Member States—all except the UK, Denmark and Malta—signed up to “Permanent Structured Cooperation” (PESCO) on defence matters, a mechanism introduced by the Lisbon Treaty in 2009. It is essentially an EU-level political framework for Member States to establish binding mutual commitments in the area of defence, for example by jointly developing military capabilities, or enhancing the operational readiness of their armed forces.

1.16In December the participating Member States also adopted a declaration provisionally identifying 17 projects to be undertaken under PESCO. Among these are a European medical command, a network of logistic hubs across Europe, and a creation of a European crisis response centre. The European Commission will produce an assessment each year of how the participating countries are meeting the targets they have set themselves.

1.17PESCO does not affect the veto of each EU Member State over CSDP operations and other EU foreign policy measures under the Treaties, or their right to decide unilaterally whether to deploy military personnel or equipment to specific operations or missions. Instead, it aims to develop existing capabilities to ensure more effective and efficient deployment—especially in the context of activities undertaken as part of the EU’s Common Security & Defence Policy (CSDP)—where it is sanctioned at national level.12

1.18Nevertheless, PESCO is seen by some as a step towards a more unified EU-level military structure. It should be seen in the context of other developments in EU’s CSDP, which mean it is deeply enmeshed in the broader efforts by the Member States and the European Commission to unify the EU’s approach to defence, and therefore strongly influenced by the overall direction of EU defence policy as determined by the Member States in the Council. These parallel developments include:

1.19The same section of the EU Treaty that forms the basis for PESCO also contains article 42, which allows the Member States—unanimously—to decide to create a “common defence”.

1.20As noted, the UK did not join PESCO, but it did vote in favour of its launch at the Foreign Affairs Council. The Minister for Europe (Sir Alan Duncan) told us at the time that the Government was of the view that PESCO could address military capability shortfalls in the EU, and that it was satisfied that the legal framework would allow for participation by the UK defence industry after Brexit in specific projects of mutual interest (although the exact conditions for such involvement are yet to be determined by the participating countries, without formal UK input).18

1.21When we considered the launch of PESCO in December 2017, we concluded it was a major political development—irrespective of the UK’s decision not to participate and its exit from the EU—in light of the Government’s clear interest in safeguarding its ability to participate in projects of mutual benefit under the PESCO aegis. As a non-Member State, the UK will lose the ability—open to the other non-participating EU countries— to request participation in PESCO. In terms of the practical impact of the projects to be launched under PESCO, we considered that the improvements sought to the participating countries’ military capability will take many years to develop. In addition, we remain to be convinced that the framework itself will lead to a greater willingness among Member States to engage in more joint operations coordinated at EU-level.

1.22We recommended the Council Decisions establishing PESCO for debate on the Floor of the House. We took the view that the debate should, ideally, cover the launch of PESCO and the MPCC; the broader possibilities for UK-EU cooperation on defence matters after Brexit; and the implications of PESCO and the European Defence Fund for international defence structures outside of the EU framework, in particular NATO.

Developments since December 2017

1.23On 6 March 2018 at the Foreign Affairs Council (Defence), EU Defence Ministers adopted a Council Decision that formally established the seventeen PESCO projects,19 as well as a separate Council Recommendation on PESCO’s implementation.20 The Council sat for the first time in ‘PESCO format’, meaning that Ministers from all EU Member States were present and invited to speak, but only those from PESCO-participating Member States could vote on the legal acts. As a non-participating State, the UK did not vote on either document and is not be bound by them.21

1.24The Minister for Europe (Sir Alan Duncan) submitted an Explanatory Memorandum on both documents on 19 March, after they had been adopted by the Council. There was no scrutiny override, as the UK did not have a vote as a non-participating country. The Minister reiterates the Government’s support for PESCO, saying it recognises “its potential to help drive up defence investment in Europe and to strengthen capability, so long as capabilities developed in this framework remain Member State-owned and are available to NATO and the UN, not just the EU”.

Roadmap for implementation of PESCO

1.25The Council Recommendation sets out a roadmap for the implementation of the PESCO. Council Recommendations are legal acts, but are not legally binding. The principal purpose of the Recommendation is to set out next steps for the implementation of framework. It includes a timeline for the review of the national implementation plans that detail how PESCO participating Member States will fulfil their commitments. Notably, it provides a schedule for other future Decisions on:

1.26With respect to participation by the UK, the Government has been consistently clear that it wants to secure the right to seek involvement on a case-by-case basis after it ceases to be an EU Member State, in particular to ensure that PESCO remains complementary with NATO and does not duplicate work undertaken by that organisation. The conditions for third country participation are therefore a UK priority, and the Government has welcomed the participating states’ ambition to formalise them by the end of the year.

1.27In his Explanatory Memorandum, the Minister underlines that the Government “will not support measures that would undermine Member States’ competence for their own military forces”, in recognition of the fact that “defence remains a national competence”. He then adds:

“We want to have the ability to cooperate with PESCO as a third state, should it serve the UK’s security and defence interests. Our key objective on the Council Recommendation was to secure a specific timeline on arrangements for third state participation. We therefore welcomed the language (…) calling for discussions to start “as soon as the common set of governance rules for the projects and the sequencing of the fulfilment of commitments are in place by June 2018 and, subject to a further assessment by the Council, a Decision should in principle be adopted before the end of 2018.”

1.28The Minister adds that the Government was “encouraged by the number of Member States who spoke about the importance of early decisions on third state participation” at the Council meeting where the latest PESCO documents were approved:

“To ensure complementarity with NATO we believe PESCO projects should be open to third states, as is the case with other projects led by the European Defence Agency (EDA). The UK has consistently called for third state participation in PESCO projects where there is clear value in doing so, including for our defence industry.”

PESCO projects

1.29The seventeen PESCO projects formally endorsed by the Council reflects the list provisionally adopted by the participating countries back in December 2017.22 They are a mix of capability development, training, and enabling initiatives that span different operating environments. The Council Decision lists all the projects, including a list of the PESCO participating Member States that have agreed to join that specific initiative.

1.30All participating Member States have joined at least one project, and at most two or more. Italy is the most prolific in participants, with involvement in 15 projects. Germany and Italy lead four PESCO initiatives each, while France, Spain, Greece, Belgium, the Netherlands, Slovakia and Lithuania are also lead countries for certain projects. The most popular initiatives are:

1.31In his Memorandum, the Minister identifies the ‘military mobility’ project as the one of principal interest to the UK:

“We recognise the need to improve Military Mobility across Europe and are engaged in multiple projects within both NATO and the EU. We also support the need for all PESCO projects to form part of a unified vision for improved security and defence across Europe. For the UK, NATO remains the cornerstone of Euro-Atlantic security and any EU work should complement NATO. We will therefore continue to champion greater capability cooperation between the EU and NATO.”

1.32However, as we set out in our Report last year on military mobility,23 the fact that this project cuts across broader legal barriers that fall within the EU’s competence—such as customs, transport or environmental protection—means it remains unclear to what extent the UK would directly benefit from any progress in this area in view of the Government’s decision to leave the Customs Union and the Single Market.

1.33The European Commission is due to set out its specific proposals for the removal of customs and regulatory barriers to the movement of troops and equipment within the EU in an Action Plan in spring 2018. That document may clarify to what extent the UK could expect to benefit from any further initiatives to remove legal hurdles once it becomes a ‘third country’ vis-à-vis the EU, but as a possible participant in the ‘military mobility’ project, and conversely to what extent this could require continued regulatory alignment with the EU after Brexit.

Previous Committee Reports

Seventh Report HC 301–vii (2017–19), chapter 1 (19 December 2017).


1 Article 31 of the Treaty on European Union makes CFSP measures subject to unanimity, except in certain circumstances (where each Member State can require unanimity if the measure would be detrimental for “vital and stated reasons of national policy”).

2 See “Background” below.

7 Explanatory Memorandum submitted by the Foreign & Commonwealth Office (19 March 2018). There was no scrutiny override, as the UK did not have a vote as a non-participating country.

8 See our Report of 19 December 2017 on military mobility in the EU.

9 The draft Withdrawal Agreement for the UK’s exit from the EU specifies that, during the transitional period, the UK will not be considered a Member State for the purposes of PESCO and therefore would only be able to participate on the same basis as other third (i.e. non-EU ) countries.

10 See our Reports of 30 November 2017 and 31 January 2018 for more information on the new European Defence Fund.

12 For example, the deployment of Irish troops remains subject to its ‘triple lock’: a UN resolution, a formal decision by the Irish Government, and a vote by the Dáil.

13 See our Report of 13 November 2017 for more information on the reflection paper.

14 CARD is a stocktake of the European Capability Development landscape that provides Member States and the European Defence Agency with a “clear understanding of current capabilities, shortfalls, Member States’ plans, and potential areas for cooperation”, the initial results of which are likely to be published in autumn 2018.

15 The CDP is the EDA’s strategic tool for defining future European capability needs in the short and long term and sets priority areas to guide Member States in their development plans. The CDP is expected to be updated in May/June.

16 Non-executive military operations are operations that provide an advisory role to the host nation only. By contrast, executive operations are operations mandated to conduct actions in replacement of the host nation’s own armed forces.

17 See our Reports of 30 November 2017 and 31 January 2018 for more information on the new European Defence Fund.

18 Explanatory Memorandum submitted by the Foreign & Commonwealth Office (19 March 2018).

21 The Minister informed us that the Council’s Legal Service proposed a Council Recommendation for the main elements of a common set of governance rules for projects instead of Council Conclusions, which are politically binding on all Member States.

23 See our Report of 19 December 2017 on military mobility in the EU.




3 April 2018