Documents considered by the Committee on 12 September 2018 Contents

9European Peace Facility

Committee’s assessment

Politically important

Committee’s decision

Not cleared from scrutiny; further information requested; drawn to the attention of the Defence, Foreign Affairs and International Development Committees

Document details

Proposal for a Council Decision establishing a European Peace Facility

Legal base

Articles 28(1), 41(2), 42(4) and 30 (1) TEU; unanimity

Department

Foreign and Commonwealth Office

Document Number

(39891), 9736/18, HR(2018) 94

Summary and Committee’s conclusions

9.1As part of a wider effort to make the EU Member States’ military operations more cohesive, and create a stronger Common Security & Defence Policy (CSDP),71 the European Commission in June 2018 tabled a proposal for a European Peace Facility (EPF). This would be a €10.5 billion financing mechanism, funding of EU operations with military or defence implications—such as Operation Sophia in the Mediterranean, or EU support for the AMISOM mission in Somalia—from 2021 until 2027.72 Controversially, the EPF could also be used to provide third countries, including developing states, with military equipment, training and infrastructure. The Facility would replace the existing Athena mechanism for the ‘common costs’ of EU military operations, as well as the EU’s African Peace Facility, from January 2021.

9.2As we describe in more detail in “Background” below, the European Peace Facility would mark a substantial change in the EU’s approach to funding defence and military operations. For example, its proposed annual budget is substantially larger than the current yearly centralised EU spend on CSDP operations; it provides a clear legal and financial framework for capacity-building of the security forces of non-EU countries, including the provision of military equipment; and the definition of “common costs” of EU operations—which are borne by the Facility—would be expanded significantly, from 10 to 15 per cent of total costs at present to a maximum of 45 per cent of costs under the EPF.

9.3Management of the EPF would be the responsibility of the EU’s High Representative with the support of the European External Action Service (EEAS), with political oversight provided by a Committee of Member State Representatives. Funding from the Facility would normally require a unanimous decision by the EU’s Foreign Affairs Ministers, although it would also allow the European External Action Service to finance defence or military operations in developing countries with only ambassadorial support within the framework of the aforementioned Action Programmes laid down by the Foreign Affairs Council.

9.4The Decision establishing the European Peace Facility is still subject to negotiations among the Member States in the Council. As it concerns a foreign policy mechanism, each EU country has a veto over the legal act and its formal adoption is not expected until 2019 at the earliest. The Facility is scheduled to become operational in 2021, after the end of the proposed post-Brexit transitional period on 31 December 2020.

9.5The Department for International Development submitted an Explanatory Memorandum on the proposal in June 2018. As the Facility would become operational—and require funding—after the UK has ceased to be a Member State, the UK would not be a contributor to its coffers by default.73 As a result, the Memorandum provides little substantive assessment of the merits of the EPF or how it would differ from the existing financing mechanisms for CSDP operations. The Minister for International Development (Lord Bates) does note that the Facility allows for voluntary ‘third country’ contributions for specific activities, opening the door to continued UK-EU cooperation on particular defence missions after Brexit. The Minister notes that this is an option that is being actively considered, especially with respect to the UK’s current support—via the EU’s African Peace Facility—for peace operations in Africa, and Somalia in particular.

9.6We thank the Minister for his Explanatory Memorandum on the European Peace Facility. Given the significant nature of the changes being proposed to the funding of the EU’s military operations in the context of its Common Foreign & Security Policy, and the possibility that the UK may contribute to the European Peace Facility as a non-Member State, we retain the proposal under scrutiny and ask the Minister to keep us informed of developments in the Council’s deliberations on the proposal.

9.7We also draw the proposal for the Facility to the attention of the Defence, Foreign Affairs and International Development Committees. They may wish to consider in more detail the implications of the EPF for the UK’s cooperation with the EU on defence and development matters after Brexit.

Full details of the documents

Proposal for a Council Decision establishing a European Peace Facility: (39891), 9736/18, HR(2018) 94.

Background

9.8The Treaty on European Union, in Article 41, prohibits the use of the general EU budget for “expenditure arising from operations having military or defence implications”. This effectively prevents the European Union from having any autonomous budget for defence operations which would be subject to the management of the European Commission or budgetary control by the European Parliament. Instead, Common Security & Defence Policy (CSDP) measures with “military or defence implications” are usually74 funded by the Member States (with the exception of Denmark, which has an opt-out from participation in the CSDP) through a mechanism known as ‘Athena’, first established in March 2004.75

9.9Athena’s current detailed legal base was adopted by Council Decision in 2015, based on Articles 26 and 41 of the Treaty on European Union (TEU).76 The basic rules on contributions are set out in article 41 TEU: the twenty-seven participating Member States contribute an annual share based on their Gross National Income, with the UK’s share at approximately 15 per cent. The Athena Decision lists the types of “common costs” that can be funded via the mechanism, such as HQ running costs, lodging of forces and medical evacuations. There are currently six active EU military operations77 which receive Athena financing, as well as six operations which received funding before they were wound down.78

Other EU external security support mechanisms

9.10In addition to Athena, the EU has also established a separate “African Peace Facility” (APF).79 This is funded from the European Development Fund (which is also separate from the general EU budget to respect the restrictions on use of the budget for military operations).80 The APF, launched in 2004, provides financial support for African regional organisation—including the African Union—to resolve conflicts and increase security. APF funds can be used towards costs incurred by African countries that are deploying their peace-keeping forces under the banner of such regional organisations in another country. One example of this is the African Union Mission in Somalia (AMISOM), aims to provide a basic level of security in the country and eventually hand over its responsibilities to the Somali armed forces.

9.11Finally, the EU has also made a foray into providing support for developing countries in increasing the capacity and capabilities of their defence forces. This is currently done under the Instrument contributing to Stability & Peace (the IcSP).81 As this is a development policy programme funded from the EU budget, its capacity to contribute to the Common Foreign & Security Policy is limited; for example, it cannot be used to provide the armed forces of partner countries with military equipment such as armaments or ammunition.

Replacing Athena and the African Peace Facility with a European Peace Facility

9.12On 13 June 2018, the EU’s High Representative for Foreign Affairs (Federica Mogherini) proposed a wholesale replacement of the Athena mechanism, the African Peace Facility and part of the Instrument contributing to Stability and Peace from 2021 onwards. Instead, Common Foreign and Security Policy (CFSP) operations with military implications would be funded through a new “European Peace Facility“ (EPF). This would be established in alignment with the EU’s next long-term budget (the Multiannual Financial Framework 2021–2027), and remain active for the same period.82 The EPF is part of a broader set of proposals for the EU’s funding of external actions in the coming years, including notably the new Neighbourhood, Development & International Cooperation Instrument (NDICI), the Instrument for Pre-Accession Assistance, and the European Defence Fund.83

9.13The Facility would have a budget of €10.5 billion over the seven-year period, which would continue be funded by the Member States directly given the restrictions of the EU Treaties. Funding from the Facility would be used only for activities that could not be funded from the general EU budget because of Article 41(2) TEU, which the Commission has divided into three broad categories:

9.14Under the Commission proposal, authorisation to provide funding from the Facility would require the agreement of the Member States, either via a Decision relating to a specific operation or by adopting “Action Programmes”, which would be a “general framework for assistance measures to be undertaken over a certain period of time” with a specific geographic or thematic focus. Such decisions will require unanimity among the twenty-six participating Member States at ministerial level in the Council. Any necessary “assistance measures”84 to give effect to Action Programmes would be taken by the High Representative, after obtaining the consent of the Political & Security Committee (a body where the ambassadors of all Member States are represented).

9.15On a day-to-day basis, the Facility would operate under the responsibility of the EU’s High Representative, a Vice-President of the European Commission, with the support of the European External Action Service. Its political oversight would be handled by a new Committee of Member States (the EPF Committee),85 which would “take key decisions on the management of the Facility” such as approving budgets and accounts. Where the Committee was unable to agree on a specific matter, it could be referred up to the Council’s Political & Security Committee for a decision at ambassadorial level.

9.16Overall, there are a number of notable differences between the European Peace Facility and the current Athena mechanism:

9.17The Minister for International Development (Lord Bates) submitted an Explanatory Memorandum on the European Peace Facility proposal on 27 June 2018. He describes the Government’s support for the proposal’s focus on capacity building, and welcomes the proposed provisions on voluntary ‘third country’ participation in the Facility:

“The UK wants to cooperate with the EU on peace and security as part of a deep and special security partnership […]. The EPF could provide a mechanism for continued UK and EU cooperation in security and defence, and we welcome the provisions for third party contributions and the ability to earmark funds for specific actions. […] It is not yet possible to determine whether it will be in the UK’s best interests to participate in any future EU instruments.”

9.18Even where the UK were to contribute voluntary to specific CSDP operations via the European Peace Facility after it has left the EU, the Government is of the view that “it is unlikely that [the UK] would have to contribute to common costs, which are usually only mandatory for Member States”.

9.19As regards specific examples of continued UK-EU cooperation on common security missions, the Minister notes the Government is still considering whether it wants to continue to support African-led peace operations that it currently supports via the EU’s African Peace Facility, in particular the AMISOM mission in Somalia. He adds that any continued UK support for operations currently funded via the APF under new European Peace Facility would not be able to rely on “Official Development Assistance” (ODA), given the military focus of the Facility which does not meet the criteria for ODA. As such, “other funds would have to be found”.

Our assessment

9.20The proposal to create the European Peace Facility is another step by the European Commission towards a more collective EU defence policy, driven in part by the UK’s departure from the EU and consequently the Government’s loss of veto over these developments. It fits a broader pattern of EU defence policy initiatives over the last two years, including the establishment of Permanent Structured Cooperation on defence, the creation of the Military Planning & Conduct Capability unit in Brussels, and the launch of the European Defence Fund.

9.21The proposal for the European Peace Facility is likely to be amended substantially by the Council given its subject matter, and the fact that every Member State has a veto over the draft Decision establishing the Facility.87 There will also need to be careful consideration of how the implementation of the European Peace Facility can be coordinated with the EU’s wider Common Foreign & Security Policy and external relations, such as its development assistance policy under the new Neighbourhood, Development & International Cooperation Instrument.88

9.22We believe it is likely that, had the UK not notified its decision to leave the European Union, the Government would have been opposed to the proposal for the European Peace Facility as drafted by the Commission. When the current Council Decision underpinning the ‘Athena’ mechanism was adopted in 2015, the then-Minister for Reserves at the Ministry of Defence (Sir Julian Brazier) told our predecessors that the UK had “[rejected] proposals that would unnecessarily expand agreed eligibility on common funding”, including “proposals that would expand agreed eligibility on common funding for: Battlegroup Transport Cost; Barracks and lodging for the whole force and Exercise costs”.89 Some of these are now included in the proposed common costs under the European Peace Facility.

9.23Even given the UK’s departure from the EU, the proposal is likely to encounter opposition throughout the legislative process—from both Member States and civil society groups—given that it could be used for “the provision of […] assets [and] equipment” to the armed forces of developing countries. We expect this to be controversial given the EU’s policy of enlisting the help of developing countries—for example in the Sahel—in preventing refugees and migrants from reaching the EU’s southern Member States. For example, in the 2016–17 discussions around the expansion of the use of the Instrument contributing to Stability & Peace—an EU development policy programme—both Sweden and Luxembourg expressed concerns about the use of EU funding for security purposes, although that was linked specifically to the deployment of EU development assistance for matters not covered by the OECD’s criteria for Official Development Assistance (ODA).90

9.24More generally, other Member States are likely to be wary of the significant role of the European Commission—via the High Representative and the European External Action Service—in the management of the Facility. However, given that the UK appears to have been the main opposition to the expansion of ‘common costs’, that element of the Commission proposal may garner the necessary support among Member States more easily.

9.25Irrespective of what its views may have been had it remained a Member State, the UK’s position on the Facility has inevitably been coloured by its perspective as an impending non-EU Member State. Under the current terms of the draft Withdrawal Agreement, it will not be bound by the Decision establishing the European Peace Facility when it becomes operational in 2021 and, by extension, not be under a requirement to contribute towards its financial reserves.91

9.26However, the EPF will be open to voluntary contributions by third countries, subject to the prior agreement of the Council. That would be at the Government’s own discretion, if it can reach agreement with the EU about the parameters of its financial contribution and participation in the relevant operations. As noted, the Foreign Office is actively considering this possibility as a way of continuing existing UK support for peace operations in Africa, which it currently support—in part—via the EU’s African Peace Facility. If it does go down this route, however, the proposed Decision would exclude the UK from being present when votes are taken in the EPF Committee even if it concerns operations to which it contributes financially or in kind.92

9.27Given the politically controversial nature of the proposal and the possibility of future UK involvement in EU CSDP operations on an ad hoc basis, we have drawn the proposal to the attention of the Defence, Foreign Affairs and International Development Committees, which may wish to consider it further as part of their deliberations on the UK’s future partnership with the EU on foreign policy matters. We have retained the European Peace Facility proposal under scrutiny pending deliberations within the Council on the final legal text.

Previous Committee Reports

None, this is a new proposal.


71 See for example our recent Reports on Permanent Structured Cooperation on defence or the European Defence Fund.

72 The EPF is part of a broader set of proposals for the EU’s funding of external actions in the coming years, including notably the new Neighbourhood, Development & International Cooperation Instrument (NDICI), the Instrument for Pre-Accession Assistance, and the European Defence Fund. We have considered those proposals in separate chapters of this Report.

73 During the proposed post-Brexit transitional period, scheduled to last until 31 December 2020, the UK would remain a contributor to “the financing of […] the costs of Common Security and Defence Policy operations” as if it were still a Member State, i.e. under the Athena mechanism (article 149 of the draft Withdrawal Agreement). Should the Government consider an extended transitional period which lasts longer beyond 31 December 2020, the situation with respect to UK contributions to the Facility will need to be reassessed.

74 In addition to the Athena mechanism, CSDP operations can also be funded by voluntary contributions from Member States.

75 On 22 September 2003, the EU’s Member States decided that the Union should “acquire the capacity to flexibly manage the financing of common costs of military operations […] by setting up […] a permanent financing mechanism” (Competitiveness Council conclusions). This was followed by the first Athena Decision (Council Decision 2004/197/CFSP), adopted on 23 February 2004.

77 EUFOR ALTHEA (Bosnia Herzegovina); EUNAVFOR ATALANTA (Horn of Africa); EUTM Somalia; EUTM Mali; EUNAVFOR MED; EUTM RCA.

78 The Council also lists these previous operations funded by Athena: AMIS 2 (Sudan) (July 2005— December 2007); EUFOR RD CONGO (June 2006—November 2006); EUFOR TCHAD RCA (January 2008—March 2009); EUFOR Libya (April 2011—November 2011); EUFOR RCA (February 2014—March 2015) and EUMAM RCA (January 2015— July 2016).

80 The European Commission has proposed to ‘budgetise’ the European Development Fund for the 2021–2027 period, which would preclude its use as a funding mechanism for military or defence operations. The UK currently pays approximately £30 million per year to the African Peace Facility via the EDf.

82 At the end of the next budgetary period, the Member States would have to decide whether to keep the European Peace Facility in place, replace it, or abolish it.

83 We have considered the proposals for the NDIC Instrument and the European Defence Fund in separate chapters of this Report.

84 Assistance measures would be limited to EU “support to the armed forces of a third State or to military peace support operations led by a group of third States, a regional or an international organisation, as well as support aimed at building the military capacities and capabilities of those organisations”. It could not be used to launch EU executive operations.

85 The EPF Committee would replace the Athena Mechanism’s “Special Committee”, which fulfils an analogous role at present.

86 See for more information on the EU’s next long-term budget our Report of 4 July 2018.

87 The European Parliament is not co-legislator for this proposal, but may issue a non-binding Opinion.

88 The EPF is part of a broader set of proposals for the EU’s funding of external actions in the coming years, including notably the new Neighbourhood, Development & International Cooperation Instrument (NDICI), the Instrument for Pre-Accession Assistance, and the European Defence Fund. We have considered those proposals in separate chapters of this Report.

89 See the Committee’s Report of 18 March 2015 for more information.

90 See Council document 15133/1/16 (5 December 2016).

91 During the proposed post-Brexit transitional period, scheduled to last until 31 December 2020, the UK would remain a contributor to “the financing of […] the costs of Common Security and Defence Policy operations” as if it were still a Member State, i.e. under the Athena mechanism (article 149 of the draft Withdrawal Agreement). Should the Government consider an extended transitional period which lasts longer beyond 31 December 2020, the situation with respect to UK contributions to the Facility will need to be reassessed.

92 The proposed Decision states: “The representatives of contributing third States and of voluntary contributors shall participate in the proceedings of the Committee when an item under discussion directly relates to their financial contribution. They shall neither take part in nor be present at its votes”.




Published: 18 September 2018