Select Committee on European Union Fifteenth Report

PART 4: CAPABILITIES (continued)

62. Although EU Member States need not aspire to the level of defence spending that the US maintains, defence expenditure is at a historically low level and the differential between European members and the US is widening. The Sub-Committee received much evidence that most EU Member States hoped to be able to provide the resources for the headline goals from efficiency gains or the reallocation of existing resources. Mr Jones Parry summed up the three options available to Member States if they wished to achieve the capabilities necessary for the headline goals: "One is to spend more; the second is to spend money more efficiently; and the third is to change the pattern of expenditure to meet the kinds of challenges that are now more likely to be confronted." (Q28)

63. Unfortunately, it is very unlikely that the capabilities will be achieved through efficiencies and the refocusing of expenditure. Few EU countries have undertaken strategic defence reviews in the way that the United Kingdom has, and many have not adapted towards producing the rapidly deployable and sustainable forces necessary for the conduct of Petersberg missions. But even if strategic defence reviews were to go some way towards improving the situation, it is unlikely that the headline goals can be achieved without an increase in expenditure by all EU countries.

64. Others have suggested that some savings can be made through the creation of a pan-European procurement system[30] or through the consolidation of the European armaments industries. In terms of procurement, evidence drew attention to the fact that the United States has a major advantage in that it can buy more cheaply because it buys in bulk: United States requirement for 3,000 joint strike fighters is twenty times as large as that of the United Kingdom[31] and their bargaining power with manufacturers is accordingly greater, since larger production runs enable manufacturers to save costs. If Europe had a procurement agency, Professor Keith Hartley of the Centre for Defence Economics at the University of York suggests that savings in the region of 10 to 15 per cent could be made (Q116). An embryonic attempt to put in place a single customer organisation is being made through an organisation (Organisation Conjointe de Co-opération en Matière d'Armement) known by the French acronym OCCAR, following on from previous unsuccessful attempts based on the juste retour system. However, much as some would like common procurement, there are dangers: Mr Marwan Lahoud, Director of Strategy at Aerospatiale Matra said that "a unique procurement body for Europe would be a great achievement … At the same time, all the experiences during the last 25 years led more to unproductive bureaucracy than to efficient procurement bodies." (Q111) The Secretary of State conceded that "we are still quite some way away from the day when we will decide to procure equipment collectively irrespective of the nationality of the producer." (Q372)

65. In theory, a consolidation of European defence manufacturers could bring savings to European defence ministries. This year saw the creation of EADS, the European Aeronautic, Defence and Space Company, which combines France's Aerospatiale Matra, and Germany's DASA. It is believed that companies like this will be able to compete against US companies, especially Boeing, Raytheon and Northrop-Grumann. In doing so, EADS might be able to offer European purchasers state-of-the-art equipment at competitive prices: such equipment has always been available from US manufacturers, but it is not always available from European suppliers. However, there are serious doubts as to whether a European consolidation of defence industries will really make a difference to costs. In any case, several European defence companies will prefer to align with American companies.

66. Evidence suggests there is a need for new injections of expenditure over a sustained period to ensure a European force of the size and capability envisaged. For example, the gap between the US and the EU in one area, heavy air lift, is very great. Evidence suggests for EU Member States to achieve even half of the US's capability would require the expenditure of $50 billion. The sums involved in creating the autonomous capability inspired by Helsinki are thus quite staggering. But according to Dr Anand Menon of the Centre for European Politics, Economics and Society at the University of Oxford, "No west European state … has the resources to invest in the kinds of hardware that a truly autonomous defence would require." (p133) There will therefore need to be a serious concentration on those capability gaps which can be closed.

67. An additional problem is the poor research and development practices in Europe. Evidence from Mr Lahoud made clear that "we are spending, in Europe, less money on this activity and we are spending it in a less efficient way." (p32) The US spends $35 billion per year on defence research and development (R&D) whilst the remainder of NATO spends only $9 billion. While the European members of NATO together spend about 60 per cent of the US figure on overall defence, duplication and inefficient national practices means they come no where near generating 60 per cent of the U.S. capability.[32] Unless this is addressed, the widening technology gap will soon lead to European troops being unable to operate alongside American troops because of their "technological backwardness".[33]

68. Many of the gaps in capabilities have been already identified by NATO's Defence Capabilities Initiative and by the WEU's Audit of Assets and Capabilities.[34] For some EU Member States it is clear that an EU initiative in this area will be more likely to encourage greater defence expenditure since some political leaders and their electorates are more open to the idea of a branded European defence capability. For the moment, few countries seem willing to commit themselves to the increased expenditure necessary to develop the capabilities required. The United Kingdom has, however, committed itself to large expenditure on the METEOR weapon system and to developing a heavy air lift capability[35], and it has significantly realigned the focus of its military capabilities as a result of its Strategic Defence Review. However, the United Kingdom's situation is the exception rather than the rule.

69. Even so, it is far from clear even that the United Kingdom and France are spending enough to satisfy the needs of the headline goals. Neither country is prepared to raise expenditure significantly[36]. Evidence from British ministers and officials makes clear their view that there is no need for more expenditure, though the Secretary of State for Defence, in evidence to the House of Commons Defence Committee on 22nd June, appeared to accept the need for the United Kingdom to spend more on defence. France is committed to increasing capabilities but reducing expenditure over the next five years.

70. The need for Germany to spend more on defence will be central to the success of the European defence initiative. This need seems to be recognised in Germany, although there remain significant pressures on the overall budget. According to General Naumann, "The big problem for my country is that the Government have announced a defence budget which I believe is absolutely insufficient to meet the requirements of Helsinki" (Q271). Germany spends only 1.5 per cent of its GDP on defence and needs to further refocus its defence priorities: it is widely recognised to have too many main battle tanks and too many conscripts. It also spends too little of its defence budget (13.6 per cent, compared with 27.5 per cent in the United Kingdom) on equipment, and much of its equipment is outdated.[37] A recent report from former President Richard von Weizsäcker recommends a refocusing of Germany's priorities, through a reduction in the number of conscripts from 130,000 to 30,000 and an increase in the number of crisis reaction force troops from 60,000 to 140,000. Even so, doubts remain concerning the effectiveness and sustainability of such a force without a significant re-equipping of German forces involving extra spending. The cost of this will be high: according to Mr Klaus Becher of the International Institute for Strategic Studies, "The cumulative defence investment backlog has been estimated between 15 and 30 billion DM (£5-9bn). Annual defence expenditures would have to be increased by at least 10 per cent to gradually catch up" (p80).

71. In one particular way, Germany represents a problem that many European countries face. Conscription is an issue that needs to be addressed across Europe. There are more than 1.9 million troops in Europe as a whole, compared to 1.4 million in the US, but evidence suggests they are vastly less effective. More than half of the troops in Europe are conscripts, while the US armed forces are entirely volunteer-based. There are some arguments in favour of conscription. In Germany, conscription underlines the concept of a "citizen army". At the same time it brings certain skills into the armed forces that might otherwise be lacking.[38] Moreover, for a country like Turkey, conscription is necessary to maintain security in the south-east of the country[39]. However, in many other countries too many resources are devoted to large, semi-professional armies where conscripts serve for too short a period, when the real need is for smaller, better-equipped armed forces that can be rapidly deployed. Some European countries—France, Italy, Spain and Portugal—have drawn this conclusion and have decided to abolish conscription, and even Turkey, where volunteers form 10 per cent of the armed forces, has considered similar action.

72. Conscription illustrates one critical issue for EU governments. It highlights the need for the EU to have the right quality of troops as much as the right quantity. In addition, it is also far from clear that 60,000 will be enough, or that the deployment period of 60 days will be fast enough, or that sustaining the forces for one year will be long enough. For example, troops have been deployed in Bosnia since 1992. Even though the headline goals may prove too modest for the full range of Petersberg tasks, it is far from certain that they will be attained by 2003. In addition, for all the talk of a "rapid reaction force", situations usually develop at a pace which requires troops to be deployed significantly sooner: the Falklands conflict, by comparison, was almost completed 60 days after the Argentine invasion, despite the huge distance which the task force had to cover. Of course, it is likely that spearhead troops will be available for deployment much sooner; but, as noted by Professor Michael Clarke of the Centre for Defence Studies, "The problem is not having spearhead forces necessarily, they are relatively easy to develop, but developing something behind the spearhead that gets there before the end of the 60 day requirement." (Q78)

73. A further issue concerns how the headline goal of 50-60,000 will be met by governments. It is not clear whether these troops will be "stand-alone" forces with no other commitments or "double-hatted" forces with other tasks possible. In April 1999, the United Kingdom Government signed a Memorandum of Understanding, earmarking 10,000 troops for potential United Nations duties. It will be important to establish whether the Government accepts that its own contribution will be readily available and not committed to other tasks, or whether some elements can be committed elsewhere. The EU's capabilities commitment conference in November this year may clarify this issue, and it is an issue to which we may return at some stage in the future.

74. While the headline goal is to be attained by the Member States of the EU, the contributions of other nations in missions will make an important contribution to a European defence capability. Many of the non-EU members of NATO can make a considerable contribution in terms of manpower, capabilities and experience in Petersberg missions: Norway, for example, is proposing a pool of 3,600 troops to be available for international peace operations (p59). It is highly desirable that non-EU countries are included in missions that involve the EU rapid reaction force, but this will require delicate handling, in particular where the non-EU states are members of NATO. It is unlikely that many missions will be undertaken by coalitions which consist purely of the members of the EU, and for this reason it will be vital to establish the most important capability of all, an effective and inclusive command and control mechanism.

30   See Hopkinson (p182). Back

31   See Hartley (Q116). Back

32   Figures quoted in William Drozdiak, Washington Post 7 March 2000. Back

33   Elinor Sloan, DCI: Responding to the US-led Revolution in Military Affairs, NATO Review, Spring/Summer 2000, pp.4-6. Back

34   The WEU Audit of Assets and Capabilities for European Crisis Management Operations was approved at the WEU Council of Ministers, Luxembourg 23-24 November 1999 and NATO Defence Capabilities Initiative at the NATO summit in Washington in April 1999. A good summary of the specific capability gaps is provided by Foster (pp171-172). Back

35   See Secretary of State (QQ365-6). Back

36   It is not yet clear whether the Comprehensive Spending Review of July 2000 will make a difference. Back

37   See Becher (p80) and Naumann (Q273). Back

38   See, for example, Becher (p80) and Rummel et al (p208). Back

39   See Park (Q408). Back

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