“From the smallest to the biggest EU country, no Member State can guarantee security all alone”. So said Michael Barnier, Commissioner for the Internal Market, when announcing the creation of the EU Defence Industries Task Force. Formed in 2011, the Defence Industries Task Force is a Commission-led group which will deliver recommendations on how the EU could support the European arms industries. The group comprises representatives from many of the Commission Directorate Generals (DG), including Enterprise, Competition and Trade, as well as the European Defence Agency and the European External Action Service. Its recommendations will soon be adopted by the College of Commissioners in the form of a Communication to the Council and the Parliament. The Communication is not yet public, but members of the Task Force have spoken to the European Parliament and this, combined with media reports, means the content can be predicted with a reasonably high-level of accuracy. So, what might we expect?
Commission for the Internal Market Michael Barnier, a member of the Defence Industries Task Force. Credit: European Commission
First, expect to read that supporting the arms trade, because of its direct link to military power, is essential to European security. The ‘capability shortfalls’ in Libya, the US ‘pivot’ to Asia Pacific, instability in the Middle East and North Africa, and new security threats such as migration and climate change, will be used to justify measures supporting European arms manufacturers. Supporting the arms trade is thought to directly sustain European military might. NATO Chief Rasmussen summed up this thinking a number of weeks ago when speaking to the European Parliament: “We Europeans must understand that soft power alone is really no power at all. Without hard capabilities to back up its diplomacy, Europe will lack credibility and influence”.
Second, the Communication will again attempt to bring the arms trade under the rules of the internal market. European arms manufacturers are still organised in national blocks and receive significant support, in the form of subsidies and preferential access to government contracts, from their ‘home country’. This support permeates even the highest offices of government. Since coming to power in May 2010, UK Prime Minister David Cameron has made numerous trips abroad to promote British-made arms. The Commission, looking through the lens of competition and free markets, sees the European defence market as inefficient. As has happened with many former state owned industries, the Commission would like to see the defence market liberalised. It took steps in this direction in 2009 by introducing two Directives on defence procurement, but they have yet to be fully implemented by Member States. The Task Force is likely to recommend that they be given more credence. Article 346 of the Treaty of Lisbon allows Member States to exclude the procurement of “arms, munitions or war material” from the rules of the internal market, but the scope of the exemption is contested. In the Communication from the Task Force, the Commission may try to implement a more strict interpretation.
Third, the Communication will suggest that the Commission creates a strong ‘defence industrial policy’. This could be through creating common European standards for defence technologies and equipment; promoting regional specialisation defence technologies; providing support to small- and medium-sized enterprises; and opening up EU research funding to defence. The EU’s research funding is currently explicitly civilian in nature, but it has long been the goal of policymakers to use the Research Framework Programmes to develop military technologies. The Foreign Affairs Committee of the Parliament issued a strongly worded commentary on Horizon 2020, the next round of EU research funding, arguing that military research should be included.
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All the proposals contained in the Communication are ultimately about supporting a strong defence sector in Europe. Whether its growth and jobs, or defence and security, there always seems to be a reason to support the arms trade. But, there are four reasons why these arguments are weak.
New technologies: the new ‘Demon’ drone being developed by BAE Systems. Credit: BAE Systems
First, the military have a limited contribution to make to solving the security challenges and threats currently facing Europe as even the EU itself describes them. The EU’s European Security Strategy (and it subsequent update) pronounce the greatest threats to European security as climate change, energy security, arms proliferation, state failure, organised crime, and terrorism. If these are indeed the greatest threats facing European citizens, then it’s hard to see how increased military spending is going to solve any of them. If we are serious about tackling climate change, then developing new weapons system seems like an expensive distraction. Are we going to start shooting down CO2 as it enters the atmosphere? If we are concerned by energy security, then why do we not invest more in renewable technologies? Again, are we going to ‘secure’ our energy through the use of force? If we look carefully at the each of the ‘threats’ identified by the Security Strategy, not only do we find alternatives to military solutions, but we see that the nonviolent solutions are the best ones!
‘Guns, Debt and Corruption’, a report by Frank Slijper of the Transnational Institute.
Second, over the last decade, we have seen military spending across Europe increase systematically. And, whilst moderate cuts to defence budgets may see this trend reversing over the next few years, military spending is set to remain high. Defence expenditure in Western and Central Europe makes up around 28% of the global total, although Europe has only around 7% of the world’s population. Why does should this concern us? Well, a new report by the Transnational Institute argues that high military spending contributed to and is sustaining the current financial crisis. Their paper, ‘Guns, Debt and Corruption’, highlights the shocking fact that, at a time of austerity, EU military expenditure totalled €194 billion in 2010, equivalent to the annual deficits of Greece, Italy and Spain combined.
Third, the ‘jobs and growth’ arguments for supporting the arms trade which will be made in the Communication, are weak. Any policy making its way through the Commission at the moment must tick certain boxes. These criteria are informed by the Europe 2020 strategy; the Commission’s flagship initiative to promote economic growth. The Task Force will have to make the case that the arms trade is good for the economy. Aside from the fact that this way of thinking is irresponsible and ignores the highly political nature of arms manufacture, it is also bad economics. The arms trade in Europe exists to a large extent because of the huge support it is given by governments, not because it is uniquely competitive or has great potential for economic growth. If anything, the arms industry stifles growth by diverting resources away from sectors which have far more potential, such as renewable energy. As a 2004 report by BASIC, Oxford Research Group and Saferworld notes of the UK, “Far from providing jobs, government support for arms exports diverts investment away from more effective job-creating economic activity”. Or, in the words of the economics editor of the Financial Times: “You can have as many arms export jobs as you are prepared to waste public money subsidising”.
Air-to-air refuelling is something the European Defence Agency has been working on under its ‘Pooling and Sharing’ programme. Credit: European Defence Agency
Finally, the Task Force and the Communication are a waste of EU time and resources. The Member States will be wary of the document and its proposals, and thus will be unlikely to respond in any meaningful way. The reasons for this are two-fold. First, industry has very little to gain from the liberalisation of the defence sector. Supranational policies such as ‘Pooling and Sharing’ may in fact spell the end of generous (and generally unquestioned) state support for the arms trade, without which profits would be in serious trouble. Jobs losses and factory closures generally terrify governments. Second, given the unsteady ground upon which European Union finds itself, Member States are unlikely to commit to further integration in the area of defence; the future of the Common Defence and Security Policy (CSDP) is unclear and uncertain. The European Council plans to discuss defence this December, but outcomes are likely to be minor.
With all the challenges facing Europe right now, the Commission should not be focussing on an industry which has so little to contribute.
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