Spending on Covid-19 crisis may blow apart EU defence ambitions

Coronavirus recovery efforts have thrown into doubt a multi-billion euro plan to energise the European Union's defence sector, potentially derailing the bloc's future military cooperation.

The billions of euros needed for the 2021-2027 budget may not materialise as member states – buckling under unforeseen economic pressure – concentrate on ways to offset the damage wrought by Covid-19.

Chairing a video conference of defence ministers Tuesday, EU foreign policy chief Josep Borrell warned against cuts to defence spending, arguing the virus was a new threat likely to "deteriorate the security environment” in the coming years.

While he conceded the pandemic would demand resources, Borrell said it would also demand a stronger Europe.

Analysts say a major drop in spending could undermine EU efforts to wrestle free from its longstanding military dependence on the US, while the absence of a cohesive defence strategy has drawn concerns over Europe's weakened position on the global stage and its ability – or lack thereof – to protect its interests.

“The proposed cuts to the EU's defence budget will not put an end to the EU's ambitions,” says Sophia Besch, a research fellow focusing on defence and security policy at the Centre for European Reform.

“But they show that, on defence, the union is only as effective as member-states allow it to be.”

Longstanding uncertainty over budget

Under the most recent budget proposal, the European Defence Fund, which would co-finance collaborative projects, would be cut in half from €13 billion to about €6 billion.

Even before Covid-19 came to Europe, deep cuts to defence were already on the table – with talks between the 27 members over the next long-term budget having been blocked for more than a year. Add to that the funding gap left by the UK's departure from the bloc. 

Newly appointed European Defence Agency chief Jiri Sedivy said cuts right now would be especially disappointing given that defence budgets have only recently recovered from the shock of the global financial crisis.

Tuesday's video conference, the second in six weeks, was also attended by Nato Secretary General Jens Stoltenberg and UN peacekeeping chief Jean-Pierre Lacroix. 

It centred on the strategic implications of Covid-19 in the field of defence and security, with EU defence ministers welcoming the creation of a military task force to help enhance the contribution of the armed forces in responding to the pandemic.

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The video conference also comes as the European Commission gets set to present its revised budget proposals. Estimates by the analytics firm Avascent say Europe's defence budget stands to lose anywhere between 20 - 50 billion euros in 2020. 

“This represents a reduction of between 7.8 and 21.1 percent of previous estimates, which assumed that European countries would spend $265.4 billion (244bn euros) on defence in 2020,” the company said in a report.

“In even our most optimistic scenarios, Covid-19 seems highly likely to trigger a suspension in the recent trend of defence spending growth in Europe.”