It has been a pleasure, Federica, to work with you, your team and the EEAS on the reflection paper. I also want to thank to Commissioner Bieńkowska, her team and DG Grow for the good cooperation and the hard work they have done on the Defence Fund.
I also want to thank many colleagues who have facilitated the re-allocation of the budget which we are about to propose, as without the contribution of many of our colleagues it would not have been possible.
First, on the defence reflection paper and the entire European defence cooperation:
We have taken steps, which are significant. We have moved forward much more in 6 months' time than during the last 60 years. Even if you add one year perspective, for example the EU-NATO declaration. There are a whole range of issues, which show how concretely EU and NATO are cooperating. It is not just a declaration, but a set of measures. Also PESCO: defence ministries' commitment to find a solution to battle groups' financing. Those all are significant changes, which we have not seen so far happening in Europe.
This probably tells about the mindset and the shift in member states' mind that we have to do something more. We have to address the security threats in a more united manner than before.
That is why the reflection paper, as Federica explained, is a Commission contribution for our citizens, for various groups of stakeholders, but of course for national parliaments and governments to look at what we could do. Everything will depend on the political will of the Member States.
Maybe I repeat what Federica said, there are two disclaimers:
- Everything will depend on the Member States and the Commission does not want to get more power to itself;
- Secondly, we will not undermine the value of NATO.
The treaties basically allow Member States to do a lot. Even a movement to common defence is possible. Now it is a matter of speed and of level of ambition what the Member States want to choose.
Is there a need for operational, well-trained, well-designed and organized joint capability to provide solidarity in the case of cyber, hybrid and terrorist attack? I think yes, there is a need.
We already have solidarity and security guarantee clauses in our treaties. But I think it is time to operationalize them, to create well-functioning, well-trained capability to react in case of cyber, hybrid and terrorist attacks. We could create, if we so wish, the European pillar of NATO, complementing the work NATO is doing and strengthen the European power, role and contribution for the common good.
When looking at the economic side of defence cooperation, as everybody knows, we do everything 28 times or in the future 27 times. It creates an enormous debt burden, which has led already now to enormous security and efficiency deficit. Even if all EU Member States, especially those that belong to the NATO, would contribute 2% of GDP to defence, I wish that they don't do it in the current manner, separately. Because 2% of GDP spent separately provides less security than if part of the money is used jointly. So as important as the amount of money, is how to use it.
In this period we have created a European Defence Fund, which has three different angles.
First angle is defence research funding. For the first time in EU history, starting in this year already, defence research is being funded from the EU budget. Actually today, we will make the first calls for tender, which mean that three research organisations can apply together resources from the EU budget for joint operations. In the next MFF period, there is a pre-condition of getting together eight organisations. We really want to change the way defence research is done in Europe: pooling together resources, both human and material resources. We will allocate resources this year €25 million, next year €40 million and €25 million in 2019; altogether €90 million in three years.
Second element in the Defence Fund concept is the support for joint development of capabilities. It means that we will use EU budget resources for prototype financing. There must be at least three companies from a minimum of two countries which can apply for resources, grant money, for building joint prototypes, for example in drone or satellite projects. So again, the aim is to pool together human and material capital to strengthen our security and defence industry.
For 2019-2020 we have re-allocated resources from EU-budget worth €500 million for these purposes. Our proposal is, that for the next MFF period it would be one billion Euros per year. So we expect one billion Euros per year to trigger roughly speaking five billion euros for joint projects per year. If you put this together with research funding, this will be a game changer, in terms of strengthening defence research and industrial capabilities.
One additional remark on this: we will pre-allocate some resources to small and medium sized entreprises, so the fund is not only for big countries and big projects, but also for smaller companies. We want to make sure that everybody can participate.
The third element in the Defence Fund is to help Member States to do joint acquisitions of capabilities. It means for example jointly buying helicopters to reduce costs. The Commission can offer practical support, helping them to deploy the most suitable and cost-saving financial arrangements and provide on-demand tools such as templates for terms and framework agreements as well as advice on ownership structures.
For instance, if 10 Member States would like to buy satellite capacity: instead of buying them separately, they could set up an "ESM of defence" with paid-in capital. Then the special purpose vehicle could do the purchase on behalf of the Member States, which would help them to circumvent different budget cycles and reduce the costs.
I will stop here. Lots of concrete things are happening and have already happened. Now we need a debate of where to go, because the current way to operate is not efficient enough and it does not lead to maximum security for our people.