check against delivery

 

Changing landscape at global level

  • Good morning ladies and gentlemen and thank you for the invitation to participate to this very special event and discuss the future of European Defence cooperation. I will first analyse the security environment as we see it from the Commission perspective. And then say couple word on the ongoing defence projects we have in the Commission.
  • Globalisation, migration, geopolitical shifts (including historical partners like the United States), changing nature and balance of power, as well as increasing access of individuals to technological and social resources have raised the world’s vulnerabilities to new levels and are changing the security paradigm.
  • The diversification of threats and actors is generating new challenges to the defence and security communities, as well as to society as a whole.
  • The power and diversity of hybrid warfare will continue to increase, challenging security and governance systems. Since hybrid threats are transnational in nature, they can only be adequately addressed by collaboration among countries and all stakeholders. This implies a high level of trust along with willingness to engage in the conversation and action.
  • China's and Russia's power and influence on security are now considered almost at par with the United States. China is increasingly challenging Western military technological superiority and aspires to become a global naval power. In some capability areas, particularly in the air domain, China appears to be reaching near-parity with the West.
  • But the change of paradigm is not only affecting defence-related areas. Monopolisation of communication infrastructure increases the vulnerability of communication systems, raising concerns about access to private, public, commercial, and military communications. Smartphones are increasingly seen as weapons of mass manipulation.
  • Security and stability are also important factors for trade to prosper. The rules-based multilateral trading system, with the WTO at its core, has been one of the providers of such stability for the last 70 years. Safeguarding the multilateral trading system is essential for the EU, and thus a top priority.
  • However, we are now entering tougher times, and we see this system, which has served us well, facing increasing challenges. In the last year, we have also observed tensions between the United States (our largest trading partner) and China (our second largest trading partner) rise.
  • The US-China trade conflict has significant implications for the EU. It is not just about tariffs and market access, but it concerns fundamental disagreements on how an economy should be run.
  • China has ambition to become a leading global power. It is a legitimate approach, but the question is what tool it is willing to use in order to achieve this aspiration. We have some problems in this field.
  • The narrative on China in Europe has changed over the last six months. Our recent Joint Communication on China described China as “systemic rival and economic competitor” – at the same time, when China is our strategic partner in many areas.
  • In the United States, the Trump administration is presenting us with significant new challenges. The tariffs on steel and aluminium, threatened tariffs on cars and car parts, and other unilateral measures that are contrary to the WTO are examples of bilateral issues at hand.
  • To be very open with you we are for the first time in a situation where the presidents of the United States and of Russia share their view on Europe. The weaker, the more fragmented, the better. This thinking is based on the view of the world as a zero-sum game.
  • And it means that we must be ready to defend our interests and values.

EU’s approach on defence

  • Over the past years, EU Governments have started to redefine their views on security and defence aspects with the conclusion that they need to do more to ensure the security of citizens in the European Union, and that no Member State is capable of handling the emerging challenges on its own.
  • We have practiced isolated and non-coordinated approaches for decades. Now, without doubt, we can say that they do not deliver. Our defence industry is fragmented along national lines. Still, 80% of defence procurements are run on a purely national basis.
  • We do not spend enough on defence research and especially not on collaborative defence research, which is essential for our defence industry’s future competitiveness. Consequently, we lag behind in developing innovative technologies and systems for our military.
  • Not only do we invest less in defence, but we invest inefficiently. We produce too many military systems in kind but insufficient in number – systems too expensive and too difficult to interoperate.
  • Lack of cooperation between Member States in the field of security and defence is estimated to cost between EUR 25 billion and EUR 100 billion. This is not how we can face the challenges ahead of us. We can do better if we cooperate more.
  • With all the new initiatives launched over the past three years, Europe has shown its readiness to reconsider its approach to defence and the role it would like to play.
  • The Commission uses its competence in industrial competitiveness and research to contribute to the Union's objective for a Europe that protects, empowers and defends.
  • But in discussions on the European Defence Fund, we have often faced accusation that we are aiming to remilitarise Europe, that we intend to transform Europe into a military power. Others claimed that the Fund would compete with or duplicate NATO. We were accused that the Fund is a protectionist instrument.
  • Neither of those criticisms are correct. Europe needs to do more to become a stronger security provider, first and foremost for its own security needs, but also to reliably share the burden of responsibilities in the framework of NATO.
  • The problem is not that we are duplicating something with NATO, but the problem is that we are duplicating everything 28 times.
  • The European Defence Fund, with its research and capability components, as well as other defence initiatives aim at supporting a transformation into a more collaborative and effective, pan-European effort in defence affairs.
  • From our perspective, the Union will only be able to maintain its role as a security provider if it retains a modern, competitive and innovative defence industrial base strengthening Europe's strategic autonomy. There is no genuine security unless it is backed-up with cutting-edge military capabilities available in the Union and that provide technological superiority.
  • The Commission's actions are thus focused on strengthening the European defence industry. We aim to support truly European collaboration between companies and Member States to develop the capabilities our military needs in the future in a more efficient way.
  • We also believe that the defence sector will become stronger and more competitive when cooperation includes a broad participation of SMEs. Therefore, we have focused on SMEs especially those, which are involved in cross-border cooperation.
  • As a first operational step in the area of research, we have launched in 2017 the Preparatory Action on defence research with a proposed budget of EUR 90 million over three years for collaborative research projects. As a result of the first calls for proposals, we have 5 research projects running and 3 more starting soon.
  • The level of interest from the industry side and the quality of the proposals have been much beyond our expectations, which has proven how much such a programme was needed and how much could be done even with limited funding.
  • With the calls for proposals of 2019 we address the critical area of electromagnetic spectrum dominance and test the category of future disruptive technologies, such as the artificial intelligence and the quantum technologies.
  • As a precursor programme for the capability development window of the Fund, the European Defence Industrial Development Programme was launched at the beginning of this year. It has a budget of EUR 500 million for 2019-2020 and will allow to co-finance collaborative projects supporting joint development of defence capabilities beyond the research phase.
  • The two year work programme, prepared in close cooperation with Member States, was adopted in March. A first set of 9 calls for proposals was published in April on a broad spectrum of topics such as unmanned vehicles, naval platforms, communication networks, earth observation, command and control capabilities, cyber and electronic warfare. A second round of calls for proposals is foreseen for early next year 2020.
  • With the proposal for the European Defence Fund under the next EU financial budget framework from 2021-2027, we are going further, confirming the commitment of the Commission in this area. The European Commission has proposed EUR 13 billion budget line and we believe it can become a game changer in our defence cooperation.
  • The European Defence Fund may become a big player which encourages member states and their industries and small companies to come together to contribute to the European security.
  • While the sums earmarked are important, the real value of our actions comes from a change of the mind-set especially in the defence sector. Already now, after three years of increased involvement in this area, we can see how national silos are falling paving the way for a more collaborative thinking about military capabilities.
  • There is still a long way to go, of course. But we can see how our initiatives encouraged Member States and, in consequence, companies to talk to each other, seek European solutions and explore a potential that remained untapped for decades. We believe that this is the right way forward for Europe. Thank you very much.