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PESCO Update By Howard Wheeldon, FRAeS, Wheeldon Strategic Advisory Ltd.





(I am grateful to Reuters for their excellent reporting of the ongoing PESCO story and from which, in part, I have made use of this morning in order to present this latest update commentary)

Last year the EU, in its infinite wisdom, launched what it called the “permanent structured cooperation on defence” – to be known as PESCO. The aim was based on an attempt to unify European defence thinking and to rationalise a fragmented approach to procuring and developing military equipment.

When launched there was seemingly broad agreement among the 25 states that signed up that non-EU countries, this would include the UK for example, should also be allowed to contribute to some of the projects. However, led by France a group of four major states that include Germany, Italy and Spain are seeking to set tough conditions that would limit participation of non EU member states, promote and focus only on promoting EU strategic autonomy that in the eyes of these four nations would hopefully bring about a reduction of reliance on the USA for defence. So for cooperation read disagreement and led by the Netherlands and Belgium together with another eleven of the countries that signed up who favour the more inclusive approach of including non-EU members a state of impasses continues to exist.

Portugal was one of the countries that supported the more inclusive approach being led by the Netherlands for seeking cooperation from allies who it is believed could bring added value, whether this be by established NATO players such as the US and UK, or other countries such as Norway, Switzerland or even Brazil.

There can surely be little doubt that the French led gang of four who are opposed to the inclusion of non EU countries, or allowing them to participate with their hands tied behind their backs, smacks of protectionism in order to protect their own large defence companies, particularly those in France and to ensure that UK and US based companies had very limited market access. To that end the US ambassador to NATO, Kay Bailey Hutchison, is reported to have warned the EU earlier this year not to “fence off” American, British or Norwegian defence companies and that doing this could “splinter” the transatlantic security bond.

I am not sure where and if this is going anywhere anytime soon but I doubt that it will go away. What we do know is that the EU is planning to expand its defence budget research and development spend budget from 2021, through the allocation of EUR 13 billion ($15 billion) spread over seven years. The current year budget for R&D is around EUR 600 million.

By failing to allow UK, US and other none EU member state companies to play a part in PESCO the Netherlands and the bulk of the 25 countries signed up fear that they would miss out on expertise and information that could improve defence and security overall.

By October it was being reported that a diplomatic tussle has broken over PESCO and that London and Washington were determined to ensure that their respective defence companies were able to be fully involved in what was being created. Since then, apart from the widely reported remarks made by French President, Emmanuel Macron last week and that appeared to further undermine the situation it appears to have gone quiet.

(Note: Last week Emmanuel Macron said in a recorded CNN interview talking of the perceived need for European countries to increase spending on defence “To be very direct with you, what I don’t want to see is European countries increasing the budget in defence in order to buy American and other arms or materials coming from your industry”)

Back in May this year Reuters reported that “a broad European military strategy involving Britain after Brexit has started to take shape with France at its centre although the report also noted that discussion had apparently taken place without a UK defence minister taking part in the discussion. The well informed Reuters report stated that “Despite an impasse over how to start formal negotiations with Britain on a new defence and security relationship, France is pushing a two-track approach that it had discussed at a weekend gathering of EU defence ministers (excluding Britain) in the Bulgarian capital Sofia on May 5.

The report highlighted also that “France supports a bigger role for Spain in EU military missions to fill the hole Britain will leave, while it will ‘offer’ London a place in a new French-led European intervention force to keep Britain close in military cooperation”. The arrogance of this is quite remarkable!

UK inclusion in any shape or form is not surprisingly a very sensitive subject in Paris but the importance of including Britain because of its involvement in projects such as the Galileo satellite programme which the EU as a whole has for some years been developing as a rival to the US. Global Positioning System is not an issue that France can easily ignore. Despite being one of the four who wish to set harsh conditions for UK future inclusion I note that Spain’s defence minister, Maria Dolores de Cospedal, has made it quite clear that despite rules that prohibit sharing sensitive information with non-EU states that “We must avoid a rupture (with Britain).” Sweden’s Peter Hultqvist expressed a similar view when he said that “It is important that Britain is involved in Europe’s future security cooperation.”

While the French may believe that they don’t need the UK and which I would remind that alongside Britain, are the two largest spending defence countries in Europe, the consensus view is that the EU cannot defend itself from Russian and militant threats without Britain being alongside. Those that consider Britain should not seek to be involved in future EU defence and security need also to remember that without continued access to EU intelligence and databases the UK is weakened and potentially more vulnerable.

Reported in the Reuters as having come from a senior EU official who apparently said that while a “future security agreement sounds logical, as nobody wants a dark space in European territory that militants could exploit, such logic does not make a deal any easier.”

Of course, France and some the EU member states have been angry for many years over Britain’s continued blocking EU defence cooperation, long standing fears over the French/German plan to create an EU army along with EU rules that currently restrict access for non-EU states to European Union bodies such as police agency Europol.

And the most recent update……..in another report from Reuters published yesterday the news agency said that “British plans for a swift inclusion in the European Union’s new flagship defence pact are being undermined by political turmoil in London and uncertainly over the terms of Britain’s exit from the bloc, EU diplomats have said. By means of an update here is the Reuters article published yesterday in full:

Prime Minister Theresa May called in February for a new security treaty with the EU from next year and the EU’s chief executive argued it was too important to risk getting subsumed in broader Brexit negotiations.

Five diplomats involved in security talks said the issues had now become interlinked, however, because of the level of scepticism voiced by many British politicians towards the draft EU withdrawal deal. “It’s too sensitive to talk about security now when everything is up in the air in London. The issue of Britain’s involvement post-Brexit was already divisive for some EU countries,” said a senior EU official.

Britain, which is seeking a “deep and special partnership” with the EU in defence and security, initially hoped to agree in November a deal to take part in the EU’s defence pact and access financing from a planned 13 billion euro (11.67 billion pounds) EU weapons, technology and research fund. That decision on Britain’s future participation as a third country has now been pushed to December at the earliest but is more likely next year, diplomats said.

Britain, along with France, is one of Europe’s biggest military powers and had hoped that security would be one of its biggest bargaining chips as it seeks a new relationship with the EU.

EU defence integration is gathering pace in the wake of Islamic attacks in Western Europe, alleged Russian meddling in European elections and concern about U.S. commitment to NATO under President Donald Trump. Britain’s closest EU allies, led by the Netherlands and the Baltics, are pressing for a deal to allow British industry into lucrative EU military projects and tap into EU funds.

But others, including France and Italy, want non-EU countries’ involvement to be on a highly selective basis. Cyprus is also concerned about any potential Turkish involvement if the EU’s pact “Permanent Structure Cooperation”, or PESCO, agreed in December 2017, is open to non-EU countries.

Paris and Rome want to see Britain committing to the EU’s foreign and security policy in a political declaration on their future ties that forms a package with the EU withdrawal treaty, according to an internal EU note seen by Reuters.

Pro-Brexit lawmakers in Britain fear London will be bound to the EU in perpetuity under the divorce terms and are sceptical about committing to the bloc’s security. Particularly in defence, Britain long blocked EU cooperation and argued military matters should remain a matter for national governments.

Disagreements over Britain’s future place in EU security arrangements are “not something that would break the deal but it shows how tricky it all is. We’ll make sure the UK won’t get decision-making powers in our processes,” one EU diplomat said.

CHW (London – 20th November 2018)

Howard Wheeldon FRAeS

Wheeldon Strategic Advisory Ltd,

M: +44 7710 779785

Skype: chwheeldon




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