Borrell: EU falling behind on military innovation

The EU must boost its next-generation military budget or risk falling further behind other major powers, the bloc’s top diplomat warned on Tuesday.

“Either we invest a lot on defense innovation, or we will become defense irrelevant,” Josep Borrell said, speaking at an annual defense conference.

Borrell pointed to recently released military spending data, noting the U.S. invests seven times more than the EU collectively on researching and developing new technologies.

“Comparing the European Union and its member states with other global actors, we see that we lag far behind in terms of investing in defense innovation. And this gap is widening,” he said at the conference, held by the European Defence Agency (EDA), the EU body tasked with coordinating military cooperation and development.

Borrell’s comments come against the backdrop of a new EU document in the works that aims to set out a more muscular military strategy. Last month, Borrell presented a first draft of the document, dubbed the “Security Compass,” just as EU members fretted over a nearby Russian troop build-up and a Chinese nuclear-capable missile test.

The document includes a proposal for a rapid-deployment force of up to 5,000 troops the EU could send to conflict zones starting in 2025. EU leaders will discuss the proposal at a meeting next week. The new strategy is expected to be adopted in March during the French presidency of the Council of the EU.

According to the latest EDA data, EU members spent a record €198 billion on defense in 2020, despite the pandemic. Yet of that amount, only €2.5 billion was spent on research and new technology. As Borrell noted, that’s just over 1 percent of the total, “with a tendency to further decrease in the next two years.”

He recalled that member states committed to boosting that figure to 2 percent as the EU looks to advance its military cooperation project, dubbed Permanent Structured Cooperation, or PESCO.

“We have the commitment of reaching a certain level,” he said, “and we are [at] half of it and not going up.” The U.S., he pointed out, spends around 2 percent of its defense budget on research and development.

EU leaders have not always been receptive to such pleas, with diplomats noting many leaders risk losing elections after boosting military spending.

Part of the problem is also in the private sector, said Jan Pie, head of the  AeroSpace and  Defence  Industries Association of Europe, a defense industry lobbying group, who was speaking at the same conference. According to Pie, many banks and funds are increasingly reluctant to give money to defense companies, wary of upcoming EU criteria on sustainable finance.

“Major banks in European member states,” Pie said, had been “canceling long-term client agreements.” He argued the European Commission must intervene and say the defense sector is not like tobacco or alcohol and is a sustainable activity.

“What we need is the Commission to stand up and say that dealing with the defense sector is not socially harmful,” he said.



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