Brussels, 15 November 2022. Today, Defence Ministers were presented with the results and recommendations of the Coordinated Annual Review on Defence (CARD), the EU defence review. It finds that increases in defence spending following Russia’s war of aggression against Ukraine represent both an opportunity and challenge for European defence. Today’s CARD Report also shows that the announced additional funds may fill long-standing capability gaps. CARD has identified a likely recovery point in 2023, when Member States can move past the underinvestment in defence following the 2008 financial crisis. However, spending in isolation and leaning towards non-EU suppliers risk increasing fragmentation and undermine broader efforts to deliver capable and coherent European armed forces. It also finds that defence planning continues to be done mostly in isolation and that Member States remain unconvinced by European cooperation projects.
Today, during the European Defence Agency (EDA) Steering Board, Ministers of Defence were presented with the 2022 CARD Report developed in close coordination with the European External Action Service (EEAS) and the EU Military Staff (EUMS) over the past year.
Head of the Agency, High Representative/Vice-President, Josep Borrell said: “The message from CARD is clear. We cannot just spend our way out of the mistakes made following the financial crisis. Defence cooperation coupled with increased spending is the only way to ensure Europe has capable and ready armed forces, able to respond to any crisis. With CARD, we have a unique overview of all 26 EDA Member States’ national defence planning and capability development efforts. Member States now know where and with whom they can invest and develop military capabilities together. We must move past recovery and, with war back in Europe, move towards winning the future by building a true European defence.”
SPENDING, PLANNING, COOPERATING: CARD’s RECOMMENDATIONS
The CARD report offers Ministers of Defence key strategic and political messages, actionable recommendations and options to generate collaborative projects.
- Repairing the past through increased defence expenditure: CARD recommends that the increase in defence spending is used to meet urgent defence needs and close identified capability gaps.
- Prepare today by planning for 2040: CARD recommends that, in accordance with the Strategic Compass’ vision, Member States elaborate a common long-term capability outlook for the EU defence landscape – envisaging how it shall be shaped by 2040 – with greater support for adopting an EU approach for cooperative capability planning.
- Win the future with a capable and coherent European defence: CARD recommends taking forward CARD collaborative opportunities through projects in PESCO, the European Defence Fund or other frameworks. It also proposes concrete projects, e.g. for cyber operations or interoperable tactical command and information systems, and expresses the need to cover critical gaps including enablers, such as strategic air transport, maritime power projection and high-end air defence systems.
EDA Chief Executive, Jiří Šedivý said: “Without having a robust portfolio of high-end military capabilities for a wide spectrum of operations – including high intensity – the EU will not become a credible security provider. CARD has a crucial role to play by informing national policy makers, planners, and armament staff of concrete collaborative opportunities to that end. At EU level we must now work to shift the balance and make cooperation the norm. The progress on cooperation projects since our 2020 report has been limited, renewed cooperation on next-generation capabilities is essential to meet future needs.”
DEFENCE SPENDING: RECOVERY POINT FROM 2023
Defence expenditure grew significantly to €214 billion in 2021 (up 6% compared to 2020) and is estimated to grow further by up to €70 billion by 2025. CARD finds that if announced defence spending increases are followed through, Member States will possibly have recovered in 2023 from the underspend of the financial crisis and can give greater focus to future defence needs.
CARD identifies a clear risk from isolated defence spending in the medium to long term. This risk seems further substantiated if Member States favour individual, non-EU off-the-shelf procurements over longer-term investments.
DEFENCE Cooperation: exception rather than the norm
The report finds that defence cooperation remains the exception rather than the norm. CARD finds that Member States implement their plans to a large extent at national level, with only 18% of all investment in defence programmes conducted in cooperation with other EU countries. However, some collaborative opportunities identified in the 2020 CARD cycle have led to PESCO projects. CARD concludes that Member States mainly seek cooperative solutions for projects when they coincide with national plans, benefit national industry, or consolidate a strategic partnership.
Many Member States regard European collaborative approaches as more time consuming and complex, and often opt for national solutions or non-EU suppliers. Cooperation primarily takes place among neighbouring states in existing cooperation frameworks, while broader European collaborative approaches are usually not the preferred choice. CARD finds that the main impediments to cooperation stem from the complexity of legislation, pressing timelines and budget availability as well as the allocation and retention of the right experts, making full engagement with the EU defence initiatives difficult for many Member States.
DEFENCE PLANNING: LACK OF FOCUS
To overcome the lack of coherence in the EU defence landscape, CARD finds the need for a common long-term capability outlook, built upon the common strategic vision provided by the Strategic Compass. EU defence initiatives must be further embedded into national defence planning and policy documents. Based on the most promising of the identified collaborative opportunities, six ‘focus areas’ were selected for their high potential to boost the EU’s and its Member States’ operational performance. The six areas should be further developed to better reflect high intensity requirements and preserve industrial know-how.