1. EU Defense – Highlights & Main Talking Points
By Gabriele Masetti, June 28, 2016
1. Background
The issue of defense burden sharing between Europe and the United States (U.S.) has been part of
transatlantic relationship since the early days of the North Atlantic Treaty Organization (NATO).
In 2014 budget goals were agreed upon requiring each NATO member state to spend at least two
percent of their GDP on defense and at least twenty percent of total defense expenditure on
ResearchandDevelopment (R&D) programs.1
In 2015, however, only five of the twenty-eight NATO
member states meet the criteria.2
While there is no doubt that most European countries spend a significantly lower share of their
national budgetsondefense than the U.S., narrowly focusing on the quantities of national treasury
pledgedtodefensemightfail tocapture other important elements of the European defense sector.
Whencomparingraw dollaramountsdedicatedtodefense,discrepanciesare highly evident; in 2015
the twentyeightmembersof the European Unioncollectively spent203.143 billion euroondefense3
- approximately $ 224.118 billion - against the $ 596 billion spent by the U.S.4
In absolute terms,
therefore, European countries collectively spent slightly less than half the U.S. Even though the
notionthat Europe should shoulder a more equal share of the defense burden with the U.S. within
NATOis a validone,discussionsaroundthe issue generally fail toaddressanotherstrikingelementof
European defense spending. Notwithstanding defense allocations, European defense outputs – in
terms of spectrum, quantity and quality of assets and capabilities – fall short. If European partners
were operating with the same level of efficiency and capability, then their militaries collectively
would be able to field and sustain roughly fifty percent of what the U.S. Since this is not the case, it
raisesfundamental concernsaboutthe structure andviabilityof the Europeandefense system that a
simple infusionof additionalfundsmightnotbe able toeliminate.Therefore,it is important to delve
further into the issue and highlight the reasons and root causes of this essential disparity on both
sides of the Atlantic. Doing so might add an important element to the discussion on “how much is
enough” in terms of European defense spending. Two elements stand out: (1) the issue of system
defense industrial base efficiency and economies of scale; and (2) the harmonization and
interoperability of the different national services.
1 North Atlantic Treaty Organization, Wales Summit, November 4-5, 2015.
2 Estonia, Greece, Poland, the UnitedStates andthe United Kingdom. See DanielKochis and Luke Coffey, NATO Summit 2016:
Alliance Members Must Commit to Increased Defense Spending, The Heritage Foundation, June 15, 2016 at
http://www.heritage.org/research/reports/2016/06/nato-summit-2016-alliance-members-must-commit-to-increased-defense-
spending.
3 Zoe Stanley-LockmanandKatharina Wolf, European defence spending 2015: The force Awakens, the European Union Institute
for SecurityStudies, BriefIssue 10, March 2016, quotingthe International Institute for Strategic Studies’ 2016 MilitaryBalance.
4 StockholmInternationalPeace ResearchInstitute, MilitaryExpenditures Database, at https://www.sipri.org/databases/milex,
and https://www.sipri.org/sites/default/files/SIPRI-Milex-data-1988-2015.xlsx.

2. It mightverywell be thata more thoroughunderstandingof structural inefficienciesof the European
defense architecture - and devising a strategy to remedy them – will remove one of the main road
blocks on the path for a fairer and more efficient use of defense allocations in the Old Continent.
2. An Inefficient System: What are European Capabilities?
NATO European members’ armed forces collectively field over two million personnel. This data
highlights that– inorderto achieve amore equitablerealityinthe sphere of burden-sharingwiththe
U.S.5
- the size of the defense establishment in the Old Continent is not necessarily part of the
problem. Nowthatithas beenestablishedthatquantity doesnot appear to be an issue, the analysis
can be safelysteeredonthe subjectof quality.Of the total NATOEuropeanarmedforces,ithas been
estimated that only about 100,000 –about 5 percent - can be deployed and sustained abroad.6
This
statistic attests the fundamental lack of strategic mobility and expeditionary assets. If that wasn’t
enough, other statistics suggest that, as the result of the recent financial crisis, European military
capabilities decreased of about 20 percent in 2008-2014.7
The drop in R&D was even sharper,
estimated ataboutthirty percentin2006-2013.8
To be fair,focusingsolelyon issues of quantity fails
to address the equally important element of quality.
3. The Hard Truth
The hard truth about European defense is that –even if individual member states that are lagging
behind in the implementation of the 2 percent GDP/20 percent R&D were to radically change their
trajectories and investing more on defense – a mere injection of additional resources into an
inefficient system would only marginally improve the final capability output.
It took two suicidal conflicts in the 20th
century and half a century of slow but incremental strategic
irrelevance during the Cold War for European powers to realize that no individual country still
operatingwithinthe Westphalianframework can afford to single handedly maintain a full spectrum
of defense industrial base plus the corresponding military capabilities.9
Since the early 2000s NATO has sought to provide the structure for improved harmonization and
standardization of defense effortsamongEuropeanstatesandbetweenthemandthe U.S. Important
steps forward have been achieved in the last fifteen years, but not enough to permanently tip
balance in favor of continued, structured, joint research, development, acquisition, training and
5 According to the Defense Manpower Data Center, as of April 30, 2016 the total strengthof the U.S. armedforces is 1,341,441.
See https://www.dmdc.osd.mil/appj/dwp/dwp_reports.jsp.
6 Nick Witney, Re-energising Europe’s SecurityandDefence Policy, EuropeanCouncil onForeign Rel ations, July 2008, p.20 at
http://www.ecfr.eu/publications/summary/re_energising_europes_security_and_defence_policy.
7 Jan Joel Andersson, Sven Biscop. Bastian Giegerich, Chrisitan Molling, Envisioning European defence: Five futures, Chaillot
paper n. 137, March 2016, the EU Institute for Security Studies, p. 11.
8 European Defence Agency, Defence data 2013, p.3 at http://www.eda.europa.eu/info-hub/defence-data-portal.
9 EU Institute of International Studies, Report of the Group ofPersonalities on the Preparatory Action for the CSDP-related
research, European Defence Research: The case for an EU-funded defence R&T programme, catalysing cooperation, enabling
capabilities, sustaining competitiviness, February 2016.

3. deployment to a degree that would significantly improve the combat effectiveness of European
militaries.
Much has also been done at the EU level, with the establishment of the European Defence Agency
(EDA) in200410
and withthe promotionof a defense industrialpolicybythe EuropeanCommissionin
2013-2015.11
Eventhoughprogress has beenmade,shortcomingscontinue.Jointprogramsaswell as bilateral and
multilateral assets sharing and pooling agreements are few and far between, remain critically
underfunded and continue to be given low priority.
4. Conclusion
It is perfectly arguable that Europeans ought to play a protagonist role in protecting their own
domesticterritoriesandtheir interests abroad. It is also perfectly arguable that, in order to do that,
increased emphasis on the quality and capabilities of European armed forces must be given.
Yet,while itiscertainly true that Europeans should spend more on their defense budgets, R&D and
further restructure their defense industrial base, the discussion ought to shift from the quantity of
the funds employed and toward the efficiency and quality of the military capabilities.
This short essay was written with the purpose of spurring a sounder debate over the merit of
Europeanmilitarycapabilities;a debate that is elevated beyond conversations that focus strictly on
the size of European military budgets in comparison to the U.S.
10 See the EuropeanDefence Agency’s website at http://www.eda.europa.eu/Aboutus/our-history/the-birth-of-an-agency.
11 The EuropeanDefence Industrial Policyat http://ec.europa.eu/growth/sectors/defence/industrial -policy/index_en.htm.