What’s the European Defence Fund?

A paper about the EU’s willingness to increase military spending and encourage the arms sector.

Teresa de Fortuny and Xavier Bohigas, Centre Delàs of Peace studies.

This working paper analyses the European Defence Fund, a financing tool which will lead to a significant increase in military spending of EU member states and that will boost the military and security industries, by allocating

public funds which should instead be directed to human and environmental needs.

Download the full document here.

Abstract:

The European Commission announced in 2016 the EU’s intention to implement a Fund to finance the research and development of military products and technology. The Fund will be endowed with 13 billion euros from the Union’s budgets for the period of 2021-2027. It is also foreseen that, in the development projects, the Member States will commit to contribute 80% of the costs. It is estimated that the sum of the resources coming from the Community budget and the resources coming from the state budgets of the Member States, will exceed 50 billion euros. The European defence and security industry and military research centers will be the ones who will carry out this investigation and benefit from grants from the Fund. It will be the first time that the EU will allocate resources to strictly military research. The European defence industry played a crucial role in the decision to implement this Fund. In 2015, the European Commission created a Group of Personalities with the mission of advising on military research, with an important representation of that sector. The Fund’s proposal came from that Group of Personalities. It is an analogous process to the one that, in the past decade, led to European programs of security research funding. Once the research and development projects are completed, the defence industry will own the resulting products and technology and will profit from their sale.

The implementation of the Fund will lead to a substantial increase in military spending in Europe. On one hand, the EU will provide resources from the community budget. On the other hand, the Member States will co-finance the development projects and also commit to buy the resulting products.