Military budgests of EU: It is cheeper together

Europe could save almost a third of what it spends on military equipment if governments clubbed together to coordinate investment and use fewer arms suppliers, according to an analysis by the consultancy McKinsey. “Up to 30 percent of annual European defense investment could potentially be saved through pooling of procurement,” said a report prepared for this year’s Munich Security Conference in mid-February.

In 2014, the 27 EU countries that belong to the European Defense Agency — all EU states except Denmark — invested about €35 billion on defense, both on equipment and on research and development, according to the most recent figures from the agency, released last year. The McKinsey report’s findings suggest that coordinating procurement efforts and reducing the number of suppliers could free up almost €11 billion for additional long-term investment, and potentially more if investment goes up during the next couple of years, as has been widely anticipated.

As a bloc, the EU is the world’s second-biggest spender on defense after the United States. However, partly because many countries traditionally favor domestic munitions manufacturers, about 80 percent of defense procurement in the EU is carried out on a national basis, which has in turn created a highly fragmented defense market across the Continent.

For example, troops across Europe use 17 different systems of battle tanks, compared to just a single system in the U.S., according to McKinsey. While U.S. troops operate with just two different types of howitzers, European soldiers use 27 different systems. At sea, European naval forces work with 29 different types of destroyers and frigates, compared to four in the U.S. All in all, 178 different weapons systems are in use in Europe, compared to 30 in the U.S., the McKinsey analysts concluded.

The push for greater military cooperation in Europe and increased defense spending by EU countries has picked up speed in response to President Donald Trump’s remarks about U.S. allies having to pay their fair share for protection. He has even called into question whether the U.S. would continue to automatically defend its NATO allies, which include 22 of the 28 EU members countries.

In late November, the EU unveiled its biggest defense plan in over a decade. At its core is a proposed investment fund for defense spending, with the bloc hoping to spend about €5 billion per year to help governments acquire military hardware at a lower cost, and another €500 million on research.

This was seen as a message to Trump that Europe is willing to pay for its own security, and a signal to the United Kingdom — a longtime opponent of closer defense cooperation on the European level — that the EU plans to take a more prominent role in defense.