Meeting with Timo Pesonen, Director-General for Defense Industry and Space, European Commission
Interview by Mélanie Bénard-crozat
A return of power competition in geopolitics
We are witnessing one of the darkest hours for European and global security with Russia’s unprovoked and unjustifiable invasion of Ukraine. In a very short timeframe, the EU took a series of historical decisions to sanction the Russian aggression and support the Ukrainian people.
But this is not only about EU countries supporting Ukrainian government and its armed forces. Within a few weeks, EU Member States hosted more than 3 million refugees escaping the conflict. We should be particularly proud of our societies and their resilience, at a time while we are trying to put the COVID-pandemic behind us.
So, is the EU and its societies resilient? Definitely yes, we’re proving this every day.
Do we see a return of power competition in geopolitics? Yes.
We are facing more than an acute crisis, a war. On our continent Europe. So quite obviously we have to step-up our collective ability to face unprecedented, even existential challenges with commensurate emergency measures.
In addition to helping stop the aggression and supporting Ukraine, the war calls upon us to rethink the world order, and the EU’s place within it. But also, and starting now, to strengthen our resilience in all respects.
We are heading through a more dangerous world. The war in Ukraine shows that even territorial defence and high intensity warfighting, which we thought belonged to a revolved past, are still a reality we need to confront.
This is now abundantly clear; the EU need to strengthen its strategic autonomy across the full spectrum. Both in the civil and military worlds. This requires a collective effort. It is only if we stick together that Member States, including the bigger ones, can better ensure the security of our citizens, territory and democratic way of life.
Global power is clearly shifting
For the last decades we have had four European economies among the eight largest in the world (Germany, France, Italy and United Kingdom). But by 2050, only Germany is set to remain. The economic power of a country and its influence on the world scene are obviously closely interlinked.
The world economy is shifting eastwards. In 2005, the size of the European economy was more than six times larger than China’s. Today, China has nearly caught up. The same trend is visible in defence spending.
Digital technologies are a defining feature of our world, and without a strong role in the digital economy, no country can succeed. This is particularly true for Chips for instance, an area of strong interest for Commission Breton who has advocated and shaped the European Chips Act.
Our critical dependencies make the EU vulnerable in international crisis. Therefore, we need to step up our efforts to build our resilience in newly contest domains, like cyber and space, but also in the traditional defence of our territory, and the nexus between them to protect ourselves against hybrid threats.
Hybrid threats are one of the most serious and sophisticated challenges the EU and its Member States are facing these days. We are witnessing new hybrid attacks combining elements such as electoral interference, cyber-attacks, military pressure, and suspicious foreign investments, almost daily. They attack our core values, weaken our societies, and try to disintegrate the proper functioning of our member states.
Addressing collectively the gaps
DG DEFIS was created on 1st of January 2020 to signal the increasing importance attached to defence industry and space. This followed the 2016 Commission’s European Defence Action Plan that announced the creation of a European Defence Fund. This Fund is now a reality and incentivises defence research and development cooperation between companies and research entities across the EU. This is achieved with the cooperation of Member States of course, which must agree through qualified majority voting rules on annual funding priorities and support to selected projects. In 2021 only, we invested more than 1 billion euro to support the competitiveness of our European defence industrial base and its capacity to innovate.
On February the 15th, the Commission has also announced a new Defence Package that aims to go further in supporting Member States and industry in their effort to cooperate more on defence. Despite a reduced investment in defence compared to its GDP (only 1.5%), the Union stands forthe second largest defence budget in the world. While, for instance, the Russian investment in defence compared to its GDP is higher, in absolute terms we spend approximately three times more in defence than Russia.
At the same time, the EU defence sector is affected by several historical problems. Let’s face it: we have collectively underinvested in defence for too many years. At the cost of innovation and certain important capabilities. We have Defence budgets that are heavily fragmented among Member States, since we do not have, and we won’t have for any foreseeable future, a common ‘army’, and defence integration with the EU is a recent process.
The main message of the new defence package is that we need to go beyond what we’ve been doing so far with the European Defence Fund. We need to incentivize joint ownership and procurement of defence capabilities developed within the EU. We need also to boost innovation and synergies between civil and military: spin-ins and spin-offs.
We need to reinforce cooperation on critical technologies or value chains vital to us, reduce related strategic dependencies and enhance defence innovation. Again, major players are fully engaged into a competition centred on technologies. The Defence Package announces a series of measures and incentives to support this transition to making EU defence cooperation the norm. The defence package should also be seen as the Commission’s contribution to the Strategic Compass that was endorsed bythe Council in March, and which sets out where EU Member States want to go collectively in security and defence.
Our Heads of State and Government took stock of the dramatic situation we are living through by issuing the Declaration of Versailles, a real call to action. They showed the sense of direction. We need to be more resilient, to invest more in defence, in energy self-sufficiency, in leading edge technologies.
Our Heads of State and Government have also been very clear in Versailles – there is an absolute need to bolster our defence capabilities. In this regard the Commission, in cooperation with the European Defence Agency, has been tasked to come with an investment gap analysis and with proposals to strengthen the EU defence industry by Mid-May.
My services are fully mobilized to support Member States in assessing the specific needs and possible solutions to help Member States addressing defence investment their gaps collectively.