Table of Contents Issue 5, 2024
Issue 5 October 2024
Editorial - The Draghi Report and EU Defence: A Call for Action
Common foreign and security policy; Competition policy; Defence policy; EU agencies; European
Union; Raw materials
A crisp, tightly argued analysis which is devoid of verbiage and leads to clear and apt policy recommendations is not what we have come to expect from European Union (EU) documents. In fact, in his report of 9 September 2024, entitled The Future of European Competitiveness, Mario Draghi gives us much more, including a sense of urgency that is articulated in unusually stark terms:
“[T]he foundations on which we built are now being shaken… If Europe cannot become more productive, we will be forced to choose. We will not be able to become, at once, a leader in new technologies, a beacon of climate responsibility and an independent player on the world stage. We will not be able to finance our social model. We will have to scale back some, if not all, of our ambitions. This is an existential challenge. Europe’s fundamental values are prosperity, equity, freedom, peace and democracy in a sustainable environment. The EU exists to ensure that Europeans can always benefit from these fundamental rights. If Europe can no longer provide them to its people – or has to trade off one against the other – it will have lost its reason for being”. 1
Given the widely shared uneasiness about the direction of the EU in a world of geopolitical instability, the Draghi Report was anticipated with great interest.2 Its recommendations are wide-ranging and focused on three areas of action: fostering innovation, especially in advanced technologies, decarbonisation and competitiveness, and increasing security and reducing dependencies.
While of broad scope, the Report is not unwieldy. Instead, it illustrates and draws on the fundamental interactions between the different policies that are central to the EU’s position in the world. Its approach to security is a case in point. On the one hand, the Draghi Report calls for a “genuine EU ‘foreign economic policy’”3 aiming to reduce external dependencies on critical raw materials and advanced technologies. On the other hand, it acknowledges the “insurance cost” that this process would create and proposes increased cooperation at EU level in order to address it.
It is in this context that the Report refers to defence. There is a deeply pragmatic approach to the chronic problems of the defence industries in Europe, including insufficient public spending, lack of focus on technological development, fragmentation compounded by insufficient aggregation and coordination of public spending. Its proposals include increasing defence capability, raising the share of joint procurement and common research and development spending, introducing an EU preference principle in defence procurement, greater access to public funding, and adjusting competition law to enable consolidation of defence industries.
The reception of the proposals set out in the Draghi Report will depend on a number of political, institutional, practical, and legal factors all of which are intertwined. For the purposes of this Editorial, suffice it to point out two specific aspects of the above. The first is about political acceptance. It is essential to progress in defence policy and, the problems of defence industries notwithstanding, is not to be taken for granted. For instance, the High Representative for Foreign Affairs and Security Policy, Josep Borrell, has argued that the Draghi Report “did not take the particularities of the military equipment market sufficiently into account” and pointed out that “[w]e will never be able to achieve a true single market for military equipment until we have a much stronger political union”.4
Second, while dynamic, the development of the Union’s institutional framework may give rise to considerable inter-institutional skirmishes. For instance, the Commission President, Ursula von der Leyer, has now created the first ever Commissioner responsible for defence and space and asked the commissioner designate, former Lithuanian Prime Minister Andrius Kubilius, to present, along with the new High Representative, a White Paper on the Future of European Defence in the first 100 days after the new Commission has been installed.5 While not finalised, this development illustrates not only the significance of defence for the EU but also the intention of the Commission to be more assertive in the area. However, other actors, including the Council and the European Defence Agency, will be sensitive to any initiative that may be viewed as extending the powers of the Commission at the expense of those of the Member States.
The tension between effectiveness at EU level and political sensitivity runs through the entire scope of the Draghi Report. In the context of economic security, the CEO of Dutch microchip corporation ASML, the most highly valued European tech company, has recently argued that economic security requires greater integration on foreign affairs, defence, and trade at EU level and stated that, “if that’s unrealistic, then stop talking about a European economic security policy”.6
Its reception by the Member States and the EU institutions notwithstanding, the Draghi Report has set out in stark terms problems that the EU can ill afford to ignore. It does not only highlight the role of defence for the development of the Union’s economic security policy but also focuses on policy initiatives that, in addition to European competitiveness, they would enhance the Common Security and Defence Policy. This aspect of the Draghi Report is to be welcome.