Deeper, not wider.

Reversing the political motto prevalent in Britain’s European mindset since John Major, France, Germany, and Italy are spearheading the European Defense Union.

European Defense Union

The European Defense Union initiative is the boldest political initiative that came out of the trilateral – Italy, France, Germany – meeting in August 22, on an Italian aircraft carrier. On a policy level, the discussion was picked up again in Paris on September 5, in a meeting between defense ministers. The pace of policy development is fast.

On Thursday, the German Defense Minister Ursual Von der Leyen said “it’s time to move forward to a European Defense Union, which is basically a ‘Schengen of defense’,” Reuters reported. She went on to add “this is what the Americans expect us to do.”

The term “Schengen of defense” is in fact coined in Italy. Italy’s Defense Minister Roberta Pinotti and Foreign Minister Paolo Gentiloni published an article in the French daily Le Monde in August proposing a “Schengen for Defense.”

Apparently, the ambition is for the EU to reach a level of collective security that will allow its members to treat Article 42(7) of the TEU as equivalent to NATO’s Article V guarantee, meaning an attack on one is an attack to all. France was the first to evoke Article 42 (7) following the November 14, 2015 attack in Paris.

The vision is expected to be more widely discussed on the forthcoming meeting of EU leaders in Bratislava, Slovakia, on Sept. 16.

The Question of NATO

A significant political consensus between France, Germany, and Italy was reached in Paris not only for an EU capability but also for EU military headquarters distinct from NATO’s, a subject that has been contentious in Brussels.

Politically, the initiative appears to be framed with consensus and molded in significant detail.

The head of the European External Action Service Frederica Mogherini told EU ambassadors she is taking initiatives to promote joint military capabilities. Speaking to The Times earlier this week, Mogherini suggested the EU could participate in NATO missions with a single force.

Politically, the initiative was catalyzed by the June 23rd Brexit vote.

“Their exit frees up a lot of energy because they blocked everything,” an Italian defense source told Defense News. NATO and the EU have largely overlapping memberships.

Whether in time there will be political friction between the Euro-Atlantic and the European defense project too early to tell. However, it appears that because Hillary Clinton drove the pivot to the Pacific policy and Trump threatens with isolationism, tradition Eurosceptic leaders in Eastern Europe have quickly embraced strengthened European defense cooperation.

Budget deficit

Italy is backing France in promoting the idea of exempting defense spending from national budget deficit calculations. This should allow bolstering defense spending beyond current levels. In 2015, only five of 28 EU member states met the NATO requirement for 2% of GDP defense expenditure. In view of a self-sufficient EU capability, expenditure levels would need to step up rapidly.

France was granted in 2015 a two year grace period to bring its budget deficit back in line with the 3% requirement. The grace period was also justified by the security circumstances following the November 2015 Paris attacks.

The understanding in Paris is that there is currently no political consensus on such an exemption. However, France yields considerable leverage as the only global military power in the EU after Brexit.

Growth engine

Italy is lobbying for the development of financial instruments to allow the fast-pace development of the European Defense Union, Defense News reported on Thursday.

Italy is providing leadership in the EDU by spearheading proposals that will allow public investment in defense. A leaked Italian government proposal suggests a cluster of fiscal and financial incentive to promote joint European military procurement and the development of common infrastructure.

The issue at hand is that although Europe spends on defense half of what the US does, the effectiveness of this expenditure is near 10%. National armies duplicate capability and there are few if any synergies in investment and infrastructure.

Italy is now proposing giving European defense ministries and private firms access to financing from the EU Investment Bank and the EU Fund for Strategic Investments. Rome also proposes a tailor made EU investment program and scrapping sales tax on military procurement.

The level of detail suggests the European Defense Union is more than a vision. Europe gets a second chance in a French initiative abandoned in 1954, by France. At the time, the idea was to prevent the resurgence of a German Army by Europeanizing its capability. That consideration may not be completely alien to current political calculations.

(Reuters, The Time, Defense Matters)