The European Commission’s new role in EU security and defence cooperation: the case of the European Defence Fund

ABSTRACT

European Defence is in a new and formative phase in which the European Union’s long list of defence acronyms has steadily grown. One of the most noticeable new policy initiatives is the European Commission’s European Defence Fund (EDF). This article consequently investigates and outlines the establishment of the European Defence Fund and the European Commission’s new role within the field of security and defence through the lens of revised neofunctionalism. This article thus asks how and through what steps did the EDF come about; and secondly how can neofunctionalism explain the dynamics involved in the establishment of the European Defence Fund. The analysis uses a process-tracing method and draws on interviews with relevant policymakers and officials in Brussels as well as official EU documents. The conclusions argue that the ever-increasing involvement of the European Commission in a policy field close to national sovereignty is starting to blur the traditional dichotomy between intergovernmental and supranational decision-making. In this way, this study contributes to the growing literature on the weakening of intergovernmentalism within the EU security and defence policy field.

KEYWORDS:

• European Commission
• European Defence Fund
• neofunctionalism
• spillover effects
• European Defence

Introduction

Following the publication of the European Union (EU) Global Strategy in 2016, the EU has rolled out a number of new initiatives in the field of security and defence, including the Coordinated Annual Review on Defence (CARD), Permanent Structured Cooperation (PESCO), Military Planning and Conduct Capability (MPCC), a Military Mobility project and the European Defence Fund (EDF) (Béraud-Sudreau and Pannier 2021, Besch 2020). Most of these are intergovernmental initiatives; however, both the Military Mobility project and the EDF have enhanced and transformed the role of the European Commission in the area of European security and defence cooperation. Moreover, when the new Commission took office in 2019, a new Directorate-General for the Defence Industry and Space (DG DEFIS) was created in order to – among other tasks – implement the EDF and the Action Plan on Military Mobility (European Commission 2019a).

Since the publication of the EU Global Strategy and the “relaunch of the EU CSDP” (Howorth 2019), studies have been published on EU-NATO relations (e.g. Howorth 2018), the EU Global Strategy (e.g. Tocci 2017), the Franco-German push for European cooperation in defence (e.g. Béraud-Sudreau and Pannier 2021), small states and EU defence cooperation (e.g. Weiss 2020) and EU institutional development (e.g. Reykers 2019). Another strand of research has focused on new European defence cooperation outside of formal formats such as NATO and the EU (e.g. Billon-Galland and Quencez 2018). With a few exceptions (e.g. Ridderwold 2016, Karampekios et al. 2018, Bergmann 2019, Haroche 2020), however, there has been a general lack of an examination of the new and enhanced role of supranational institutions in the policy field of security and defence. This study consequently aims to deepen the understanding of the Commission’s new and enhanced role in European security and defence cooperation by attempting to answer the following two key questions: (1) Through what steps did the EDF come about; and (2) how can neofunctionalism explain the dynamics involved in the establishment of the European Defence Fund.

While neofunctionalism is arguably one of the most criticised theories in the European integration literature, it has continued to be relevant and is still widely discussed in the academic debate (Niemann 2016, Hooghe and Marks 2019, Nicoli 2020). The perspective that the political role of the Commission is in decline (e.g. Bickerton et al. 2015) has also been challenged by scholars who argue that the Commission has actually increased its political role in some policy areas (Becker et al. 2016, Peterson 2017, Nugent and Rhinard 2019). In addition, following Jean-Claude Juncker’s “political Commission”, the new Commission, according to President von der Leyen, is focused on becoming a geopolitical one. Her political guidelines also underline the ambition to take “bold steps in the next five years towards a genuine European Defence Union” (von der Leyen 2019).

The contribution of this article is mainly twofold. Drawing on elite interviews with officials and policymakers in the European Commission, the European External Action Service (EEAS), the EU member states, the European Defence Agency (EDA), the European Parliament and European defence industries this article has empirically traced the crucial steps in the development process of the European Defence Fund. By doing so, the article shed light on the increasingly supranational security and defence policy field in the EU. From a theoretical perspective it makes a contribution to the discussions on neofunctionalism and European security and defence policy. It moreover outlines the importance of external events in the policy process as well as gives the member states a larger decision-making role in the theoretical framework.

This article is structured as follows. The first section deals with the theoretical approach of revised neofunctionalism, and the second section presents the method and the material that the case study will build upon. The third section presents and analyses the crucial steps involved in the development of the EDF. The last section discusses the results of the case study and reflects upon the theoretical and empirical implications; it also suggests some further research.

Theory: revised neofunctionalism

This article uses the framework of revised neofunctionalism to explain integration within EU security and defence cooperation. In neofunctionalism, integration dynamics have traditionally been described using the notion of “spillovers”, especially in terms of functional, political and cultivated spillovers (Tranholm-Mikkelsen 1991). In addition to these three forms of spillover, this article discusses countervailing forces and exogenous spillover. In other words, neofunctionalism is viewed herein as a partial but far-reaching theory in which integration is no longer seen as an automatic process (Niemann 2016, p. 137).

Functional spillover is characterised as “a situation in which the original goal can be assured only by taking further actions, which in turn create a further condition and need for more action, and so forth” (Lindberg 1963, p. 10). Due to functional spillover, the interdependence between different sectors and policy fields can cause further integration pressures (Haas 1958). Thus, integration in one area can create tensions in another, such that functional spillover can be both intended and unintended. To examine this spillover effect, it is necessary to assess how important and urgent the original integration goal is. This will affect and determine the strength of the functional pressure (Bergmann 2019). In order to assess these dynamics, the case study presented herein focuses on the connections between already launched policy initiatives and the establishment of the EDF.

Political spillover occurs when national elites encounter problems that cannot be substantially addressed at the national level. According to Haas (1958), political spillover should lead to a process in which (non-governmental) national elites switch their expectations – and even loyalties – to the European level, thereby promoting integration at that level. These non-governmental elites would thus, in Niemann’s words, “become carriers of functional spillover” (Niemann 2006, p. 35). Lindberg (1963) focused on governmental elites instead, and on how a process of socialisation among them might foster consensus and, eventually, more integrative results. This process would further promote socialisation and the development of trust, thereby encouraging cooperation and consensus formation, which should, in turn, lead to more integrative outcomes (Niemann 2006, pp. 37–39). This article foremost addresses the involvement of European defence industries (the non-governmental national elites) in the EDF’s development process. However, it also discusses the dynamics of the member states in regard to the Commission’s EDF proposal and in the legislative negotiations.

The cultivated spillover effect emphasises how supranational institutions can become agents of integration with the salient goal of empowering themselves. The Commission and other supranational institutions, such as the European Parliament, can therefore foster integration by acting as policy entrepreneurs, such as by acting on functional interdependencies, framing issues as cross-sectoral (community framing) or acting as a strategic coalition builder (Niemann 2006, Bergmann 2019). Furthermore, the Commission is able to extend its power because of its authority (e.g. its initiative powers) and its central position in the EU’s political system (Niemann 2006). In the context of the EDF, this study will focus on the Commission’s (agenda-setting) role in developing and launching the proposal, and on its interaction with other key stakeholders including the industry, European Parliament and member states. This study also examines the role of the European Parliament and the different instruments and initiatives used by both the parliament and the Commission to expand their competences within the policy field.

The inclusion of exogenous spillover effects expands the integration process to account for factors that occur outside of the process itself. Although these factors can be obstacles to integration, they more often serve as an engine for more integration and thus affect the overall demand conditions for integration (c.f. also Biermann et al. 2019, Nicoli 2020). Exogenous events are often perceived as shocks or threats that can create incentives for regional integration. The logic behind this reasoning is that member states tend to find common solutions when threats or crises occur, since “regional integration is often viewed as a more effective buffer against disadvantageous or uncertain external development” (Niemann 2006, p. 33). In the end, the indicators of this spillover effect will be based on how decision-makers perceive the pressure for further integration due to different threats, shocks or international competition (Niemann 2006, pp. 62–63). Thus, in order to examine this effect, it is necessary to examine how external events affected the process of developing the EDF, both in regard to how the member states viewed and were affected by external events, and how the Commission (and parliament) viewed and acted upon these events.

To further analyse the EDF process, the notion of countervailing forces should be added to the discussion. These forces can be seen either when integration is being opposed or when the integration process reaches a standstill. In this article two different types of countervailing forces can be discussed: sovereignty-consciousness and domestic constraints. Sovereignty-consciousness countervailing forces arise when member states oppose the delegation of powers and sovereignty to, for example, supranational institutions. This opposition tends to be connected to member states’ traditions and identities. Domestic constraints, in turn, reduce the ability of member states to act at the European level, due to the effects of other political actors in the domestic political system (i.e. opposition parties, lobbying, public opinion) or to a state’s structural limitations (e.g. its economy) (Niemann 2006, pp. 47–49). This paper focuses on political, economic and military interest from the member states in order to examine whether and why the EDF proposal was met by resistance. The article in that sense argues that national governments play a larger role in regard to the theoretical framework (see also Nicoli 2020, pp. 900–901).

Case study: the European Defence Fund

This case study follows the logic of process-tracing and therefore seeks to trace and unpack the process of developing the new EDF. The analysis in this case study follows the theory-testing process-tracing method (Beach and Pedersen 2019).

The data used for this case study is primarily based on 23 semi-structured elite interviews that were conducted in person with officials and diplomats from the European Commission, the European External Action Service (EEAS), the EU member states, the European Defence Agency (EDA), the European Parliament and European defence industries between December 2019 and February 2020. Official documents, secondary literature, media reports and think-tank reports were also used in the analysis. It is important to note that the policy field of security and defence cooperation can be “less transparent than other policy areas due to its intimate connection to national security”. This factor makes interviews, media reporting and think-tank papers essential for collecting empirical material (Calcara 2019, p. 576). The triangulation of this data in the study helped to verify the information that was obtained and reduced reliance on a single form of data (Bennett and Checkel 2015, p. 28).

Long-term ambition

After the failed attempt to create a supranational European Defence Community (EDC) in the 1950s, the EU avoided integration within the security and defence policy field for a long time. However, over time, the EU has increased its capabilities and competencies in relation to these policies. Nevertheless, the Commission has held a weak position in the field of defence and security, which has been linked to member states’ reluctance to empower a supranational institution in a policy field so crucial to national sovereignty and high politics (Menon 2013). Nonetheless, Mawdsley (2018) has shown that the Commission’s discussions and ambitions within this policy field date back to the 1960s and 1980s, and that the pathway of today’s defence initiatives closely follows the earlier arguments and work of the Commission.

In particular, since the late 1990s, the Commission has tried more actively and in various ways to establish itself as an actor in the area of security and defence. In 1990, the Commission unsuccessfully argued that article 223 EEC (formerly article 296 TEC and now Article 346 TFEU), which states that “any member state may take such measures as it considers necessary for the protection of the essential interests of its security which are connected with the production of or trade in arms, munitions and war material”, should be scrapped (Strikwerda 2019, p. 52).

In 1996 and 1997, the Commission argued through its defence communications that member states should use community instruments and the Commission’s DGs to develop their defence industries (Fiott 2015, Strikwerda 2019). The 1996 Defence Communication even emphasised that “the Commission should consider its possible contribution to establishing [an] agency and to defining its tasks and carrying out its activities” (European Commission 1996, p. 1). The member states, however, were sceptical about the idea of the Commission and supranational decision-making entering the field, and instead opted for an intergovernmental agency to deal with defence industrial development. Furthermore, at that time, there were strong internal divisions between departments within the Commission on the role of security and defence research and a more “militarised” Commission (Mörth 2000). Therefore, the Commission supported the establishment of an intergovernmental EU defence agency, as it feared that member states might further detach defence industrial activities from the EU if the Commission continued to push for a supranational agency. Thus, the intergovernmental EDA was established in 2004, and the member states safeguarded their position towards the Commission. Following the adoption of the Lisbon Treaty in 2009, the member states also gave the EDA the exclusive task of supporting joint development and defence research (Fiott 2015, pp. 449–450).

In 2004, however, the Commission issued a Communication on Security Research, established a Group of Personalities on Security Research (GoP) and ultimately launched a Preparatory Action (PA) on Security Research. These activities prepared the ground for a civilian European Security Research Programme (ESRP) to be established in 2007 (Mauro and Thoma, 2016, p. 24). This was a crucial step, as it implied that the Commission could invest in dual-use technology. At that point, there began to be a blurring of boundaries between the civilian and the military side at the EU level (Martins and Ahmad 2020). Consequently, it has been argued the ESRP “paved the way for the Commission’s recent explicit engagement with direct defence research funding” (Martins and Küsters 2019, p. 294). In relation to the process from the civilian European Security Research Programme to the EDF, a member state official argued that it was clear that the Commission had been

… a very long-term player, and that they had had their eyes on the defence policy field for quite some time. The Commission started with the civilian security research programme and the next step was then a defence research programme that did not need to be negotiated with the member states and parliament, and then the Commission had expertise in this policy field. (Interview, member state official, February 2020)

The official then went on to explain that the EDF “was, of course, a pretty bold proposal, but since they had prepared the ground with several initiatives before, they did not encounter too much resistance”. Thus, the role of the civilian research programme must be recognised in this process, as it created new competences for the Commission and strengthened the Commission’s connections to European defence industries – something that was important towards the EDF, as will be discussed later.

Moreover, by 2009, the Commission had launched a new defence package with the aim of regulating the European defence procurement market (Fiott 2017). Through its 2009 defence package, the Commission used the threat of the ECJ and “court-driven integration” – as well as a strategy of framing the package as representing the middle ground between the member states and the Commission – to have Directive 2009/81/EC agreed upon, as the first supranational legal act in the area of defence procurement in the EU (Blauberger and Weiss 2013, pp. 1129–1131, Weiss 2013). Although other researchers have focused on the influence of the member states in this process (e.g. Hoeffler 2012, Strikwerda 2019), this article puts a strong emphasis on the Commission’s role in this phase. Thus, the defence package and its objectives were an important argumentation from the Commission to legitimise its new role with the EDF, as will be shown in this article.

Following the 2009 defence package, Michel Barnier, who was then the Commissioner for the Internal Market, established a Defence Task Force in 2011 to improve the Commission’s coordination of defence-related issues – which notably included the implementation of Directive 2009/81/EC and Directive 2009/43/EC – and to engage in the debate on the future of European defence (Fiott 2015). The Defence Task Force issued the Commission’s 2013 Defence Communication ahead of the December 2013 European Council, which was entirely devoted to the issue of defence for the first time. The communication suggested the launch of “a Preparatory Action for [Common Security and Defence Policy] CSDP-related research” (European Commission 2013, pp. 4–5). Officials consequently emphasised how the Commission, following the ECJ rulings in the early 2000s, was able to “push itself” into the defence market with the 2009 defence directives. Thus, the big impact of the 2009 defence package was that it broke the “taboo” regarding the Commission and defence-related issues, which in turn helped Barnier to “smuggle a Preparatory Action on CSDP-related research into the 2013 communication” (Interview, former European Commission official, February 2020).

The December 2013 European Council welcomed the Commission’s communication and agreed in its conclusions that a “Preparatory Action on CSDP-related research will be set up” (European Council 2013). These ambitions were then echoed by the June 2015 European Council, which emphasised a focus on defence research for the first time; moreover, it highlighted the need for “appropriate funding” for the PA (European Council 2015). This action is notable, as there had been strong push back earlier from some of the member states and from the European Parliament against the possibility of defence research in the process of developing the ESRP (James 2018, pp. 24–25). The European Council conclusions were thus very important and strengthened the Commission’s ambition to push its proposals forward (Interviews, European Commission officials, February 2020).

In June 2014, the Commission announced that a PA would be implemented in accordance with the multiannual financial framework (MFF) to 2020, while arguing that “if successful, this PA would prepare the ground for a possible CSDP-related research theme which could be funded under the next multiannual financial framework” (European Commission 2014). Moreover, as will be shown, the process to develop the PA (and, later on, the EDF) closely followed the work of the ESRP.

This overall began a process that would be strengthened by external events, further Commission activities and strong political ambitions from within, as well as by support from the European Parliament, European defence industries and some of the most influential EU member states.

The catalyst: exogenous spillover

The first paragraph of the 2017 Communication on the EDF emphasises that

… the EU is facing increased instability and conflicts in its neighbourhood and new security threats are emerging. This situation is unlikely to change in the near future. Citizens increasingly look to Europe for protection within and beyond its borders because the scale of these challenges is such that no member state can successfully address them on their own. (European Commission 2017a)

Several Commission officials explained that external shocks and events such as the crisis and war in Ukraine, the terrorist attacks in Europe of 2015–2017, the migration crisis, the UK leaving the EU, the election of Donald Trump and the changed geopolitical situation following the revival of great power competition were all pivotal for the development of the new EU initiatives. The situation created a strong demand for more EU activities in the field of security and defence. The Juncker Commission clearly used this window of opportunity to propose the EDF and, later on, the Military Mobility project (Interviews, European Commission Officials, February 2020; Interview, European Parliament official, February 2020; Interview, member state official, February 2020). This was similar to the process of establishing the ESRP, in which the Commission used the 9/11 attacks “as a window of opportunity to place the idea of EU defense research onto the policy agenda” (James 2018, p. 23).

Strong demand for EU defence activities also followed the result of the British referendum and the launch of the EU Global Strategy in the summer of 2016 (Tocci 2017). One senior European Commission official explained that “the shock of Brexit opens an opportunity to move forward […]. The Brexit crisis coupled with security challenges calls for a European ambition on defence” (cited in (Béraud-Sudreau and Pannier 2021, p. 300)). Moreover, with regard to this process, a diplomat from one of the larger EU member states described the situation after the Brexit vote:

From the political top, we were now given the task of developing new and bold ideas, because we needed to show new momentum for the Union […] and, in parallel, Barnier, who was working as a special advisor on defence for Juncker, was also drafting some papers on defence issues. The main ideas then were for instance something similar to what later became CARD, to start up PESCO as well as to have the Commission do something. However, we could never have dreamed of a European Defence Fund in this way. Hence in September, it was an incredible surprise when the Commission came [forward] with their proposal on the European Defence Fund […]. And it was not Paris that got the Commission to act; instead, the ideas came from the inside, and we could not believe that they would act as fast and as ambitious as they did. (Interview, member state diplomat, January 2020)

Commission officials also emphasised that this process was accelerated because of Brexit (Interview, European Commission officials, February 2020). The UK had long opposed a stronger role for the Commission within the field of security and defence; however, after the Brexit referendum, the UK dropped its objections. Moreover, the UK now actually supported the PA, as the PA could benefit the UK’s defence industry (Interview, European Commission officials, February 2020; Interview, member state officials, February 2020, Chappell et al. 2020).

Another external pressure was connected to international competition and the deteriorating international security environment, as the Commission argued that reduced defence spending by EU member states together with increased spending by other international actors posed a clear threat towards the EU (European Commission 2016a, Interviews, European Commission officials, February 2020). This situation served as a clear window of opportunity to expand and legitimise the Commission’s involvement in defence policy.

Political ambition: cultivated spillover

Jean-Claude Juncker had already made security and defence a strong political priority in his 2014 campaign to be elected President of the Commission. Consequently, he emphasised that defence should be a priority issue and argued for greater competence for the Commission. Furthermore, the fact that Juncker was elected through the Spitzenkandidat process made it possible for Juncker and the Commission to act in a more political way (Interview, member state official, February 2020). The new Juncker Commission therefore made defence one of its ten strategic priorities (Juncker 2014).

Although the subject of defence was traditionally seen as “something of a dirty word in the Berlaymont [the European Commission building]” (Tocci 2017, p. 95), Juncker now strongly argued that the Commission should take on greater responsibilities with regard to defence issues (Interview, Commission officials, February 2020). Juncker also worked in tandem with the new High Representative/Vice President (HR/VP) of the Commission, Federica Mogherini, to emphasise the need to integrate defence issues at the EU level (Interview, EEAS and Commission officials, February 2020). The launch and adoption of the EU Global Strategy and the Commission’s November 2016 European Defence Action Plan (EDAP) created strong momentum for further EU defence integration. To further create momentum and debate on the European security and defence policy, the Commission published a reflection paper in June 2017 on the future of European defence (European Commission 2017b). Moreover, already in 2015, Commissioner Bieńkowska had set up a Group of Personalities (GoP) to work on a proposal for a PA for CSDP-related research. This approach was also used when the Commission wanted to set up the ESRP, as shown earlier. In this way, the GoP once again served as a way of building a strategic coalition with the defence industry and of creating political support for the initiatives. As a result, it made it possible for the Commission to position the subject of defence high on the political agenda and demonstrate the added value of its involvement (c.f. Citi 2014, Niemann 2016).

The topic of defence was thus a clear priority for the new Commission and was widely referenced in Juncker’s State of the Union speeches (Juncker 2016, 2017, 2018). The idea of an EDF was floated in the 2016 State of the Union speech (Juncker 2016). The ideas behind the EDF and the decision to present these in the State of the Union speech came from the very top of the Commission. As a senior official in the EEAS put it,

… in one sense, we had discussed the Preparatory Action on defence research before, so there was already an opening. […] But when Juncker presented the EDF in the 2016 State of the Union, it came as rather a surprise, even to some in the college of Commissioners. So, after that, we started to think about “what do we do” and started to look at the treaties to see what was possible. (Interview, EEAS official, February 2020)

Thus, clear top-down dynamics were involved in pushing forward the EDF proposal, in which President Juncker in particular – in addition to Bieńkowska, her cabinet and Barnier – had a pivotal role (Interview, defence industry officials, February 2020; Interview, European Commission officials, February 2020).

Moreover, a defence industry official explained that the industry, having been involved in the GoP, was expecting a “defence research window” to be funded by the Commission, which the industry saw as a game-changer in itself. But then, after the State of the Union, defence industry officials were summoned to a meeting at the Commission, where they were presented with the new “capability window” of the Fund. This was something that the industry had not expected, and it raised many questions about how the Commission would handle this larger portfolio within the defence industry domain (Interview, defence industry official, February 2020). The Commission’s right of initiative and its strong political ambition were therefore important with regard to the EDF proposal.

With regard to the budget, the overall level of funding had been raised early on by the Juncker Commission from around €10 billion to €13 billion, because the Commission expected the member states to reduce this amount during the negotiations on the MFF (Interview, member state official, February 2020). This was a rather large budget – especially in comparison with those of the small pilot project on CSDP research (see below) and the PA, which became the Preparatory Action on Defence Research (PADR) in 2017–2019, and the overall budget discussed within the GoP. The Commission used this large budget as a strong incentive towards the member states (Interview, European Commission officials, February 2020; Interview, member state official, February 2020, see also Gahler 2016).

The European Parliament has been a strong supporter of the Commission’s new role and of the overall ambition to strengthen the EU’s capabilities in security and defence (Interview, European Parliament officials, February 2020). This support should be seen from the perspective of the European Parliament seeking to enhance its role in EU foreign and security policy-making over time (Rosén and Raube 2018). Following the Commission’s 2013 Defence Communication and its proposal for a PA, the European Parliament adopted a resolution in November 2013 that strongly “welcome(d) the Commission’s intention to launch a Preparatory Action for EU-funded research in support of CSDP missions” (European Parliament 2013).

The first pilot project on CSDP research was initiated by the European Parliament after a group of Members of the European Parliament (MEPs), led by Michel Gahler from the European People’s Party, launched the first CSDP-related research project in the 2015 EU budget (Gahler 2016). Although the pilot project had a limited budget of €1.5 million in 2015 and 2016, it was a very important step, since this was the first time the word “defence” had been used in the EU budget (Mauro and Thoma 2016, p. 30). The pilot project also created strong momentum for the GoP and the work on the PA (EUISS 2016). The project likewise pushed forward the work of the Commission and emphasised that the future programme should focus on defence research (Gahler 2016, p. 53). MEPs also strongly supported the Commission’s budget proposals for the EDF and tried to defend both the EDF and the Military Mobility project from budget cuts (Brzozowski 2020).

Moreover, in its 2017 annual CSDP report, the European Parliament called for the establishment of a Directorate-General for Defence (DG Defence) within the Commission (European Parliament 2017). By 2019, the new DG DEFIS had been set up by the Commission in order to handle, among other things, the EDF and the implementation of the Military Mobility programme and the space programme (European Commission 2019a). This was politically notable, since it showed that the Commission was becoming an increasingly important actor in defence policy.

The “authorisation process”: functional spillover

Despite the goals of the 2009 defence directives, the European defence industry and market are still largely driven by national concerns and are thus still highly fragmented (Besch 2019). This is clearly evident from the Commission’s own evaluations of both Directive 2009/81/EC and Directive 2009/43/EC (European Commission 2016b, 2016c). Hence, in its communication on launching the EDF, the Commission stated that the “European defence industry is characterised by insufficient levels and quality of investment in development” and argued that member states are not cooperating sufficiently, which can be seen in the fragmentation and duplication of weapon systems in Europe (European Commission 2017a, pp. 2–3).

In its quest for greater involvement in the policy field, the Commission argued that this high degree of fragmentation and duplication meant that it should step in to restructure the market (Interview, European Commission officials, February 2020). Moreover, the Commission’s arguments are clearly connected to the ambitions set out by the 2009 defence directives, which emphasised the goal of establishing a European defence market (European Commission 2016a, pp. 4–7). Accordingly, Commission officials have argued that, because the results of the 2009 directives have been so limited, the best alternative is to create greater financial incentives through the EDF, in order for member states and the industry to work together (Interviews, European Commission officials, February 2020). Hence, by building on the goals of the 2009 defence directives, the Commission has been able to strongly legitimise its new role in the EDF. The connections between different policy initiatives, such as the ESRP, the defence directives and the EDF, also reinforce these structures (c.f. Citi 2014). Moreover, the Commission strengthened its ambitions when the December 2016 European Council supported the EDAP (European Council 2016).

The inability to establish any larger industrial projects at the EDA was another argument for the Commission to act in this field (Interview, European Commission officials, February 2020; Interview, member state officials, February 2020). The member states’ cuts to defence budgets and the decline in investment in defence-related research and development were another pressure (Ianakiev 2019). Finally, the process was reinforced by the increasingly interlinked internal and external security and defence policies after the EU Global Strategy (c.f. Bergmann 2019).

The development processes for the EDF proposal and its forerunner, the European Defence Industrial Programme (EDIDP), were also extremely rapid. Since the December 2016 European Council asked for the EDF proposal to be presented in the first quarter of 2017, the Commission had to rely on the staff working document instead of a regular impact assessment of the EDIDP (Scheinert 2018). The EDIDP was also negotiated very quickly compared with similar EU programmes because of the pressure to “get it going” in the 2019–2020 budget (Interview, member state official, February 2020). This rapid progression echoes neofunctionalism’s assumptions that decisions are often made urgently under pressure from approaching deadlines (Haas 1970).

“Coalition building”: political spillover

The European defence industries have contributed strong additional pressure towards integration. Although there was at first some mistrust from parts of the industry in regard to the Commission’s new role in defence research, this mistrust soon disappeared due to the possibility of new funding (Interview, defence industry officials, February 2020). Both the declining defence budgets and the cost of industrial development created pressure in this regard; or, as one defence industry official put it, “the increasing cost of new products and a history of declining defence budgets now means that no single European country can afford the next-generation defence platforms” (Interview, defence industry official, February 2020). The European defence industry has therefore urgently sought and strongly supported new initiatives at the EU level to act as catalyst for defence research and development. As a result, the EDF proposal met with great excitement (Interview, defence industry official, February 2020, see also ASD 2018). Another senior defence industry official explained involvement in the EDF processes as follows:

We have been incredibly integrated into this process, and we have worked in various forms and groups to provide input to the Commission. We have done this during the GoP, the PADR, the EDIDP and now during the development of the EDF, and we have done it in all areas, for instance in regard to the economics at play and how regulations should look for the Fund to work ahead. (Interview, defence industry official, February 2020)

The 2015–2016 GoP also had very strong industrial participation, with six representatives from large European defence industries as well as three representatives from research organisations (EUISS 2016). Consequently, the industry was able to influence this process and the development of new initiatives such as the EDF.

The industry also saw the new initiatives in light of the limited progress in developing new bilateral and/or EDA defence industry projects. Moreover, they observed increasing international competition, especially from the BRICS countries, which brought the risk of lagging behind in industrial development (Interviews, defence industry officials, February 2020).

Furthermore, because of the limited number of staff members working on these issues at the Commission, the Commission viewed the industry as a key partner that could provide important input during the development phase (Interviews, defence industry official, February 2020, European Commission official, February 2020). Thus, the industry’s strong participation and influence in the GoP and in the Commission’s development process of the PADR, EDIDIP and EDF strengthened the industry’s support for the Commission’s new role (Interview, defence industry official, February 2020). The industry has also traditionally had a strong influence on the development process of similar initiatives, such as the ESRP and at least in part, in the 2009 defence directives (Weiss 2013, Edler and James 2015).

Some member states have strongly supported new EU initiatives in this field. In particular, France and Germany have pushed for more EU initiatives on security and defence, especially after Brexit, since both perceived EU defence policy as a way of displaying important new momentum for the EU (Interview, member state diplomat, January 2020, Béraud-Sudreau and Pannier 2021). Moreover, although the Commission is often viewed as an ally of small states, it had earlier allied itself with the larger states in the field of security and defence (Weiss 2013). For Germany, it was also important to create a strong link between the EDF and PESCO, as PESCO had been a strong political priority of Ursula von der Leyen when she was Germany’s defence minister (Interview, member state official, February 2020).

Other member states viewed the initiative positively because of the possibility of financial benefit, especially since defence budgets had been cut across Europe. In particular, representatives from the member states’ Ministries of Defence viewed the proposals on the EDIDP and the EDF positively, as they perceived these initiatives to be a source of “free money”, in some sense, for defence issues (Interview, member state officials, February 2020). The Commission could also incentivise member states – and consequently build coalitions – through the suggested “bonus system” in the EDF. For example, many member states asked for the Fund to involve incentives for small and medium-sized enterprises, mid-cap companies, and so on. Including these different incentive systems in the EDF/EDIDP increased support for the Fund, but also made the framework more complex in the end (Interview, member state official, February 2020).

The Commission’s long-term trust-building process, in addition to strong support from the industry, the political backing of important member states and the incentive system, helped the Commission at this stage. There are also some clear examples of a socialisation process within the negotiations. As one official put it, “even though they have been very tough negotiations, we have always worked towards finding compromises and consensus within these negotiations” (Interview, member state official, February 2020). While economic reasoning mainly motivated the member states, this consensus and compromise culture was important in regard to the development of the EDF. Moreover, the Commission’s trust building process – through its earlier initiatives – were likewise important in this phase (Interview, member state official, February 2020, Interview, European Commission officials, February 2020).

Governance rules and financing: countervailing forces

Having proposed the EDF, the next step in the process was to negotiate the EDF with the Council and the European Parliament. This step mostly involved the EDIDP negotiations, since large parts of these rules were later adapted for the EDF framework (Interview, European Commission officials, February 2020).

A member state official explained the process as:

During the EDIDP process, the Commission even had to explain to people from different member state defence ministries how the decision-making process and comitology worked and what it meant in practice. This is a group that often is socialised within NATO and they are used to having control and being able to stop proposals. (Interview, member state official, February 2020)

Thus, it was sometimes difficult for the member states’ defence ministry officials to deal with the comitology process and with the fact that the Commission was “master of the clock and pen” in the negotiations (Interviews, EDA official, February 2020, member state official, February 2020). The Commission, in turn, strongly emphasised the role of qualified majority voting (QMV) and the community method in the EDF negotiations (Interview, European Commission officials, February 2020). The use of QMV generally tended to enhance and favour the Commission’s proposals, since QMV increases the power of the European Parliament and reduces the number of veto players in the Council (Niemann 2016, p. 147).

Nonetheless, some member states were reluctant to give up too much power to the Commission, while also being sceptical about the relatively large funding scheme. For example, Sweden emphasised the fact that defence was still – and should remain – an intergovernmental area (Interview, member state diplomat, January 2020, Interview, EEAS official, February 2020).

Some member states’ deep industrial, political and security ties to countries such as the United States and the UK also created issues affecting the process. These connections acted as a form of “domestic constraint” (Niemann 2006) because some member states saw new Commission and EU competences in the defence field as a threat to their bilateral relations with the United States and UK, as well as a possible threat to NATO (Interviews, member states, February 2020). Immediately after the launch of the EDAP, some member states thus expressed strong concerns about the Commission’s new role and powers in the field (Interview, European Commission officials, February 2020). However, the EDF’s legal basis enabled the Commission to fight off member states’ attempts to decrease its governance role.

At the start of this process, the U.S. defence industry also tried to influence the development of the EDF (American Chamber of Commerce to the European Union 2018). However, the U.S. administration acted surprisingly late; or, as one member state official put it, “the US acted in a rather careless way, since they acted when, in principle, the whole regulation had already been negotiated and decided on” (Interview, member state official, February 2020). Nonetheless, in May 2019, high-ranking U.S. officials, Ellen Lord and Andrea Thompson, expressed their concerns about the EDF regulations and over third-state participation in PESCO. They argued that the new EU initiatives could act as “poison pills” (Fiott 2019). The late U.S. intervention, however, meant that member states did not want to reopen the negotiations with the European Parliament at this phase (Interview, member state official, February 2020).

There were also discussions among the member states about the connection between PESCO and the EDF. Some member states wanted the PESCO project to be given a form of “automatic affirmative action”, while others supported a more neutral assessment of projects. Moreover, the Council’s legal service initially had problems with the “PESCO bonus”, since it could be seen as discriminatory against Denmark and Malta, which are outside of the PESCO framework. In the end, however, states such as Denmark accepted the incentive system because of the strong political backing of some member states for connecting the EDF and PESCO (Interview, member state official, January 2020, Interview, member state official, February 2020).

In the end, the Commission’s proposals on the EDIDP/EDF were largely maintained, with changes mainly being made to the activities eligible for EU funding and to the different bonuses within the two programmes. The European Parliament preferred tougher regulations on eligible entities, for example, but an agreement was eventually forged (Scheinert 2018, Interview, member state official, February 2020, European Commission, 2019b). The European Parliament however succeeded in obtaining stiffer regulations in regard to, for example, autonomous weapons systems and ethical concerns in the Fund (Brzozowski 2019, Council of the European Union 2020).

Nonetheless, some member states estimated that they would receive less from the Fund than they put into it and thus argued in favour of reducing the overall funding for the EDF, while other member states took a budget-restrictive approach to the 2021–2027 MFF as a whole (Interview, member state officials, February 2020). Thus, the overall situation served as a domestic constraint for some member states in regard to the EDF, which consequently created pressures to reduce the funding for the EDF and other new EU defence initiatives. The COVID-19 pandemic and the strong economic downturn also created pressure to reduce the overall level of funding. However, even before the pandemic, the EDF’s budget was being reduced, as was the funding for the Military Mobility project and the new off-budget European Peace Facility. In December 2019, the Finnish Council Presidency proposed a €6.014 billion budget for the EDF (Finland EU Council Presidency 2019). This proposal was in line with a more budget-restrictive approach. However, other member states – especially France – wanted to keep the budget as large as possible and argued that the EDF budget should be at least €10 billion (European Parliament 2020). In a letter to HR/VP Josep Borell in May 2020, the defence ministers of France, Germany, Italy and Spain argued for an “ambitious EDF budget as a priority in the defence area and a swift adoption of the EDF regulation” (Government of France 2020). Nonetheless, during this final phase, the biggest change was in connection with the overall EDF budget, which was finally set at €7.953 billion (Council of the European Union 2020). This allocated budget should be seen in the light of the COVID-19 pandemic and the resulting economic downturn, as well as in relation to the economic and domestic constraints of some EU member states.

Concluding remarks

The main aim of this article was twofold: to explain the establishment of the EDF and the Commission’s new role within the field and, to a lesser degree, to outline the role of revised neofunctionalism within this policy field. To achieve its aim, this article empirically traced the development of the EDF and the new and ambitious role of the European Commission in a highly political and sensitive policy field (for a critical take on the EDF, see also Goxho 2019).

While others have used similar theoretical approaches (e.g. Haroche 2020) to explain the establishment of the EDF, this article is one of the first dealing with the whole policy process of the EDF – from the long-term ambition of the Commission to the EDF proposal and the negotiations process, and on to the final decision regarding the EDF’s overall budget. Consequently, this article contributes to an emerging literature on the EDF and on the European Commission’s new role within the field of security and defence. This article also outlined the importance of exogenous events in the decision-making process and in the theoretical framework of revised neofunctionalism. Thus far, classical neofunctionalism has mainly focused on internal dynamics, and has often missed how external factors can affect the policy process and therefore often serve as a catalyst. Finally, it suggested a larger role for the member states within the process, and thereby presented integration within the neofunctionalism framework as a non-automatic or deterministic process.

This study moreover challenges the claims by new intergovernmentalism that EU member states first and foremost empower de novo bodies (Bickerton et al. 2015), especially since we are now witnessing integration within a policy field of high politics. The study also provides evidence of strong political entrepreneurship by the Commission and helps to further revitalise the discussion on supranational decision-making in this policy field.

Another implication of the EDF and the work of other EU defence initiatives is the impact on the EU’s role, both internal and external, as a “soft” or “normative” power. With all of the new security and defence initiatives occurring after the EU Global Strategy, the EU’s role is clearly changing. However, as Arnout Molenaar of the EEAS put it, “there is still a learning curve for the Union to develop a ‘hard power’ mentality” (Molenar 2021). Nevertheless, new initiatives such as the EDF, PESCO and CARD could serve as strong and necessary stepping-stones for the EU and its member states to develop greater capabilities within the field.

The Commission’s new role in the field is also important from the broader perspective of European integration. As Karampekios et al. note, the EDF affects the “very nature and the orientation of the European project” (Karampekios et al. 2018, p. 377). Hence, the ever-increasing involvement of the Commission in a policy field close to national sovereignty is starting to blur the traditional dichotomy between intergovernmental and supranational decision-making within the policy field. This article is thus part of the growing literature on the weakening of intergovernmentalism within the EU security and defence field (Howorth 2012, Chappell et al. 2020).

The EDF and the Commission’s enhanced role also create new questions that need to be further addressed. One strand of research should focus on the implementation of the EDF; for example, what will it mean for defence industry development at the European level? Another prioritised area for the new DG DEFIS will be the connection between space and defence (e.g. Fiott 2020), which will require further research. Moreover, how will the Commission develop and handle other new initiatives, such as Military Mobility? Finally, there is still a great deal of unclarity in regard to Brexit and the new momentum in defence industry cooperation at the EU level (Mawdsley 2020). With the new trade and cooperation agreement with the UK in place, even though it does not address security and defence aspects (The Guardian 2020), more research needs to be done on possible cooperation between the EU and the UK within the field of security and defence, and especially in regard to defence industry dimensions.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Interviews

1. Defence industry official, 6 Dec. 2019

2. Member state official, 13 Jan. 2020

3. Member state diplomat, 20 Jan. 2020

4. Member state official, 6 Feb. 2020

5. EEAS official, 13 Feb. 2020

6. European Parliament official, 14 Feb. 2020

7. Member state official, 14 Feb. 2020

8. European Commission official, 17 Feb. 2020

9. European Commission official, 17 Feb. 2020

10. European Commission official, 17 Feb. 2020

11. European Commission official, 17 Feb. 2020

12. Member state official, 18 Feb. 2020

13. Defence industry official, 18 Feb. 2020

14. Member state official, 20 Feb. 2020

15. Former European Commission official, 20 Feb. 2020

16. European Commission official, 24 Feb. 2020

17. Member state official, 25 Feb. 2020

18. Defence industry official, 25 Feb. 2020

19. EDA official, 26 Feb. 2020

20. EDA official, 26 Feb. 2020

21. EEAS official, 28 Feb. 2020

22. Defence industry official, 28 Feb. 2020

23. European Parliament official, 28 Feb. 2020