Can you explain in concrete terms where and how the European Defence Fund will add value to what Member States already do today?
The EU's added value is to develop incentives and mobilise EU policies to help European co-operation. Defence is no exception. The key purpose of the European Defence Fund is to bring together the Action Plan's core proposals for using EU financing tools to support the development of European priority defence capabilities from research and development to placing products on the market.
Currently the funding of major defence capabilities is a challenge for even the biggest Member States. The Commission proposes to support industrial cooperation in defence research and the joint funding of defence capabilities. By mobilising EU instruments and policies, within the limits of the Treaties, the EU can help complement, leverage and consolidate collaborative efforts by Member States to respond to security challenges.
What are the planned practical steps to implement the EDAP in the coming months?
The European Defence Action Plan represents the Commission's vision on how to deliver on shared objectives and the Bratislava Roadmap. The Commission will now discuss these proposals, in particular the creation of a European Defence Fund, with all stakeholders.
How the different actions will be taken forward will vary. For example, any budgetary proposal beyond 2017 such as the future research programme to be launched in 2021 is subject to formal budgetary decision-making which will involve the Council and the European Parliament. The Commission will launch a scoping study in 2017 to refine the budget estimates for the "capability window" of the European Defence Fund.
Our main concern is to ensure that our implementation of the EDAP is done in a transparent way and in close partnership with Member States. We will take advantage of existing fora to discuss specific issues such as the existing technical committees for discussion on the implementation of the two Defence Directives. There will be regular interactions with various Council bodies such as the Political Committee Group and the Political and Security Committee. We must not lose sight of the fact that the implementation of the EDAP should be done in a way that is consistent and complementary with the Implementation Plan of the Global Strategy on Security and Defence and the EU/NATO Joint Declaration.
To ensure a consistency in approach, the Commission will set up an Implementation Steering Group with Member States, meeting on a regular basis, to monitor and facilitate progress in the actions, within their respective competences. A first meeting will take place in the first quarter of 2017. We will also establish a Consultation Forum with the European defence industry.
The proposed Defence Fund would include two ‘windows’: a defence research window and a capability window, i.e. two key activity domains of the EDA. What precise role would the EDA have to play in each of the two windows?
The two windows are in the same Fund but are two distinct financing structures. The role that the EDA and the Commission will play in both will be different and will depend on respective competences.
Starting first with the Research Window; this is a core competence for the Commission. The use of EU funds places obligations on the Commission to ensure that they are used effectively and with Member States having a key role in the decision-making procedures. Therefore, there will be a Programme Committee made up of Member State representatives, chaired by the Commission and with EDA present as an observer. This is the normal procedure that has been agreed by Member States.
The EDA will have a role in managing the projects selected. We will be negotiating a Delegation Agreement with the EDA to allow for the management of the projects once the budget for the Preparatory Action has been agreed as part of the overall EU Budget for 2017.
On the Capability Window, the mechanism outlined is simply a proposal for discussion with Member States on ways to support the joint development of capabilities. The Action Plan makes very clear that it will, I quote, "… be developed further in close cooperation with Member States, the High Representative, including in her capacity as Head of the EDA, …". The development of capabilities goes right to the heart of the EDA's responsibilities and expertise and so it is essential that the Agency is closely involved in its preparation. This will include taking full account of the work that the EDA has led to develop a Cooperative Facility Mechanism. We have also proposed that the EDA should be in the Coordination Board that will ensure consistency between the research and capability windows.
Will the funding only come from Member States or will the EU budget also contribute?
The funding for the Research Window will come from the EU budget. We have proposed an overall budget of €90 million for the Preparatory Action and €500 million per year for a research programme under the next multi-annual Financial Framework starting in 2021. These budgets represent a strong statement of ambition from the Commission to support defence research but these will only be made available with the agreement of the European Parliament and Member States.
For the Capability Window we have proposed that the fund should come from national contributions. This reflects the fact that the issue of capability development is a matter, primarily, of Member State competence. The Commission is ready to explore all financing options available to support the Fund under the EU Treaty.
As far as the capability window of the Fund is concerned, you say it should be able to mobilise about €5 billion/year. Which incentives do you plan to mobilize to attract such funding for capability programmes?
A key objective of the Capability Window is to provide a framework to help Member States to spend their money in a more effective way backed up by Commission's financial and technical expertise in developing and managing European funds. In particular, the capability window could offer the following additional advantages compared to the current situation:a framework to pool and synchronise national contributions to a dedicated project, thus allowing for more efficient and collective use of public spending in defence;
the possibility of a contribution from the EU budget to develop the defence capability priorities identified by the Member States, who will subsequently own the assets;
to the extent debt instruments would be used in this context, the possibility to benefit from certain flexibilities foreseen under the Stability and Growth Pact (e.g. national capital contributions to the capability window could be discounted from the structural fiscal effort expected to be accomplished by Member States).
The proposal for the Capability Window is simply a proposal that we will be discussing intensively with Member states and the EDA overthe coming months.