NATO-EU Political / Military Events / October (II)

Contents:

NATO

• "Trident Juncture" 2018 exercise - a possible Scandinavian option for NATO

EUROPEAN UNION

• Can the EU's defence and security support economic integration?

DEFENCE INDUSTRY

• Factors influencing defence spending in Europe

NATO

The "Trident Juncture 2018" exercise - a possible Scandinavian option for NATO

After Russia ended its "VOSTOK 2018" exercise, presented as the largest military event since 1981, Moscow's focus is on the NATO exercise, "Trident Junction" 2018, proven to be the most a massive and coordinated show of force training of the Alliance in the last 30 years.

Russia's efforts to monitor the exercise are boosted especially because two non-NATO countries, Finland and Sweden take part in these military manoeuvres.

Finland, a country that has traditionally tried to balance ties with both NATO and Russia, contributes about 2,000 troops (compared to the 160-military participated in the 2015 exercise). It will also provide ships and aircraft and allow NATO aircraft to operate from its air base located in Rovaniemi.

Sweden, which has flirted more and more with the idea of ​​joining NATO, takes take seriously the "Trident Junction" 2018 exercises and will participate with about 2,200 troops and four Gripen fighters to operate from the Norway air bases.

Moreover, just before the main event kicks off, the Swedish, American and Finnish forces will conduct their own exercises in Sweden, and the movement of forces belonging to the NATO member countries participating in the exercise will have the dislocation itinerary through Sweden.

After the spring of 2017, when Norway have had to cope with a significant wave of attempts by the Russian bombers to get closer to the Vardo radar station near the Russian border (the station hosts US radar systems that help keep watch on Russian submarine and naval activity), the impressive force of the exercise provides Norway, as a host nation, with an excellent opportunity to train realistically with allied troops.

All this demonstrates that Moscow's concerns are justified in view of Sweden's and Finland's increasingly obvious option of approaching NATO. After Russia's invasion of Georgia, annexation of Crimea, and military operations in eastern Ukraine over the past 10 years, NATO exercises make Scandinavian countries stronger, which is becoming more and more complicated for Russia.

It is obvious that for these states / Finland, Sweden, the doctrine on Cold War neutrality has become obsolete, which is why the option of adopting a more prudent and pro-active defence policy becomes a priority.

During the Cold War, Finland remained under Soviet pressure because the Kremlin sought to expand its room for manoeuvre. But it has always remained firm in its commitment to defending his Northern and Western identities.

Similarly, for Sweden, joining NATO remained just a dream because of its geopolitical neutrality and solidarity with the Finns.

The major changes in recent years that have taken place in the security landscape of Northern Europe have made Finland and Sweden increase their defence spending budgets and last but not least, maintain a continuing debate on improving partnership privileged with NATO to obtain full membership.

In addition, Sweden realizes that any threat to the sovereignty of the Baltic States or Norway would also be a threat to its security. Therefore, Sweden is not just about participating in the NATO exercise but also developing a security partnership with Poland to secure the defence of the Baltic Sea region. However, in order to be realistic, we must emphasize that there are two currents in Sweden that are radically different in approaching full NATO membership and, to date, this collision of options opposes a rational debate on the security.

Unlike Sweden, Finland has adapted more easily to new geopolitical realities, expressing explicitly that NATO membership is an important option for its security policy.

Under these circumstances, the "Trident Junction 2018" exercise will provide Sweden and Finland with the platform to test the actions of a Swedish-Finnish mixed brigade, led by a Swedish, alongside the NATO forces, to the Swedish, Finnish and Norwegian air forces, to participate in naval actions in the Baltic Sea.

The exercise will contribute to operational harmonization and the establishment of joint discouraging capacities for the whole of Northern Europe and the Baltic Sea region, in order to reshape Western defence capability in the region.

Also, the exercise is not a consequence of any acute threat from Russia but represents a system of adequate defence preparedness to ensure peace and stability in the region, a prerequisite for moving to a more constructive relationship with Russia in the long run.

UNIUNEA EUROPEANĂ

Can EU defence and security support economic integration?

The European Union is currently facing existential challenges that include Brexit, migration, the changing security environment, competitiveness and innovation, the digital revolution, climate change, and so on. Moreover, the lack of coordination of national action to identify an adequate response to these challenges will inevitably lead to failure and division. In these circumstances, France and Germany consider that the only appropriate response to these challenges is European cooperation. The Meseberg statement "Renewing Europe's promises of security and prosperity" (19 July 2018) is part of this behaviour. In addition, France and Germany will complete a new "Treaty of Elysée" by the end of 2018 in order to anchor European cooperation in strong bilateral co-operation, but also to foster with the ambition to foster, at least, their economic, social and fiscal convergence.

It is not a surprise that now, when Brexit it's getting close an upshot, the Franco-German tandem desires in the European Union's foreign policy, security and defence field to propose the introduction of new ways to increase the speed and effectiveness of the decision-making process within the EU and more flexible working formats in which the majority vote will be possible. Also in this area, the stimulation of the interest to further develop the emergence of a common strategic culture through the European Intervention Initiative (most likely related to PESCO), as well as the continuation of the joint efforts in the area of ​​capabilities development, benefit from an increasingly urgently preoccupation. Initiatives are realistic now when the European Union faces considerable external risks and security threats on the eastern and southern flanks, as well as renewed pressure to secure its own security itself.

In addition, doubts about North Atlantic solidarity and diminishing European autonomous defence capacity make these initiatives happen a solution. Alongside an increased desire for Member States to move towards a "Europeanization of defence", the Italian proposal to create a "Schengen for defence" and a permanent common military force, the German-French approach becomes a way to move towards a better integrated European defence. The European response to these requests did not delay to appear, and by launching by the European Commission European Defence Fund and the Permanent Cooperation Structure (PESCO), materializing the union domain of the defence and security.

An economic-financial retrospective, in the light of the budgetary effort needed to increase defence spending, highlights that the European Monetary Union, in addition to the difficulties in preventing the relapse of existential threats (e.g. the sovereign debt crisis in 2012), could suffer additional pressure due to national efforts to strengthen defence capabilities.

Economic studies show that the strategic decision to achieve an autonomous defence of Europe in support of NATO could be supported economically by keeping public spending under control.

Starting from the premise that defence and security are European public goods, from an economic point of view, they offer common benefits (a safe environment for the European market and EU growth) that go beyond the cost / benefit analysis of each country.

As a consequence, the modalities and scale of the process of building up European defence capabilities raise design issues similar to those highlighted by economic policy coordination or integration. Similar to the requirements of a collective economic strategy and in this domain, there must be agreement on the purpose, management mode, extent of capabilities and common resources to fund this project. Implicitly, involving common fiscal resources involves making joint decisions.

The same studies show that there are other benefits that could help strengthen the economic and monetary union.

Thus, the distribution and duplication of defence spending across the European Union offers ample opportunities to increase the efficiency of the use of the European Defence Fund (the most pessimistic estimates expect approximately EUR 25 billion in gains - compared to a total spending of EUR 227 billion for European Union in 2017).

Maintaining an industrial and technological defence base is a strategic requirement and must reflect European choices in public procurement processes, thus helping to overcome the national biases that still persist in this area.

On the supply side of the economy, modernization of defence technologies, harmonization of standards and the creation of an integrated European defence industry should also support economic growth and convergence within the European Union.

The existence of a $ 120-140 billion gap to achieve global performance in terms of interconnection and digitization of its military equipment will entail investment in R & D, innovation and training with minimal initial economic impact in the private sector but with future prospects beneficial for the technology, electronics and transport industries, all closely related to defence and security.

Paradoxically, while there is an increase in defence spending, the efficiency gains outlined above also imply budget savings at national level that can provide greater fiscal space, including in economic downturns.

In the case of countries subject to an excessive deficit procedure, in line with European fiscal rules, such efficiency gains or even pooling would ease compliance with the 3% deficit limit of the Stability and Growth Pact.

In short, the transition to a new European integration with a European defence and security budget implies the possibility of using the common resources.

As far as there is scope for further investment in defence, the concern must be to avoid widespread competition for defence employment and to pursue efficiency gains by strengthening the European defence industrial base.

This perspective would cause a political debate, and citizens' consultation and the democratic process take time, but the result will be a truly public European public on the costs, benefits and methods of European integration.

DEFENCE INDUSTRY

Factors influencing defence spending in Europe

Even if Europe's economic recovery has been slow and countries are trying to reduce their national debt by reducing government spending, conventional and unconventional security threats as well as NATO and US pressure to meet military spending commitments could be sufficient to cause a significant increase in defence spending in the future.

A brief retrospective of the security situation at European level highlights the fact that it is influenced by the following factors:

• hybrid threats from countries wishing to destroy the European Union;
• the increased tempo of air policing measures carried out by the European air forces and the need to maintain the high availability of the combat aircraft fleet;
• enhancement and permanence of the presence on the eastern flank of NATO forces;
• existence of the effects of the ongoing cyber warfare;
• the existence of the danger of using chemical weapons (already used in conflicts in Syria and Iraq);
• effects of refugee crisis, etc.

Considering that these are the main factors influencing defence spending in Europe, we can try to identify the main investment directions at European level.

For the coming years, increase of the military aircraft maintenance, repair, and overhaul business as well as the strengthening of air defence equipment, both tactical and missile defence systems, will be one of the priorities.

Especially for countries on the eastern border of Europe, the need to reconfigure land forces and equipping them with armoured vehicles and self-propelled artillery systems will be a major concern that can be resolved either by re-launching or modernizing existing ones, as well as through acquisitions of new equipment.

In the cybernetic field, there is a need upgrading cyber defence tools, cyber intelligence gathering, infrastructure development as well as citizens training. The CBRN (Chemical, Bacteriological, Radiological, and Nuclear) domain will require improvement of identification, recognition and protection capabilities.

For shipbuilding, investment in multi-purpose ships, configurable for anti-air, anti-submarine and surface warfare, will be one of the priorities, in addition to the need for improved search, rescue and patrol capability.

It is obvious that member countries are in a different position about the threats at European level.

From this perspective, the need to identify solutions at the level and under European coordination (impossible to achieve at individual level) becomes critical. Identifying and analysing risks, prioritizing and equitably distributing tasks for each member will be a European solution with cumulative effects for each country.

Current developments outline a reality where understanding of threats has led European countries to increase defence spending. To these also contributed significantly the perception that alliance linkages are less secure than before.

Some statistical data will support previous claims. In 2017, Europe had the fastest growth in defence spending in real terms, with a 3.6% increase over the amounts allocated in 2016. In this chapter, Romania holds the leading position spending in 2017 $ 4 billions compared to 2.8 billion in 2016.

It seems that the upward trend will continue in the short and medium term. Therefore, in current terms, and if spending respects the announced budget path, Germany would reach $ 49.7 billion (including pensions) in 2021, and France - $ 59 billion (including pensions) in the same year. Similarly, the British government has pledged to increase its defence budget by 1 billion pounds (US $ 1.3 billion) per year by 2021. As for the Scandinavian states, Denmark wants to increase from $ 3,8 billion in 2017 to $ 5.8 billion in 2023, Norway from $ 6.1 billion in 2017 to $ 7.1 billion in 2020, and Sweden from $ 6 billion in 2017 to $ 7.6 billion in 2020. It is encouraging that the same trend remains in the South-European area. Spain will spend $ 21.1 billion by 2024, rising from $ 12.1 billion in 2017. If we also take into account the fact that the Baltic countries have made from the NATO target of 2% of GDP, the cornerstone of their defence projections, and Poland has announced its ambition to reach 2.5% of GDP for defence spending by 2032, we could conclude that defence spending is accepted as a political priority across the continent.

At first glance, the figures are impressive. Analysing the components of defence budgets, we find that they contain important percentages (up to 33%) for military pensions, to the detriment of R & D that should help prepare the armed forces for current and future challenges.

From this perspective, the recent initiatives of the European Union in the field of defence research and development are all the more important in helping states to spend their defence money effectively.

By joining the Permanent Structured Cooperation framework (PESCO), signatory states agreed on "common, ambitious and binding commitments" (20% of total defence spending for investment and 2% for research). The establishment of the European Defence Fund (EDF) and its entry into force from 2020 will increase the focus on R&D, reinforcing existing collective criteria.

The EU's common fund of around € 500 million a year, albeit modest, should allow pooling of resources, reduce duplication costs and increase cooperation among member states in an area that remains crucial to the generation of future European defence capabilities.

From the perspective of budgeting for defence spending, the defence industry (especially in Eastern Europe) has the chance to re-establish the basis of defence-industry cooperation to harmonize industry investment and defence capabilities. It will be, as I said before, a European solution with cumulative effects for each country.