In the second part of today’s EU subcommittee of the National Council, the plans to establish a European Defense Fund were on the agenda. With this, the EU wants to achieve more cooperation between member states in military research and the procurement of defense equipment, but above all to close gaps between research and development.
A common position of all member states was reached on the corresponding draft regulation during the Austrian Council Presidency, and it is expected to be adopted in April 2019. The defense fund is integrated into the research framework program in the upcoming financial framework 2021 to 2027, which for the first time includes a separate chapter for security and defense in the amount of 13 billion euros. In this context, Defense Minister Mario Kunasek spoke of a “huge opportunity” for domestic small and medium-sized enterprises. In the meantime, a concept has been developed in his department with regard to the domestic strategic orientation, the MPs were told. Alois Rosenberger (ÖVP), Hermann Krist (SPÖ) and Douglas Hoyos-Trauttmansdorff (NEOS) took part in the debate. The EU Defense Fund is intended to promote the efficiency, competitiveness and innovative capacity of the European defense industry, the EU Commission underlines in its proposal for a regulation. The EU budget would provide funds to support cooperation between EU member states in order to promote security and defense research in particular. The development of key technologies in critical areas is crucial so that Europe is equipped for new forms of attack such as cyber attacks. The industrial potential of military research should also not be overlooked, according to the Commission, which is striving for greater autonomy and freedom of action for the Union in the defense sector.
From Brussels’ perspective, the strengthening of European defense capacities is currently suffering from a fragmentation or duplication of resources at national level. This results in considerable market inefficiencies, especially as national defense budgets, particularly in the area of research and development, have been cut considerably over the past ten years. With the next EU financial framework, the European Defense Fund is to receive a total of 13 billion euros for the period 2021 to 2027, of which 4.1 billion euros would be used for research measures and 8.9 billion euros for so-called capability development, with which research results are used for the development and procurement of defense-relevant technologies. This would make the EU the largest investor in defense research in the EU. The member states, on the other hand, could save up to 30 percent of their annual defense expenditure, according to Brussels, for example if they jointly invest in the development of drone technology or satellite communication or buy helicopters in large numbers and thus reduce their expenditure. The operational capability of the armed forces would also be improved by pooling defense. Only joint projects between EU countries will receive financial aid under the Commission’s plan. The EU wants to favor consortia in which SMEs are involved when it comes to funding. Exceptions to the up to 100 percent co-financing by the fund are planned for the development of system prototypes, a maximum of 20 percent of which would be covered by EU funds, as well as for testing, proof of suitability and the certification of products – here 80 percent of the costs are to be considered eligible for funding. There are also many synergies with other policy areas. These include the Union’s space program, EU initiatives in the field of cyber security, relevant programs in the field of security or measures defined as part of the coordinated research agenda on maritime security in the civil and military sectors and in connection with maritime transport. Preparations for the European Defense Fund already began in 2016 with the announcement of the European Defense Action Plan (EDAP) by the EU Commission. The planned development of the fund to deepen European defense cooperation will initially take place in two phases, aligned with the two areas of the defense fund, the “research window” and the “capabilities window”. The latter serves the seamless transition from research results to market-ready products. In the second phase, this separation is no longer planned and implementation is to take place in an integrated approach. A proposal for a regulation was submitted on June 13, 2018. According to the Ministry of Defense, Austria supports the strengthening of an integrated and competitive defence technology and industrial base in the EU. The European Defense Fund should ensure fair cross-border access to markets and international supply chains, particularly for SMEs. It is also advocated that the fund should not be used for funding that contradicts Austria’s disarmament efforts.
According to the current state of negotiations, the development of weapons is not eligible for funding and remains the responsibility of the nation states.
