1. What is the defense industrial base in Europe?And how doesit compare with the U.S.?
August9,2016, by GabeMasetti
In general terms,Europe’scombinedaverageR&DbudgethasbeenaboutEuro 8 billionperyear,
whereasthe U.S.one is aboutEuro 67 billionperyearandChina’sisaboutEuro 20 billion.1
Inother
words,itis virtuallynonexistentwhencomparedtothe U.S.and severelylaggingbehindcomparedto
that of China. In 2013, France,the UK and Germany(indecreasingorder) accountedfor92 percentof
Europeandefense R&Dand86 percentof Europeandefense R&T.The datadoesnot take into
considerationthatthe lionshare of defenseR&DinFrance and the UK isdedicatedtotheirnational
nucleardeterrentsand,therefore,Europe’sconventional R&Denvironmentisevenbleaker.
What is the significance ofthe data?
The above mentioneddatahelpsprovidingthe proper contextforthe issue of burdensharingwithin
NATO,and the likelihoodthatNATO’sEuropeanmemberstateswill meetthe 2percent of GDP to
defense and20 percenttoR&D enshrinedbythe WalesNATOsummitof 2014 andreaffirmedatthe
recentsummitinWarsaw. If trendsare anyindicationandgiventhe continuedlackof fiscal space
determinedbythe strictausteritymeasuresof the Eurozone, itisveryunlikelythatNATO’sEuropean
memberstateswill satisfythe pledgeddefense andR&Drequirements.
Whydoes thismatter?
It mattersgiventhe growingresentmentinCongressaboutthe perceivedimbalance of defense burden
sharingwithin NATO.2
itmattersevenmore soas efficientandcrediblewaystoremedythe imbalance
are assessedinCongressandthe White House.Whatcan the U.S. do to influence Europe’scalculations
and defense budgetspriorities?The answerisunfortunatelypretty simple:ithasalreadybeenusingthe
full range of diplomaticleverstoaddressalongterm decliningtrendof defenseexpendituresinthe Old
Continent.Evenmore effective thanWashington’srepeatedcallsforactionhave beenrecentRussian
actionsinEastern Europe and greaterinstabilityinthe Middle East.Butevenwithall those very
importantcurrenteventsinvertingriskassessmentsinEurope,there isonlysomuchthat can be
expectedfromindividual Europeannationstatesintermsof increaseddefense spendinginthe
foreseeable future.Why? Twoelementsshape the answertothatquestion:(1) domesticpublic
reluctance towardsignificantincreasesindefense spending;and(2) fiscal obligationsinthe Euroarea.
Europeanpoliticiansare acutelyaware of these constraintsandhave beenconsistentlyrecognizingthat
the onlywayout of thisconundrumis to pool andshare resourcesatthe multinational level torealize
economiesof scale andincreasedoutput,insteadof increasingthe inputatthe national level.
1 European Parliament’s Directorate-General for External Policies,Policy Department, The Future of EU defense
research,March 2016, at
http://www.europarl.europa.eu/RegData/etudes/STUD/2016/535003/EXPO_STU%282016%29535003_EN.pdf.
2 See for example the remarks of Senator Bob Corker, Chairman of the Senate’s Foreign Relations Committee on
June 2016,at http://www.defensenews.com/story/defense/2016/06/23/corker-blasts-germany-laggards-nato-
spending/86302256/.

2. The most recentdevelopment inthistrendisthe unfoldingof the EuropeanDefenseActionPlan(EDAP)
spearheadedbythe EuropeanCommission.3
What shouldthe U.S.do about it?
The optionof continuingtopursue adiplomaticstrategyof pressure targetedtoindividual nationstates
and the whole NATOEuro-groupiscompletelysoundandisalreadypayingoff.Yetsuchcourse of action
inunlikelytotranslate tactical successesintoastrategicrealignmentcapable of producingamore fair
militarycontributionfromEuropeanstatestothe internationalcoalitionsunderAmericanleadership.
Unfortunately,inordertobringaboutsuch systemicshiftrequirespivotingawayfromthe traditional
inter-governmental arenaintothe unchartedand contentiousterritoryof multilateral,collective
solutionssuchasthose of the NATO’sAWACSfleet,the StrategicAirliftCapabilityprogramandthe
Multi-Role TankerTransportFleet. Inotherwords,perhapsincreasedcooperation,poolingandsharing
of capabilitieswithinNATO,spearheadedbyWashington,couldproduce betteroutputsintermsof
Europeanmilitarycapabilitiesgiventhe currentconstrainedsecurityenvironmentinthe OldContinent.
Whetheror notthiswill happendependsalsosignificantlyonwhatcourse of action the White House
and the Congresswill decidetopursue inthe comingmonths.
3 See for example Daniel Fiott, After the EUGS: connecting the dots, European Union Institute for Security Studies,
July 2016 at http://www.iss.europa.eu/publications/detail/article/after-the-eugs-connecting-the-dots/, and the
European Leadership Network’s Analysis of the 2015 Budget Decisions in NATO Member States at
http://www.europeanleadershipnetwork.org/the-wales-pledge-revisited-a-preliminary-analysis-of-2015-budget-
decisions-in-nato-member-states_2472.html.