European Commission Plans for ‘War Economy Mode’ in Defense Industry – Sky Bulletin

by Vishakha Singh

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In light of the ongoing conflict in Ukraine, the European Commission is set to propose a shift towards a ‘war economy mode’ in the European arms industry. On March 5, EU officials informed Reuters of intended measures to stimulate the European defense sector.

According to these officials, European Commissioner for Internal Market Thierry Breton is gearing up to recommend collective procurement from European arms companies, as well as strategies to expand their manufacturing capabilities.

These forthcoming proposals emerge amid EU concerns over the reliability of the United States as a security partner, particularly in support of Ukraine, depending on the results of future presidential elections.

Breton emphasized the need for Europe to adopt a “war economy mode” which necessitates the European defense industry to assume greater risks with the support of the EU. “In light of the current geopolitical context, it is imperative for Europe to assume more responsibility for its security, independent of our allies’ electoral outcomes every four years,” Breton stated.

Remarks made by former U.S. President Donald Trump, suggesting he might encourage Russia’s actions towards NATO allies who fail to meet defense spending objectives, have raised eyebrows internationally and spurred discussions in Europe about self-sufficiency in defense.

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The European defense sector’s ability to support Ukraine has recently been called into question, following shortcomings in delivering promised artillery shells. After providing only about half of the pledged rounds, the EU has postponed its delivery commitment to later this year.

Breton’s suggestions include obligating European arms manufacturers to prioritize European orders in crisis scenarios, similarly to the U.S. Foreign Military Sales program, as per Reuters’ report.

Additionally, Breton is expected to propose a financial aid package worth 1.5 billion euros ($1.63 billion) until the year 2027, which will also establish a legal basis for increased investments. Earlier in January, Breton had proposed a 100 billion euro ($108 billion) fund intended to enhance the European defense industry.

EU officials have also expressed a desire to include Ukraine in the procurement scheme to collectively boost production capacity.

One official mentioned the objective is to “treat Ukraine as nearly equivalent to an EU member state.” The proposals will require approval from all 27 member states and the European Parliament.

Opinion: Will Europe ever get serious about defense?

During the Munich Security Conference, the dialogue on European security cooperation provoked skepticism among attendees, with concerns that messages of complacency may embolden other powers like China.

FAQs About the EU’s Shift to ‘War Economy Mode’

  1. Why is the EU considering a ‘war economy mode’?
    The EU is considering this approach in response to the ongoing Russian aggression in Ukraine and concerns about over-reliance on the United States for security, particularly in light of uncertain future U.S. presidential election outcomes.
  2. What did Thierry Breton propose?
    Thierry Breton has proposed joint procurement from European arms companies, increased production capabilities, compelling European arms companies to prioritize European orders during crises, and setting up a European version of the U.S. Foreign Military Sales scheme.
  3. What is the proposed financial aid package?
    A proposed financial aid package of 1.5 billion euros ($1.63 billion) will be offered through the end of 2027, providing a legal framework for further contributions.
  4. Will Ukraine be included in the procurement scheme?
    Yes, EU officials wish to include Ukraine in the procurement scheme to increase production capacity.
  5. Does the plan need approval from all member states?
    Yes, the proposals need unanimous approval from all 27 EU member states as well as the European Parliament.

Conclusion

The European Union is positioning itself to adapt to a more autonomous and resilient defense posture by proposing a shift to a ‘war economy mode’. Commissioner Thierry Breton’s suggested measures aim to strengthen the European defense industry by elevating its capacity to respond efficiently to crises, emphasizing the significance of European collaboration and support for Ukraine. Achieving unanimous support from member states and the European Parliament will be a crucial step in realizing this strategic shift.

Note: TheUBJ is an aggregator and does not claim ownership or authorship of the news content. The original article can be found at https://kyivindependent.com/eu-to-propose-switching-european-defense-industry-to-war-economy-mode/ for reference.

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