EU scrambles to redefine what constitutes defence spending

What exactly counts as “defence spending” is the challenge facing the EU as its leaders struggle to find ways to upgrade the bloc’s military readiness in light of the ongoing threat posed by a belligerent Russia and rising concerns about Washington’s commitment to European security. EU rules offer a narrow definition of spending that focuses largely on defence hardware. 

This week, however, its leaders have been examining ways to mobilise hundreds of billions of euros so that member governments can revamp their respective defence spending in a concerted move to strengthen the bloc’s overall military and security capacity. The proposed revamp would allow national governments to get a four-year reprieve from EU deficit caps enabling them collectively to spend up to 1.5% of the EU’s total economy on defence to offset decades of underinvestment in security. The stumbling block is that it requires all EU members to rethink and then unanimously agree as to what constitutes the precise meaning of the term defence spending.

For example, prior to changes agreed by finance chiefs last week, building an ammunition factory was classified as construction, not defence. Poland discovered this when it built a new $1.3 billion factory.

Until now, EU governments could only apply the term defence spending to already-delivered items such as tanks, planes, and guns. Costs of training, hiring and paying new personnel – crews, pilots and mechanics, e.g., were excluded.

That is now about to change, the category having been expanded to include much of what might be considered defence-relevant, “dual-use” goods that can be used by both the military and civilians.

The wider definition is closer to the NATO usage of the term and so goes further towards meeting the 2% of GDP target set for members of the alliance. Nonetheless, there is considerable room for national capitals to dispute interpretations. Some might wish to include stronger roads and bridges to support the passage of tanks, or the production of drones, helicopters, satellites, radars and underground shelters.

“The debate went already very broad and now, of course, what you’re seeing is specific member states coming with their own specific ideas on what else should be considered as defence,” one senior EU official said.

Italy, for example, would like to see what it spends on dealing with migrants coming from Northern Africa included, something EU officials claim will not be countenanced. Likewise, they say Spain’s proposal for climate change projects to be included in the defence category will not be supported. 

EU officials also indicate that cyber security per se does not qualify for inclusion under defence unless, that is, the computers had been bought by the military to prevent cyber attacks.