Europe Forges a New Defense Club -- and the U.K. Isn't Invited

By Laurence Norman and Julian E. Barnes Features Dow Jones Newswires

Britain's looming exit from the European Union has freed the remaining members to deepen military cooperation through a new agreement that will sideline the U.K. But the new EU defense club may discover before long that it needs the muscle of Europe's top military power more than members currently think.

Continue Reading Below

The U.K. for years stymied EU defense projects, worried they would duplicate work of the North Atlantic Treaty Organization. After Britain's June 2016 Brexit vote, the EU began advancing a new plan that signaled determination to deepen links.

EU leaders last week formally approved launching the Permanent Structured Cooperation, or Pesco, with 25 of the EU's 27 remaining countries signing up to increased defense spending. They committed to 17 new defense projects and eventually improving the bloc's ability to project power in hot spots near Europe.

The EU's resoluteness has some in the U.K. worried their defense industry will be shut out of an expanding defense market. EU leaders have made clear that money being allocated for projects -- potentially EUR500 billion ($593 billion) annually from 2020 -- won't be lavished on defense companies based outside the bloc.

"Pesco is for EU member states, very clearly," said Jorge Domecq, chief executive of the EU's European Defense Agency.

How nonmembers like Britain after Brexit will interface with Pesco remains uncertain. Its rules allow outsiders to participate in specific projects if they bring "substantial added value." Britain has been told it could be invited to join projects in exceptional cases, including efforts to boost the bloc's military research.

Continue Reading Below

British military assets and personnel have long played a critical part in EU military and civilian operations and there are doubts how successful Europe's new defense plans will be without British capabilities and know-how. While the U.K. may be able to continue contributing to specific missions after Brexit, it will lose its EU vote in selecting operations and crafting how they are designed.

Britain may continue consulting with the EU on its most powerful foreign-policy tool -- sanctions decisions -- but after Brexit the U.K. will have no EU vote on that either, though it will be free to mirror EU decisions.

The U.K. will continue to have close bilateral defense ties with many European countries, including eastern and Baltic states, who depend in part on Britain's NATO role to hold off threats from Russia. British defense firms have close ties with companies across Europe, most notably Italy and Sweden.

On Thursday, U.K. Prime Minister Theresa May signed a new defense treaty with Poland. Britain and France -- Europe's other country with serious defense prowess -- have also cooperated closely on defense. In November 2010, the two agreed to a new defense partnership, including the sharing of key military assets, joint work on nuclear-testing technology and the creation of a combined joint expeditionary force.

Yet French officials are now sending the message that Britain should expect little from Pesco. That has raised worry that British firms could also be left out if the new initiatives help consolidate a still-fractured European defense industrial base.

"The defense market should remain international," said a former European diplomat. "But if it doesn't, protectionist tendencies could be a problem for the U.K., especially if there is a wave of consolidation."

Yet also uncertain are prospects for Pesco itself. Few European multinational defense projects have succeeded or boosted efficiency. Troubles inside Pesco could prompt France to resurrect its tight security relationship with the U.K., offering Britain a continued EU role.

Europe may also need Britain's scientific prowess. The U.K. accounts for almost half of all EU military research-and-development spending.

Pesco's proponents say it will start modestly and gradually increase ambitions. But there are questions over how far that can go.

France hopes Germany will increase its willingness to devote its defense spending to increasingly hard-edged operations. But a U-turn from Germany's postwar military cautiousness looks far from certain.

The initial set of European defense projects are mostly modest. They include a new infantry transport and a semiautonomous underwater antimine warfare drone, a medical corps and a logistics network.

The EU also wants to fill training and equipment gaps that NATO hasn't managed to address, including helicopter training and a European radio standard.

Mr. Domecq at the EU defense agency said he is confident more ambitious projects will follow.

"Members states will have to show their commitment to a higher level of ambition is materializing," he said.

For now, he sees simply establishing Pesco marks significant progress "You have investment in defense, you have the will to operate together, to deploy together to plan together," he said. "That is the important part."

Write to Laurence Norman at laurence.norman@wsj.com and Julian E. Barnes at julian.barnes@wsj.com

(END) Dow Jones Newswires

December 21, 2017 14:32 ET (19:32 GMT)