The new EU defence commissioner, not much money, not much influence

No one knows the hazards of the defence portfolio better than Ursula von der Leyen, whose tenure leading the German defence ministry was marked by a failure to improve procurement or readiness, tensions with military commanders, and an unseemly feast at the public trough for expensive consultants. The decrepit state of the German military exposed after Putin’s invasion of Ukraine can be attributed to her five and half years as its civilian leader. Failing upwards as European Commission President was the only thing that saved her from joining the elephant’s graveyard of has-been politicos. It is therefore puzzling that she would establish a new EU Commissioner for Defence without the prerequisites for success.  

One may speculate that von der Leyen is simply responding to calls for her to “Do something, dammit!” in full knowledge that the EU will never wrest control of European militaries from its member states. The selection of Andrius Kubilius suggests this may be so.  His only real qualifications are that, as former Prime Minister of Lithuania, he has a profound suspicion of Russia and an equal commitment to the need for military deterrence.  However, even a well-regarded former Euro MP like Kubilius will struggle to get his phone calls to national leaders returned. Which may be the reason for his appointment: von der Leyen needed to appease the Euro-federalists in Brussels without angering the big beasts in national capitals. Former leaders of small states and Euro MPs cannot expect a fair hearing in Berlin, Paris or Rome. Kubelius simply doesn’t have the standing to persuade the EU’s Big Three to coordinate their procurement plans, much less abandon any of their pet weapons systems. Any such coordination will be accomplished on a strict capital to capital basis, not through a newly hatched EU commissioner.

Or perhaps, as the scion of an EU grandee herself, von der Leyen may have an unshakable faith in the magic of functionalism.  Much as the Coal and Steel Community begat the Single Market, so will an EU Defence Commissioner spawn a full fledged European Defence Ministry, with all the glorious powers over procurement enjoyed by the Pentagon. Functionalism suggests that cooperation in one discreet area may “spill over” into a more expansive policy agenda. But what drove functionalism forward in Europe was the money behind it: the EU’s core competency lies in redistributing the money provided by its net contributors. Now that the biggest contributor Germany is financially strapped, the engine of functionalism idles for want of funds. While the initial seed money of €1.5 billion granted Kubilius may seem generous, it is less than the defence budget he enjoyed as Prime Minister of Lithuania. 

That said, events could revive functionalism. Should President Trump leave Europe to defend itself, and Germany then drops its opposition to joint EU borrowing, Kubilius could find himself with a budget large enough to encourage some rationalisation of the European defence sector. Freeing member state budgets of the need to foot the entire bill for the hideously expensive hardware and the advanced tech needed to integrate it would boost the standing of the EU defence commissioner, especially among smaller member states struggling to afford modern kit. 

Still, the scale of an EU budget needed to drive procurement decisions in national capitals is sobering. Rheinmetall has an annual turnover of €10 billion, Dassault almost € 6 billion, and Italy’s Leonardo clocks in at over €18 billion.  In revenue terms, these companies are larger than many countries and enjoy the protection of their respective national leaders, who are loath to surrender control of these prized national assets and their highly-paid workforces to the EU. Politico.eu has already dubbed Rheinmetall CEO Armin Papperger the actual European minister of defence for his hyperactive role in coordinating the activities of defence firms to meet, for example, Europe’s commitment to provide one million artillery shells to Ukraine.  Papperger, like his peer CEOs at Dassault and Leonardo has no difficulty gaining an audience in national capitals and can easily swat away any bright ideas proposed by Kubilius. An EU defence budget of a size needed to overawe the likes of Papperger or Leonardo’s CEO Roberto Cingolani is simply beyond the grasp of Europe. The largest US defence contractor Lockheed Martin has revenues of $68 billion, or roughly 8 per cent of the US defence budget. The EU will not impose procurement decisions on its defence contractors or member states until its defence budget is a healthy multiple of Leonardo’s €18 billion. 

Until that extremely unlikely moment, Kubilius must cajole member states to cooperate. His best strategy will be to use his modest pot of money to fund defence subcontractors in smaller member states. Rather than embark on a futile quest to replace the range of European tanks and aircraft with single EU-approved designs, Kubilius could instead seek common subcomponent designs for major weapons systems that could be manufactured by a range of national contractors. Pushing for the purchase of these “off the shelf” subassemblies for the next generation of weapons from a number of EU contractors could provide Europe with economies of scale and the spread of high-tech skills across the union. There is no reason the big EU defence contractors wouldn’t want a deeper pool of subcontractors, a military version of Germany’s Mittelstand, which offered generations of innovation to Germany’s large companies. An alliance of small state defence firms behind his plans could make a success of Kubilius’s tenure, and ensure a useful future for the post.  Modest ambitions suit the modest resources provided the EU’s new defence commissioner.