Security in the age of austerity: You get what you pay for

Europe’s neighbourhood is too dangerous for decisions on defence budgets to be left to austerity-minded finance ministers. The UK should set a good example.

The EU is in a dangerous neighbourhood, but shrinking European defence budgets suggest that finance ministries either have not noticed or do not care. According to the Stockholm International Peace Research Institute (SIPRI), from 2004 to 2013 defence spending in Europe fell by 6.5 per cent (in constant dollar terms); in some countries, including the UK and Italy, it fell by more than 10 per cent. Over the same period, Russia's defence expenditure more than doubled, and China's rose by 170 per cent. Saudi Arabia is now spending more on defence than the UK.

At the NATO Wales Summit in September 2014, the alliance's member-states agreed that they would "aim to move towards the existing NATO guideline of spending 2 per cent of GDP on defence within a decade". Since then, countries like Belgium and Italy have announced further cuts. Across Europe, defence spending in 2013 (according to NATO figures) averaged around 1.6 per cent of GDP. Only Estonia, Greece and the UK spent 2 per cent or more.

Some European politicians have begun to discuss the threats that Europe faces and the need to invest in countering them. The EU high representative for foreign and security policy, Federica Mogherini, has started work on updating the EU's 2003 security strategy (see Rem Korteweg’s insight of January 19th). Britain's foreign secretary, Philip Hammond, spoke at the Royal United Services Institute on March 10th of the threats to the UK from terrorism and Russia. President Bronisław Komorowski of Poland told the German Marshall Fund's Brussels Forum on March 22nd that the post-Cold War peace dividend had run its course. But what will Europe do to respond?

Prime Minister David Cameron vocally supported the NATO 2 per cent target at the time of the NATO summit. But the UK is likely to undershoot it by 2017, if not sooner. To disguise this, government ministers have been trying to include other spending (especially on the intelligence services) under the heading of 'defence'. The Chancellor the Exchequer, George Osborne, repeatedly avoided endorsing the 2 per cent figure during an interview on March 19th, saying only that the Conservative Party was "committed to keeping our country safe". In election campaigns, the Conservatives have often portrayed themselves as supporters of strong defence; but this time they are trying not to talk about it at all. The Labour Party is poorly placed to exploit this: Shadow Chancellor Ed Balls has suggested that a Labour government would also cut defence spending, though by less than the Conservatives.

The UK's position is bad news for several reasons. First, Britain has traditionally been the strongest link between the US and Europe in the defence and security fields. Now Britain seems to be adopting bad European habits. From President Barack Obama downwards, publicly and privately, the Americans have been critical of the trend of declining defence spending in the UK. Senior Americans like the former defence secretary Robert Gates have long warned that Europe cannot continue to benefit from US defence spending while doing little for itself. If the US cannot even rely on the UK, the risk that America will reduce its commitment to European security will grow.

Second, cuts in the UK's defence capabilities hit the Franco-British relationship, which is central to any serious European defence co-operation. The UK and France provided both the political impetus and military muscle for operations against Colonel Qadhafi in Libya in 2011. But the UK's role in French operations in Mali and the Central African Republic since then has essentially been limited to providing air transport. Paris knows that it cannot lead European defence efforts by itself. French officials have privately expressed strong concerns about the effect of likely budget decisions on the UK's force structures and therefore on its ability to co-operate with France. They are also worried that defence budget cuts, like the 2013 parliamentary vote against intervening in Syria, are signs of a growing British isolationism.

Third, British ministers will no longer have any credibility when they press other European leaders to spend more on defence, if the UK itself is heading in the opposite direction. All governments in Europe are under pressure to reduce expenditure; for most, with honourable exceptions like Poland, it is politically easier to cut defence budgets than health and welfare. Britain may encourage a downward spiral in defence spending in Europe.

Some EU leaders will be happy if the UK stops nagging them to do more on defence. But Commission President Jean-Claude Juncker was wrong to tell Welt am Sonntag on March 8th that “military answers are always the wrong answers”. Sometimes only effective military action can create the space to settle conflicts politically. By repeating the mantra that “there is no military solution” in Ukraine, the West has handed the initiative to Putin, who is ready to impose one. Andrew Wilson of University College London said memorably at the beginning of the Ukraine crisis that the EU “took a baguette to a knife fight”. A frank debate about European defence and security needs to acknowledge that the EU does not just need soft power tools like trade, aid and the rule of law if it is to ensure stability and progress in the neighbourhood. Europe may keep a baguette in one hand; it needs a sharp knife in the other.

Juncker was also wrong to suggest that Europe needed its own army – not just because the idea energises British eurosceptics in a sensitive pre-election period; but because institutions and processes cannot substitute for defence capabilities and political will. Having a European operational headquarters is of no use if there are too few forces to command and no consensus on what to do with those forces that exist. The EU can do more, however – if allowed by the UK and others – to help rationalise European defence markets, ensuring that the money that is available is spent efficiently; and to encourage its member-states to work together better on defence. There are good examples of countries agreeing to share capabilities, rather than duplicating them, among the Benelux and Nordic countries. But Europe needs to get beyond delivering the same output for smaller input, and increase both. That should be the focus of the European Council’s discussions on European defence in June, and of NATO’s spring ministerial meetings.

The next British government also needs to recognise the European dimension of defence and security policy. Britain faces larger and more diverse threats than in 2010 when it published its last national security strategy. But whatever Britain spends on countering them, the impact will be greater if the rest of Europe takes defence more seriously. A good starting point for the government that wins May’s election would be to reinforce Franco-British co-operation, to reassure France that the UK will remain a reliable defence partner. Then these two countries should persuade European finance ministers to stop budgeting on the basis that the world is at peace and defence spending is a luxury.

Ian Bond is director of foreign policy at the Centre for European Reform.