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Patchwork procurement? How to bridge parallel initiatives in EU joint defence procurement

By Cédric Lombaerts, Lucrezia Sala (CEPS)

The EU’s defence-industrial base was conceived during peacetime and, because of the ensuing market fragmentation, does not seem fit for purpose to deal with wartime. In an attempt to remedy this, the EU launched several parallel joint defence procurement initiatives (EDIRPA, EDIP, the three-track approach under the European Peace Facility).

Between these initiatives, it is easy to lose sight of the forest in the trees of joint procurement. How do these parallel tracks of procurement tie in together? Are they not fragmenting collaborative procurement efforts even further?

This CEPS Policy Brief sheds clarity on the interplay between these initiatives and suggests four pragmatic paths towards an overarching joint defence procurement framework while playing into the most salient deadlocks in joint defence procurement today.

 

Joint procurement of critical goods during times of crisis is in vogue. From saving lives with vaccines during the pandemic to mitigating energy prices for (vulnerable) consumers, and supporting Ukraine against Russia’s illegal invasion, joint procurement appears to be the go-to solution whenever the EU faces a crisis. The benefits of joint procurement are plenty and well established. Joint procurement reduces costs, creates economies of scale, fosters interoperability, aggregates bargaining power, and overall prevents the Member States from going it alone and unnecessarily competing with each other. In matters of defence, Member States are no longer able to go it alone after decades of underinvestment and downsized production.

And then came the war.

 

Patchwork procurement How to bridge parallel initiatives in EU joint defence procurement 01

The Russian invasion of Ukraine was a wake-up call to Western countries. Whereas increased defence spending emerges as a bright side of this dark status quo, extra cash alone might not be enough to overcome decades of duplication, market fragmentation, and slow technological progress. While it is arguable whether collaborative EU defence procurement is the silver bullet, achieving the goals of the Strategic Compass will ‘only be possible by developing, procuring, and operating military equipment together’.

It is in this context that the dilemma between buying ‘off-the-shelf’ or quickly ramping up production capacity within the EU comes to the surface, each with its own consequences. Whilst the former would lead to increased foreign military dependencies, EU countries could – in parallel – take advantage of their allies’ competitiveness and advance their own industrial base.

However, buying European and enhancing joint procurement would mean shutting down dependencies on third countries, thus fostering the EU’s competitiveness, and reducing market fragmentation. As such, the questions we should be asking ourselves are: how is the EU addressing joint defence procurement? And how can joint EU defence procurement contribute to reducing foreign military dependencies whilst relying more on EU industries and boosting the EU’s technology and industrial base?

 

 

While the Member States replenish dwindling stocks, this Policy Brief first takes stock of recent EU joint defence procurement initiatives, such as the European Defence Industry Reinforcement through Common Procurement Act (EDIRPA), the three-track approach through the European Peace Facility (EPF), and broader European Defence Agency (EDA) endeavours in this field.

In doing so, It aims to anticipate the upcoming discussions on the European Defence Investment Plan (EDIP) by advocating for some pragmatic solutions to familiar predicaments, such as buying European (or not), common funding of defence acquisition (or the lack thereof), and how to strengthen the European Defence Technological and Industrial Base (EDTIB).

 

Read the full policy paper – visit CEPS website.

 

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