By Nicoleta Pauliuc, chair of the Defense Committee in the Romanian Senate
The Russian Federation’s unprovoked war of aggression against Ukraine has radically changed the security landscape in Europe, representing the worst conflagration on European soil since World War II. In this context, the European Union is obliged to improve its military posture, including its defense industry. We need to move from a one-off, crisis response to a long-term, strategic approach, aimed at consolidating and establishing a military production, integration, testing and maintenance capability on national territory.
Historically speaking, such a paradigm shift is not easy. Defense and national security is an area where Member States are reluctant to transfer decision-making power to Brussels. National interests and the natural impulse to protect national industry have made it difficult for European states to work together on defense procurement. For example, between 2021 and 2022, only 18% of defense equipment was procured in a collaborative way at the European level, even though European defense spending reached €270 billion in 2023.
This is the background against which, on 5 March 2024, the European Commission launched an ambitious program to prepare the EU defense industry: the European Defense Industrial Strategy (EDIS), together with a new regulation for the European Defense Industrial Program (EDIP).
The strategy proposes a number of specific statistical indicators, including: ‣ By 2030, the value of intra-EU arms trade should represent at least 35% of the value of the European market; ‣ By 2030, at least 50% of Member States’ defense procurement budget should be allocated to European industry procurement, and 60% by 2035; ‣ By 2030, Member States should procure at least 40% of their defense equipment in a collaborative manner.
The overall objective of the strategy is to identify defense projects of common interest and to create the conditions for equipment to be produced by European industry. To this end, a first line of action is to establish an inventory of existing European capabilities, a kind of catalogue of equipment that can be produced in Europe. Simply mapping capabilities can prove challenging, as it requires access to sensitive information from Member States and arms manufacturers.
A second key line of action is financial support to Member States for the procurement of European industry products, with a focus on joint procurement programs between several Member States. The financial dimension is very important because the strategy can only work if it is adequately funded.
In view of the major interest in this area, the Romanian Senate has adopted several proposals on the European Parliament and Council Regulation establishing the European Defence Industrial Program (EDIP), including:
- Continuation of Third States Participation in the Program: Romania supports the participation of third states in the European Defence Industry Program, as part of related European projects or, at least, the acceptance of the participation in projects of companies with non-EU shareholders (joint-ventures). Our interest comes from the fact that Romania has ongoing procurement programs with companies from third states, which include significant offset, technology transfer and greenfield investments components, which can be considered as national contribution to the European Defence Industry Program. Obviously, we cannot ignore the combat experience of the defense capabilities of non-EU allied or partner states.
- EU Assistance to the Eastern Partnership Countries: We strongly support the inclusion of the Republic of Moldova in the European Defense Industrial Program (EDIP), with a status similar to Ukraine. The Republic of Moldova is the state most affected in the region, after Ukraine, by Russia’s war of aggression. Ensuring continuity of EU assistance to partner states in the Eastern Neighborhood is essential for regional stability and security.
- Criteria Favoring Member States in Proximity of Conventional Confrontations: We propose criteria favoring Member States in proximity to conventional confrontations in the awarding of projects/funding. This can lead to the strengthening of the European technological and industrial base in the field of defense in a geographically balanced manner across the Union. States such as Romania and Poland, which are on the Eastern flank of the EU, would thus benefit from additional support to face security challenges.
- Flexibility in the Minimum Number of Member States Required to Participate in the Proposed Instruments: It is important to maintain flexibility in the minimum number of Member States required to participate in the various proposed instruments. This would allow adaptation to the challenges of the regional security context. For example, if Romania and Poland, as the largest states on the Eastern flank, have a joint project, this could be linked to the European program on the defense industry.
These proposals reflect Romania’s strategic interest in the context of the new European defense strategy. Our country has a crucial role in the security architecture of the EU and NATO’s Eastern flank. The Romanian defense industry can contribute significantly to the common European objectives, both through its production capabilities and through existing strategic partnerships with companies from third countries.
My belief is that, if we still allocate 2.5% of GDP to Defense, then it is mandatory that this money is also found in the restarting of Romanian companies. There is also good news. First of all, we still have good and valued specialists on the technical side. There are people who have been trained, including within NATO, people who have worked with and at major companies that produce military technology for member states of the North Atlantic Organization. Secondly, Romania has an important tradition in the defense industry. As you well know, we used to be exporters of combat technology.
Three things seem essential to me as we move into the future: a) We must have a higher engineering school specifically tailored for the production of military technology. We have extraordinarily capable young people who, guided in this direction, could play an essential role. b) The partnerships we develop with EU and NATO member states should also be geared towards importing know-how: we should also learn to do new things, especially as this industrial sector is changing at a very rapid pace. c) At some point, we can even build programs to capitalize some companies in the defense industry that are currently working at break-even levels and would need financial support to reach the desired level.
In conclusion, the European Defence Industrial Strategy (EDIS) and the European Defence Industrial Program (EDIP) are important steps towards strengthening the European Union’s defence capabilities. We must use these instruments and opportunities to help Romanian companies. Romania is ready to play an active role in this process, contributing to Europe’s security and stability.
