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— EU leaders look unlikely to agree easily on a four-year €20 billion fund to help Ukraine keep sourcing arms and training its soldiers.
— The Commission has opened a consultation on its long-promised European Defence Industrial Strategy.
— Sweden has suggested cutting EU spending on space by €1 billion until 2027 in the name of budget savings.
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EXTRA €20 BILLION FOR UKRAINE OFF THE TABLE? Despite a commitment to offer further support to Ukraine, EU leaders seem unlikely to agree to provide an extra €20 billion through the European Peace Facility for the reimbursement of arms shipped to Kyiv in the next four years, judging from Friday’s Council summit in Brussels.
Bilateral focus: Asked about the plan, which was discussed in the summer as a way of helping Kyiv pay its EU allies for arms and training, at the close of the leaders’ summit, German Chancellor Olaf Scholz said: “Many countries are providing very high levels of bilateral assistance — Germany the most, and it will continue to do so. That is what we should focus on now.”
Three-pronged plan: The European Peace Facility is already being used to finance the first two stages of a three-part plan to arm Ukraine that was agreed at a Council meeting March, but outside the EU’s main long-term budget. The financing pays for the immediate transfer of ammunition to Ukraine and for militaries to buy replacement stocks from European industry.
Bit by bit: An alternative to the EPF four-year plan would be to proceed on year-by-year basis and offer €5 billion annually, which would be easier to swallow for skeptical finance ministries.
Trickle down: The fear in some big countries, especially France, is that smaller states are using their defense budgets to buy arms from outside the EU, meaning that subsidies are not flowing back to local defense contractors but are instead heading to South Korea, Turkey and the United States.
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MIDDLE EAST: French Armed Forces Minister Sébastien Lecornu will travel to Lebanon from Wednesday to Friday. He’ll meet with the French troops from the United Nations Interim Force in Lebanon as well as Lebanese Prime Minister Najib Mikati.
MEA CULPA: Friday’s newsletter misstated when the Berlin Security Conference would take place — it will be November 29 and 30. Caleb will still attend.
**A message from ASD: Defence products can take years to develop and manufacture and often have decades-long lifecycles. To be able to plan their investments and establish their supply chains, European defence companies therefore need better and longer-term visibility of their customers’ expected needs.**
DEFENSE STRATEGY CONSULTATION STARTS: The Commission is asking industry for suggestions on what to include in a European Defence Industrial Strategy (EDIS), due to drop early next year. This three-month “comprehensive engagement process” was announced after the Commission was forced to postpone its planned November 8 proposal.
Future focus: The strategy will outline how the EU intends to support the defense industry post-2025, when the €500 million Act in Support of Ammunition Production and the €300 million European Defence Industrial Reinforcement through Procurement Act pools expire. “It is now time for the EU to move from emergency response to the building of the EU’s long-term ability to enhance its defence readiness,” the Commission said in its statement.
Always talking: The EDIS debate dovetails with a separate discussion over the mid-term review of the current EU budget, where the Commission is asking that the European Defence Fund be expanded by €1.5 billion from its current €7.2 billion. The EDF supports R&D investment.
SWEDES PROPOSE SLASHING SPACE CASH: Sweden has a proposal to trim the EU’s long-term budget by cutting €1 billion from space spending. The plan — laid out in a working document obtained by my colleague Paola Tamma — is part of efforts to cut existing EU spending programs by 4 percent, which could generate up to €25 billion in savings.
Big idea: With some €9 billion of the standing €15 billion commitment to the European Space Program already spent or allocated through the end of next year, the Swedish plan proposes to save €1 billion of the remaining €6 billion. The majority of the cuts come from the Horizon EU research program and foreign policy spending.
Just an idea: At this stage, this is a proposal from a single EU country.
Save plan: The cuts would cover a €17 billion to €27 billion budgetary shortfall in EU debt servicing costs; further cash would then be used to finance military aid to Ukraine. The space cash was originally intended for use in Galileo, Copernicus, a situational awareness program, and a new communications constellation dubbed Iris2.
FUTURE COMBAT AIR SYSTEM MOVES FORWARD: Europe’s highly-anticipated Future Combat Air System (FCAS) took a step forward with the signing of an agreement for developing technologies for the Next Generation Weapon System (NGWS).
System of systems: FCAS is an ambitious system of systems combining new aviation technologies that the French, German and Spanish air forces hope will replace their fighter fleets. Under the FCAS umbrella, it is hoped that NGWS will build not only the Continent’s first indigenous stealth fighter but also a sixth-generation fighter. NGWS will also develop drones to complement the new fighter, which will be networked with other systems on the ground, at sea, in the air and in cyberspace.
NEW DRONES TAKE FLIGHT: Turkish aerospace firm Bayraktar announced the first successful flight of its TB3 drone, notable for its planned application on aircraft carriers.
Short-lived Ukrainian stardom: Ukraine used Bayraktar’s relatively inexpensive drones effectively for reconnaissance, surveillance, and strikes during the early days of the Russian invasion. They have since become less useful, however, in the face of Russia’s concerted air defense.
Making do without the F-35: Turkey would like to use the TB3 on its amphibious assault ships instead of the U.S.-made F-35 fighters it didn’t get after acquiring Russia’s S-400 air defense system.
**On November 21, POLITICO Live will host its Defense Launch event to discuss Europe’s defense policy and the increasingly important roles played by NATO and the European Union. Join us onsite and hear from our speakers!**
MORE AIR DEFENSES: Ukraine has received its third IRIS-T SLM air defense system from Germany, Berlin announced; the delivery included three launchers, a radar sensor, a generator, an air conditioning unit, and medium-range SLM missiles.
Winter coming: Ukraine is scrambling to make its air defense umbrella as robust as possible after last year’s Russian strikes on civilian infrastructure caused widespread blackouts. Russia is thought to be preparing to unleash more attacks this winter.
ISRAELI MISSILES: In case you missed it last week, the Czech Republic plans to buy 48 I-Derby long range air-to-air missiles from Israel’s Rafael, according to AFP.
DEETS ON SAFRAN’S ARMENIAN CONTRACT: After the French armed forces ministry announced last week that Safran had sold night-vision goggles to Armenia, the company told Morning Defense that the products in question are optronic devices, which combine optics and electronics to identify threats from “a very important security distance.” Still no details on amounts or costs.
More: Safran also announced last week that its third-quarter revenues came to €5.8 billion, a 20 percent increase on the same period last year.
**Playbook is going Global! Never miss a beat on the global events shaping power, politics and policy with our latest newsletter, POLITICO Global Playbook. Get your VIP pass to the world’s most influential gatherings today. Register here.**
NAVAL DRONES: Fincantieri and Leonardo are teaming up to develop underwater drones. Recent damage to the Balticconnector gas pipeline has highlighted the importance of protecting critical deep-sea infrastructure.
QUICK HIT: Italy is readying a quick sale of patrol ships to Indonesia amid fears over China, Defense News reports.
FROM A NATO BASE IN LATVIA: A 5G NATO operational experiment at the Ādaži military base in Latvia showed some of the the alliance’s cutting edge tech including quantum-safe chats, GPS-free drones and rescue robot dogs. My colleague Antoaneta Roussi was on the ground.
What’s the deal? The 5G test site is under NATO’s Defense Innovation Accelerator for the North Atlantic (DIANA) program. In August, Latvia’s defense ministry and NATO Joint Forces in Europe signed an agreement giving NATO members access.
The camp, a 30-minute drive from Riga’s city center, looks like a large university campus — central canteen, cafe, dormitories, tree-lined streets — but instead of students, soldiers walk around in camouflage and tanks are parked in front of the expo hangar.
Under development: Navigational drones which don’t need GPS (networks are often jammed on the battlefield as part of cyber warfare). One company, inspired by Ukraine, created a drone that can continue flying even during network failure, with imaging software and a compass that can geolocate its route, until it reconnects to GPS.
Remote ultrasound is already being used by the German navy. It allows an officer on a ship to communicate directly with a medical professional to verify whether a wounded sailor has internal bleeding. Or the Boston Dynamics robot dog that can be sent onto the battlefield to assess a soldier’s injuries.
Never before have civilian technologies been applied to the military the way they are today, said Warren Low, the organizer of the event from NATO.
“The internet was created by the military but that was the past” when the military led the way in innovation, he told Antoaneta. That’s “now flipped around where the industry and the commercial are the ones innovating. Look at Elon Musk, launching these thousands of satellites into orbit [Starlink] … by adapting those civilian technologies, we can accelerate innovation.”
NATO: In an interview with national radio on Saturday, Dutch Prime Minister Mark Rutte wouldn’t rule out becoming the next secretary general of the NATO military alliance.
THANKS TO: Jan Cienski and Zoya Sheftalovich.
**A message from ASD: Russia’s invasion of Ukraine has prompted most European countries to significantly increase their defence budgets and urgently address long-standing capability gaps. This is the time for Europe to bolster its defence industrial base, in particular through expanding cooperative development and procurement. However, European cooperative development programmes are only viable if a critical mass of countries join, bolstering both the development funding and the assured customer base. In some cases, purchasing non-European equipment also risks wasting R&D investments already made in Europe. The European Union should therefore put in place a comprehensive strategy to support the EDTIB. This should encompass policy instruments and financial incentives that are sufficiently compelling to convince EU Member States that the merits of cooperation and of European choices outweigh the perceived benefits of third country off-the-shelf procurement. Learn more in our ASD paper.**
