The EU is inching towards an agreement on the conditions under which third countries will be allowed to participate in the bloc’s military projects, which would allow US and UK companies to take part in joint defence projects, potentially removing a source of friction in transatlantic ties.

Although member states have been working for months on a compromise to allow non-EU countries to join the EU’s Permanent Structured Cooperation (PESCO) framework – which aims to deepen defence cooperation among EU member states and pool and share scarce defence resources across the bloc – they have so far been unable to break the stalemate.

Together with the European Commission’s new €13 billion European Defence Fund (EDF), meant to partly fund PESCO projects in the future, the new EU programmes aim to address the problem of financial inefficiency caused by the lack of adequate defence cooperation across the bloc.

But the creation of PESCO and the EDF was primarily about the protection of the European defence industry, while concerns have been raised about the exclusivity of non-EU defence industries.

The Trump administration has repeatedly warned the EU about discriminating against US defence companies, most recently in May voicing “deep concern” about the programs’ conditionality and risk of shutting out American defence companies from European projects and simultaneously accusing the block of undermining NATO cooperation.

US officials had been particularly critical of both frameworks, as they worried that the programs could lead towards more ambitious European defence cooperation in the future, and rules currently agreed set a precedent for market restrictions.

Although France and Germany have rejected those arguments, EU officials are on the defensive over accusations that Europe is in the process of creating an industrial ‘Fortress Europe’.

“There are no plans for any ‘Buy European’ act,” Arnout Molenaar, head of security policy at the European External Action Service (EEAS), told a defence conference in Brussels in October.

This, and the prospect of Britain leaving the bloc by 31 January, has added fuel to the discussion and concerned some EU member states with close military ties to the US and the UK.

EU sets conditions

A five-page document proposed by the Finish Presidency and seen by EURACTIV earlier this week appears to respond to member states concerns, spelling out a series of conditions for non-EU countries to take part in a PESCO project.

According to the proposed rulebook, a non-EU country also can only join an EU military project when their participation is deemed to add “substantial value” and “its participation does not lead to dependencies on that third state.”

The so-called third state would have to submit a request to the lead country in one of the so far 34 launched PESCO projects and would need unanimous approval from all member states involved.

Its participation, however, can be “reassessed” and terminated by the Council when one or more member states have substantiated concerns the country breaches the conditions for participation. If such eventuality happens, both Council and the EU’s foreign policy chief will “seek adequate solutions within a period of two months,” the draft text states.

However, the conditions on the table state that only countries can be considered for participation in the EU’s military projects which also “share the values on which the EU is founded” – a reference to the Treaty on the European Union article which lists values such as respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights.

The proposed terms would exclude China and probably Turkey but would pave the way for the UK and the US to join, potentially removing a source of friction in transatlantic ties.

Non-EU states will have no say on how the EU will use the capabilities and the systems developed, according to the draft under discussion.

“All member states, however, understand that third country participation has to take into account the security concerns of all member states,” a senior EU official told reporters on Thursday.

It is unclear whether a decision can be expected during the EU foreign and defence ministers meeting in Brussels next week, EU diplomats said after EU ambassadors failed to agree on a draft decision on Wednesday (5 November), as the current text is “a compromise of a compromise” and some national grievances would remain.

Several EU members states had voiced concerns that extending involvement to non-EU member states would leave the door open for China and Turkey to get involved in sensitive EU security projects.

According to an EU diplomat, Cyprus and Greece are hesitant to agree due to their tensions with Ankara, while France would be reluctant “for obvious reasons”.

“We need a decision that is workable for third countries and the possibility kept open for them to join PESCO in some projects where the technical and industrial expertise is needed from non-EU states,” another EU diplomat told reporters in Brussels.

More PESCO projects in the loop

EU foreign and defence minister on Tuesday (12 November) are also set to agree a third wave of 13 new PESCO projects, additionally to the already agreed 34 military projects under development.

According to EU sources, the new wave of military projects includes a large number of training projects in the field of cybersecurity or space and is marked by a very strong trend in high technology development. A detailed list will be presented upon signature on Tuesday.

Contrary to the first two project runs, there is more multinational participation and a strong presence of Southern and Eastern European countries.

[Edited by Benjamin Fox]