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September 13, 2011 |  3 comments |  Print  Your Opinion  

The Impact of the Financial Crisis on European Defense

Christian Mölling: Europe’s defense policy has reached a pivotal moment: states can either initiate comprehensive defense sector reform through the EU, or compromise their security long-term. Europe must link its national military capabilities to improve efficiency and stave off collective security decline.

Two problems currently collide in European defense policy: an inefficient capability generation mechanism and the repercussions of the financial crisis. Now, as early as two years after the global meltdown, repercussions are starting to crystallize at a rapid pace.

The United Kingdom and Germany have already lowered their levels of ambition, while France - making up the trio of biggest European troop providers - is about to follow suit. At the same time, the defense sector needs to prepare to run under budget constraints for 20 years to come. This will lead to massive restructuring of both the armed forces and the military-industrial complex. Even now, a first gap is widening between those states which continue to modernize their armed forces, if only at a slackening pace, and those which had to put their army reform plans on hold. This development implies that many states might no longer be able to contribute to common operations within an EU or NATO framework. This military incapacity will likewise restrain their capacity to shape security policy.

European states are at a crossroads concerning their military capacity to act and the underlying defense industrial technological base - and the direction they will take remains unclear. The financial crisis only amplifies the creeping loss of military capability of the last decades, and the Europeans are quickly running out of time. Austerity budgets have disclosed inefficiencies in the defense sector and have already claimed painful cuts. However, as these are implemented in an individual and successive manner, they don't lead to a "big bang" of capability losses, but rather to a slow and silent death of European defense capability.

Still, the European countries seem to deny this emerging dynamic and the resulting dramatic long-term consequences for European defense. They react only to short-term savings requirements according to traditional patterns, that is, reducing and reforming military capabilities without consulting their allies, following a purely national rationale. Until now, no effective coordination of national reforms tackles the foreseeable long-term damage to the European capacity to act militarily.

It is still not clear whether recent initiatives in the field of "pooling and sharing" will be able to take remediate action or whether they will lead to even more fragmentation and duplication in European defense. The ongoing debate about common efforts in pooling military capabilities and sharing tasks and equipment creates, first and foremost, political awareness. But this by itself will not suffice to uphold European defense capability. Instead, those defense cooperation structures already existing show a rather complex set of conditions for success. They span from similar strategic cultures and pre-existing structures of political cooperation, to trust and similar conditions for defense industries.

Europe is losing its capacity to defend itself. The recent intervention in Libya illustrated that in the future, the United States will be far less available for intervention in security issues that are predominantly European business. At the same time, the EU's dependency on US support has increased rather than declined, despite declarations to the contrary. Neither individual states on their own nor the European states as a community can guarantee their security, let alone project military power over a distance of merely 1000 kilometers.

If Europe wants to limit the current loss of its defense capability and keep the capacity to rebuild it, Europeans need to develop a comprehensive defense sector strategy. The key would be to develop a coherent linkage of military capability generation to the defense industrial and technological base, because: whatever you develop and build jointly, you can easily buy, operate and fight with jointly.

First of all, Europe will have to assess what it can still deliver militarily, if this is sufficient in light of foreseeable threats and risks and how it can sustain this capacity to act in the long run by means of a targeted defense industrial policy. Short-term cost-saving effects are scarcely to be expected. Instead, as transformation into more efficient defense economic modes come to a certain price, the thorny issue of investments in times of austerity is back on the table.

The EU offers the appropriate framework for the upcoming defense sector reform. Besides sufficient military expertise, only the Union holds means of control over the civilian sphere of industrial, technological, regulatory and structural policies. All of these areas need to be involved and coordinated in order to achieve a fundamental transformation of the defense sector.

The alternative would be, within only a few years, losing the capacity to defend Europe in the long-term. Europe would have to accept greater risks and abstain from asserting Europe's own interests with means beyond diplomacy. At the same time, defense cooperation is becoming increasingly difficult because the ultimate subjects of cooperation - forces, equipment, operations - are lacking. This also undermines the mutually reinsuring function of defense cooperation. Moreover, if European states can no longer comply with the reinsurances they gave one another, NATO and the EU could be affected by this centrifugal force. The costs of increasing European insecurity, not only by higher external risks but also vis-à-vis each other, might be bigger than the required investments into a more efficient European defense.

Christian Mölling is a Research Fellow at the German Institute for International and Security Affairs in Berlin. He is co-author of an in-depth study on this topic called "The Impact of the Financial Crisis on European Defence".  

Related articles from Atlantic Community's "Security Despite Austerity" theme week:

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I like this Article! What's this?

Unregistered User

September 14, 2011

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I like this comment! What's this?
As a start allow me to offer our proposal on Greece:
Greece's debt level is of self destructing nature. Greece should stay in the EU,
but opt out of the Euro-Zone and return to the Drachma.
As to debt correction, we offered in the past for CC-Countries (capital capable- sovereign) especially outside the EU to assist in direct Bond purchases from Greece and with that stimulate an economic recovery.
The EU for defense purposes cannot be a club of debtor and creditor countries within the Euro-Zone. Economic health has priority over military initiatives, unless the end-game is
something like WW III.
The defense structure and strategies for Europe, which also includes NATO, are not economically sound ( wasteful)and utterly confusing, completely ignoring changing dynamics in modern warfare, world economics and still consider Russia, despite all the overtures, as bogeyman par excellence.
One could consider EU military as " Verlegenheitssoldaten", because , as Libya showed,
for high tech hardware, they have to call on other countries' military industrial complex.
Europe is made of exporting nations and cannot have an lopsided attitude with
preferential politics.
In addition, NATO is a non-state actor, draws troops from EU partners and
is financed through the EU, in addition to the US and Canada, but guided by whose
EU needs a reality check and shouldn't hesitate to look for those, whose intentions are to marginalize the Union.

Tags: | tx /EU/NATO/ |
William C. Fleeson

September 20, 2011

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I agree with the author, on the whole. If the Libya intervention is anything to go by, the European-led operations depended heavily on U.S.-designed and funded military logistics and materiel. European forces continue to rely on U.S. leadership, even if Obama's leading from behind" doctrine would seem to be vindicated in Libya.

Europe depending on U.S. defense capacity, the U.S. backing away from global military leadership... This could spell trouble ahead.
Amrit Deecke Naresh

September 23, 2011

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Dear Hans Reuther-Fix, thank you very much for your comment! All I would ask now is that you register as a member of It's free and takes just a few seconds - literally - and will enrich the debates held on

Simply fill in the required fields here:

We would like to include some of the recommendations you made in your comments on our "Security Despite Austerity" theme week in our Atlantic Memo, an executive summary of the best ideas in the Atlantic Community. The Atlantic Memo is sent to policy makers in national governments and at NATO, and is a wonderful opportunity for YOU to influence European defense policy. However, to include you in the Atlantic Memo, you would first need to register as a member of It would be a shame not include you in the Memo simply because you are not a registered member.

Your membership will make the Atlantic Community an even stronger policy network than it is today. We look forward to seeing you on our members list!

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