Strategic autonomy and security of supply in European Defence

With the 24th of February Europe and the world entered a new era. While we were considering the various security crisis of the last two decades – Georgia 2008, Syria 2011, Libya 2011 to name but a few – wake-up calls, the illegal Russian invasion to Ukraine can only be described as a wake-up blow. There can be no other answer than to boost European defence and our efforts for achieving a fully-fledged European Defence Union.

The concept of strategic autonomy can be considered as guiding principle to that end as it states the European Union should be able to act autonomously in protection of its own security if necessary. This political ambition entails two dimensions: Firstly, it requires that the EU possesses the necessary capabilities, institutional structures and procedures. Secondly, provision of the needed capabilities requires at the same time a capable European defence industry, often referred to as the European Defence Technological and Industrial Base (EDTIB). To perform this task, the EDTIB is not only dependent on demand, supportive political conditions, especially on the European level, but also on reliable and secure supply chains on the European continent as well as globally.

The COVID-19 pandemic illustrated Europe’s dependency on global supply chains, most visible with regard to semiconductors in the automotive sector. This technology is not only crucial for the future economic development in general, especially in the field of digitalisation, but also for European defence.

Considering that only four out of the top 35 global manufacturers are located in Europe and Europe accounting for about 9% of global production, the high degree of dependencies becomes obvious. We can observe a similar situation when it comes to the so-called “critical raw materials” (CRM) that are essential for modern defence technologies but also for the political ambition of European climate neutrality by 2050. Important dependencies on these materials, e.g. for cobalt which is used in jet engines, are higher than 80%. Therefore, strengthening and securing supply chains as well as reducing dependencies in these areas are political top priority.

European efforts with regard to security of supply in the defence sector mostly focused on the coordination and mutual support of EU Member States within the single market. Starting with a framework agreement endorsed by the Steering Board of the European Defence Agency in 2007, the European Council in December 2013 in its conclusion underlined the need for intensified cooperation within the single market. That paved the way for the adoption of a political commitment to mutual support between EU Member States in 2017. While EU efforts in strengthening the EDTIB, most notably the European Defence Fund, also contribute to increased security of supply within the EU, the global dependencies demand for further action. The current discussions around the Strategic Compass already raised further awareness to the issue that will hopefully lead to additional political initiatives.

Decreasing European dependencies and securing global supply chains requires mainly a threefold approach: diversifying supply, increasing domestic supply and further developing a circular economy which enables recycling and re-use of raw materials.

With regard to CRM, in 2020 the Commission presented an action plan that addresses these areas and formulates ten policy initiatives to be implemented by 2025, inter alia developing strategic partnerships with resource-rich countries. In reference to the CRM action plan, the 2021 action plan on Synergies between civil, defence and space industries also highlights the importance of security of supply of CRMs. Furthermore, in its report on a European strategy for CRM in November 2021, the European Parliament called for the set-up of a so-called “Important Project of Common European Interest” (IPCEI) to address CRM supply and sustainable.

In the field of semiconductors such an IPCEI has been launched in December 2021, currently awaiting assessment of the EU Commission. Coordinated by Germany, the IPCEI brings together 20 EU Member States and 90 companies in 32 projects with a budget of 10bn. € intending to strengthen European capacities in that sector along the whole values chain.

This initiative gave also impetus to the recently presented European Chips Act that intends to double EU’s market share to 20% in 2030 by mobilising a total of 43bn. € of public and private funds in order to increase EU’s capacities form research to manufacturing of semiconductors. It also addresses the supply chain aspects by proposing a supply chain monitoring and crisis mechanism as well as partnerships with like-minded countries such as the US, South Korea and Taiwan. Especially, South Korea and Taiwan as the world’s leading developers and supplier play a significant role as partners for the EU. Therefore, the recently announced cooperation of Taiwan and Lithuania that also covers semiconductors is an important step that could provide a model for the whole EU.

As the aforementioned illustrates, the EU learned its lesson from the pandemic that shed a light on our vulnerabilities with regard to security of supply. In light of the Russian aggression against Ukraine but also with regard to the general security challenges, drawing the right conclusions and taking effective action, especially in the field of security and defence, is imperative to improve our strategic autonomy.

To that end, we need to strengthen our domestic industry capacities, in key technology sectors like semiconductors as well as in security and defence in general, and to forge strong partnerships with like-minded countries.