German Media: Inefficient Arms Procurement in EU Countries

According to a report by Reference News Network on September 6, the German "Business Daily" reported on September 3 that the European Court of Auditors urged Europe to strengthen coordination in arms procurement to avoid waste of funds and duplicate purchases. The agency, located in Luxembourg, pointed out in a report released on the 3rd that despite record investment levels by member states and ambitious related plans, achieving "defense readiness" by 2030 remains a significant challenge for Europe.

At the same time, the European Court of Auditors warned that reliance on debt to expand military capabilities could "undermine the long-term sustainability of public finances." Driven by the Russia-Ukraine conflict, defense spending by EU member states is expected to rise to €418 billion from 2020 to 2025, an increase of about 79%. This year, it is expected to further increase to €454 billion.

Even so, Europe has yet to address critical capability gaps and still relies on American allies in areas such as satellite reconnaissance and communication, medium-range weapons, and strategic airlift.

According to reports, the European Court of Auditors stated in the report that it would be wise for the EU to "adopt a top-down planning process" to fill the gaps and achieve defense readiness; however, the current planning largely still follows the path of "each country assessing its own needs." This has perpetuated the severely fragmented state of the European military system.

On one hand, there are some coordinated initiatives in the arms procurement field, such as cooperation under the "European Sky Shield Initiative." During the period from 2021 to 2027, the European Defense Fund can mobilize over €7 billion for multilateral R&D projects in the arms sector. However, joint development initiatives like the Franco-German fighter jet project "Future Combat Air System" have encountered astonishing failures. The "Main Ground Combat System" tank project agreed upon by the two countries also has an unclear outlook.

The European Court of Auditors warned that if coordination in the defense sector cannot be strengthened, member states will compete with each other for scarce raw materials, critical components, production capacity, and qualified personnel.

Reports indicate that the criticism is not only coming from the European Court of Auditors. The Kiel Institute for the World Economy has also criticized that although Europe’s spending in the arms sector last year was second only to the United States, its military capabilities still only correspond to a small fraction of other major powers.

This is partly due to the "obvious inefficiencies" that still exist in the European defense sector, such as simultaneously deploying 14 different models of main battle tanks and 23 different types of howitzers. According to statistics from the European Court of Auditors, in 2021, only about 18% of defense equipment among EU member states was completed through joint procurement; and only 7% of R&D spending in the defense sector was classified as joint expenditure.

Therefore, analysts advocate for the establishment of a European common arms market and a common financing mechanism, including euro bonds. The Kiel Institute for the World Economy stated in an analysis report released in March that Europe must focus more on "ensuring that every euro spent on defense yields the maximum military value."

However, the European Court of Auditors also pointed out the risks involved. The report stated: "Increasing reliance on loans to finance defense spending, as well as increasing dependence on EU-guaranteed loans, may delay the process of reducing public debt and put pressure on the EU budget, thereby undermining the sustainability of public finances." (Translated by Wang Ziqiang)