Check against delivery! 

Thank you very much for being here, all of you – Ministers, Generals, Ambassadors. 

This is a very important day and, in particular, for me. In my agenda, it is one of the most important days of the year. So, [I am] happy to see here many of you in person at this European Defence Agency’s Annual Conference.  

The European Defence Agency is a very important body inside the institutional structure of the European Union. But maybe, it is not known well enough. 

Today is a good day for us, dear [EDA Chief Executive, Jiří Šedivý], to make people understand what the European Defence Agency (EDA) is, what we are doing and what we should do - still more.  

It is good to see here representatives of the Member States, European Union institutions, military and security organisations, academia, think tanks, industry – most importantly industry - and media. 

We wanted to call all of you to come to these European Defence days because today is also the day in which we are presenting the annual defence data that the [European] Defence Agency produces. 

This document is being presented today, and it is the best information that you may have about what it is the effort that Europeans, people and army, are doing on their defence. I think it is very important that this data goes to the public opinion, goes to the institutions – because, sometimes, not even the institutions know what do we do. Sometimes, there have been Heads of State and Government asking for data. Well, this data [is] in our reports. It means that we have to do a bigger effort in order to disseminate this data and our work. 

Dear friends and colleagues, last year at this [EDA Annual] Conference, when I intervened, I said: “we are on the return of power politics”. Since then, the world has dramatically changed. Yes, the return of power politics tragically has come sooner than expected. The return of power politics has escalated into what we are witnessing in our borders: a large-scale open war.

Not a low intensity war, hybrid war, fighting against terrorism – like in the Sahel and in other places – but a conventional war, like the ones one we were watching in the films about the Second World War. We could not expect war to come back to our borders.

Before the war started, in January, when the drums of war were already sounding, I visited the frontline in Donbass - the line of contact in Donbass. It was in early January [2022], about 5 weeks before the start of the war. I remember that after my visit, I had a meeting with the Ukrainian Prime Minister [Denys Shmyhal]. He was already convinced that Russia was going to attack. He told me: “Look, I know that when the Russians will attack us, will invade us, you are not going to come to support us with your troops. We do not expect European soldiers to come and to fight on our side. But at least, we would like you to support us militarily and to provide [us] with the arms we need to defend ourselves.” It was a dramatic request coming from someone who was already convinced that in some days, their people will be fighting, and their country [will be] bombed. 

So, I tried to convince him that yes, the Europeans would be supporting them as we are have been doing. Later in April [2022], I went back to Ukraine and I visited the quarters in the outskirts of Kyiv and, then, one could see the war and the horrors of war. All wars are horrible but when you see that closely, you perceive how dramatic is this situation.  

Now, 10 months after the Russian invasion of Ukraine, what do we see? We see that Russia is systematically bombing any critical infrastructure. They cannot conquer the territory – they tried, [but] they were rejected, they were stopped. And now they are just destroying the country, systematically bombing anything that can work – mainly electricity and water supplies.

They want to throw millions of people into the cold and darkness. This systematic bombing of critical infrastructures can be conceived as a war crime because it is against the civilian population, it is not fighting against the other army. It is willing to put a country on their knees, breaking their morale and their capacity to survive.

[Under] these conditions, the Europeans have to continue supporting Ukraine. Our priority remains to support Ukraine: with arms, with ammunitions, with training for the Ukrainian soldiers, with a military and a financial support. I know that in the public opinion in Europe, there are people that say that “the longer you support Ukraine, the longer will last the war. So, if you want to stop the war, stop supporting Ukraine”. Certainly, but how will it finish? That is the important question: how will it finish?  

This war cannot finish with a victory of Russia, occupying Ukraine, and making Ukraine a country like Belarus. So, we have to continue supporting them to defend themselves.  

Last week, I visited our military assistance mission, the EUMAM [for Ukraine], in Polish territories and I could hear first-hand the stories of Ukrainian soldiers, who were there to be trained before going back to Ukraine to fight.  

They are fighting for the survival of their country, but we used to say that they also fight for what we do represent from the point of view of values and security. If this is true – and I believe it is true – then the least that we can do is to support them with military equipment and training. This is what we are doing and that is what I think we have to continue doing. 

Why [does] today the work of the European Defence Agency catch more attention from the public opinion, from the media, from everybody? Why? Because there is a war. Because we talk not in theoretical terms of something that it is not happening. This war against Ukraine has been a brutal wake up for many of us, for all of us. Certainly, it has been a wake up.  

We realised that our militaries stockpiles have been quickly depleted due to years of under-investment. May I say that? I know that public opinion prefers butter to cannons – certainly – but for years, we have been under-investing. And this has made that our stockpiles have been quickly depleted due to the fact that we are providing them to Ukraine. When we provide military support to Ukraine, this military support does not come from factories, it comes from the stock – the army stocks. Everybody agrees that these stockpiles have been quickly depleted because they were almost empty. 

Second, we realised that we lack critical defence capabilities. We lack the capabilities that we need to defend ourselves, to defend [ourselves] from a higher level of threats. The defence capabilities depend on the level of threats: the higher the level of threats, the bigger the defence capabilities you need. 

And now, according to the challenges and threats that we are facing, we realised that we lack critical defence capabilities. So, in front of that, the good news is that Europeans, Europe, European Member States – because defence remains a competence of Member States, we do not have an army in Brussels – spend more on defence. That is also something that our data, today, reflects and explains.  

How do we know that we spend more and even better? We spend more [and] to a certain point, we spend better. How do we know? 

We know thanks to this report. We know thanks to the work of the [European Defence] Agency [which] has been putting together every year all the data available about how much and on how the Europeans spend their money on securing defence.  

Today, this release of the European Defence report - [all of] you will receive a copy – presents some facts and figures that, I think, the Europeans have to know. The European public opinion has to know – for the good or for the bad, to feed the political debate, but a political debate based on facts, not based on speculations. Let’s see what is happening, let’s see where we are, and discuss where we want to go or not. 

I think that the first figure, which I have to present to you, is how much Europeans spend on their defence.  

According to this data, last year, the defence spending in Europe reached €214 billion, with a 6% increase with respect to the previous year. I hope everybody is able to have a look at the graph. And you see that, since 2014, we started spending more on defence. And now, we are well above the figure of 2008.  

But it is clear that this amount – this relationship along the time of our defence expenditure – has to, first, be referred in terms of custom prices and, [second], has to be understood. Because if you have a look at how much it means in terms of Gross Domestic Product (GDP), everything is relative. In terms of GDP, on average, this figure represents 1.5%, not 2%. We are at 1.5%.  

And it is not equally distributed among Member States. Some Member States have increased their defence expenditure by 20%, and in some cases by 40% [42%]. Some Member States have increased their [defence expenditure] by 40%. Others, 20%. On average, 6%. But it is a 6% increase on average, so it means that, yes, we are increasing our defence capabilities measured as financial expenditure. 

Military staff know very well that money is [does] not exactly [give] a good picture. You have to understand on what this money is being spent. If you increase the pensions of the retired military, certainly, it is being computed as military expenditure, but it does not increase a lot the military capabilities, for example.  

So, on what do we spend? And the important thing is: do we spend more on defence capabilities, on investment? Yes, we spend more on investment, much more.  

The total expenditure on defence [investments] reached €52 billion which is 24% of the total [defence] expenditure. So, one out of four euros goes to new capabilities. And it is increasing very quickly. 

For the third year in a row, we collectively met and exceeded the 20% [agreed] benchmark. It is important to know that. We wanted to spend 20% on our capabilities and we are above that.  

19 Member States have reached the benchmark of 20% of expenditure on capabilities. And it is the highest number since the European Defence Agency started collecting data, and 5 more Member States than last year [in 2020]. So, things are improving: not only we spend more, but we spend better because we spend more on capabilities - new capabilities -, on investment which is demand to the defence industry. And more Member States are above the 20% benchmark. 

Let’s have a look at how much we spend on research and technology, which is also another important thing.  

There, the news are good because we see a record [spending] on [Defence] Research & Technology, very quickly increasing to €3.6 billion – 40% [41%] more than last year, three times more than in 2016.  

Our Research and [Technology expenditure] on defence went through such low levels. Look at how much it has decreased [from] the beginning of the [2008] financial crisis to 2014. This was really very bad. Now, we are waking up and, in the last years, for three years in a row, [Defence Research & Technology expenditure] it is increasing – and it is good. 

The only thing that is not so good is defence cooperation – how much we spend together. There, the picture is less good because [on] what we can [call] “collaborative procurement” - Member States going together to increase their capacities - was almost €8 billion. It is only 18% of the total [spending in] equipment procurement and we have a benchmark of 35%. We want to be at 35%, we are still at 18%. Better than last year? Yes, better, but still not good. 35% is a very modest objective, a very modest benchmark and we are far from getting it.  

So, what do these figures tell us? What is the “résumé” [conclusion/summary] of all of that? We are doing better but not enough, especially regarding cooperation. 

So, what do we have to do?  

Well, first, we need to address the short term needs by investing and procuring jointly. Buy more together. Buy more and buy more together. 

10 months after the war, the support to Ukraine have exposed that our stockpiles were fragile and inadequate and [that] our supply chains [were] not good enough.  

In May, we presented a Defence investment gaps analysis, together with the [European] Commission. And we launched this Joint Procurement Task Force – together with the Commission and the [European] External Action Service (EEAS) - that has been working with Member States to aggregate their needs, identify realistic opportunities for joint procurement for both ammunitions and equipment.

Now, we are in a new phase. Together with my fellow Commissioner and good friend, Thierry Breton, in charge of pushing for the defence industry, we have reached out to many of you, the defence industry, asking to the relevant companies to provide information on their production capacity. We did the same thing with the vaccines, months ago. Now, we are asking about the industrial capacity of our defence sector, how much [you] can produce.  

Because we know that we have to help you. We have to help the defence industry to ramp up, to increase your production capacity. And, in fact, the Commission, who has the money, has proposed a new [EU] Instrument to facilitate and to incentivise joint procurement [the European Defence Industry Reinforcement through common procurement act, EDIRPA]. €500 million [for 2022-24]: you will tell me it is not much. Well, it is a starting point. €500 million to incentivise that the European armies go together to the market and make a joint request, a joint demand for the industry to be able to serve a bigger demand and more unified demand.  

I think that there are very much concrete intentions by some Member States to participate in these joint procurements, but these intentions have to be translated quickly into acquisition orders, sooner rather than later. 

I want to tell everybody that the European Defence Agency stands ready to support this procurement and act as a contracting agent, if Member States request it. We have the legal basis, and we have the experience to do so.  

So, let’s go quicker to refill our stocks.  

Beyond Ukraine and beyond the urgent needs, we must look ahead and face up to the future threats.  

We have said it many times before, and I want to repeat: Europe has to take more responsibility for its own security. Yes, certainly inside NATO - there is no alternative to NATO for the territorial defence of Europe. But Europeans need to take more responsibility for their own security. 

The first thing to do that is to cooperate more among ourselves, trying to build together the defence capabilities that we need. 

For that, we have another tool that the [European Defence] Agency produces: the Coordinated Annual Review on Defence (CARD) - which I would like it to be know by everybody, CARD. A Coordinated Annual Review on Defence that shows that defence cooperation remains the exception rather than the rule.  

When less than 20% of all investment in defence programmes is conducted in cooperation, we have to say: it is not a good way of spending European money. We have to increase our expenditure, and this increase should be done more in a cooperative manner.

Member States should design their national plans with a European Union outlook, and they must systematically plan and develop capabilities in cooperation. This will be good for the industry, and this will be good for the taxpayers. 

This instrument, CARD, can help a lot. It is not only the map of the current European Union defence landscape, [but] it [also] identifies where collaborative opportunities are. And we have identified more than 100 collaborative opportunities for the European defence capabilities to increase, and they cover all domains.

And that is why we have the Permanent Structured Cooperation (PESCO) and the European Defence Fund (EDF) which are other key EU initiatives to foster cooperation. From the European Union budget, the Commission – and I want to [recall] that I am not only the High Representative for Foreign Affairs and Security Policy, but also Vice-President of the Commission - has awarded €1.2 billion to a first batch of 61 projects under the European Defence Fund which is being managed by Commissioner [for Internal Market, Thierry] Breton in strong cooperation with the European Defence Agency. €1.2 billion for a first batch of 61 projects that will be supported by the European Defence Fund. All of them are devoted to collaborative projects. 

Among them: next generation of fighter aircraft, armoured vehicles and ships, and critical defence technologies in the areas of space, cyber, military cloud or Artificial Intelligence.  

Dear friends, you have heard me compare the European armies to Japanese miniature trees. We have 27 European armies. We do not have a European army, we have 27 European armies. After the Cold War, we shrunk our forces to small size armies without any coordination.

We reduced expenditure without any kind of coordination among us. We wanted to take the dividends of peace and we got them through lower cost of energy – that [has] finished -, and we got them through a lower defence expenditure – that [has] finished. 

We touched the dividend of peace and it was good, but now we have to face a completely different situation. And to face this situation, we should not repeat the same mistakes of the past.  

We are now turning. Do you see how much we shrunk the defence expenditure capabilities to this lower point? Then, we increased, and we have to continue increasing because first we have to repair the past, we have to recover the big gap. The surface above this hole. In mathematical terms, the integral of expenditure through times. We have to recover the surface that we lost, repair the past and then we have to win the future. 

If we follow the red-dotted line, we will only repair the past. We have to follow the other [steeper] line. We have to repair the past and we have to win the future. We have to compensate years of under-spending and we have to be able to shift from repairing the past and start winning the future. 

Now, [to do] that, I am going to say a figure which I would like to be part of our defence debate. [To do] that, the total expenditure that Member States have announced will grow by €70 billion until 2025. Every time that you say a figure with expenditure, you have to say when. It does not matter how much – well, it matters, but the important thing is how much and when. €70 [billion] in 10 years is a different thing than €70 [billion] in 3 years. Well, let’s put the time schedule: €70 billion more in three years is the commitment of the Member States to increase their capacities.  

To convert money [into] military capabilities is not so easy: people do not fight with bank notes, people fight with military capabilities produced by the industry with the more modern and better technologies. Between financial support and military capabilities, there is a lot of work to be done by the industry and by our military staff – to say what we need and to produce it, and to have it [be] operational.  

This is going to be a challenge: to spend in three years €70 billion more in order to win the future, to spend this money in a coordinated manner is going to be a real challenge.  

If our national decisions are only focusing on the present needs and relying on off-the-shelf acquisitions, then it would be, again, a fragmented European Union capability landscape. We see that clearly: we have a fragmented capability landscape. I do not want to show you, once again, this figure where you see the number of tanks compared with the number of tanks the United States has. This figure, everybody has seen it many times. In the times of my predecessor, it was already shown to everybody.  

Have we improved these fragmented capabilities landscape? We need to find the right balance between repairing the past, responding to the present needs and also prepare for the future. This is what we have to do. 

I am very happy to have the opportunity to present this document – this important document –, to present this debate that I would like the European society to take it as one of the defining decisions of their future. I want to send a message which is quite simple: we are facing real threats, like it or not.

We would prefer not to have to face them, but they are [there]. We do not want them, but they are [there]. Like it or not, we are facing threats, real threats, [which are] close by and likely to get worse. 

I do not want to be Cassandra, announcing bad news, but this is the reality. 

Everything is in place for defence cooperation: the ideas, the money, the European Union’s frameworks, and the European Defence Agency itself as the prime forum for defence cooperation.  

I think that we have a unique opportunity to make a step change in how we invest in defence, and you are the actors of this step: the military, the institutions, the industry, the political decision makers, [and] the media. 

To me, the choice is obvious: we must cooperate more. The European armies have to cooperate more among [themselves]. 

We need to continue supporting Ukraine. We need to continue to address present needs, and to start preparing for the future. 

Thank you very much for your participation in this important task and thank you very much for your attention. 

Link to the video (starting at 8:07): https://audiovisual.ec.europa.eu/en/video/I-234473