Graham has told us where we are now as a result of all the detailed staff work that has been going on post Helsinki. Many of you will know that I have been arguing for the past 3 years that our only hope for a useful defence capability in the long term is by moving towards operating at the regional level rather than at the national level. I am therefore delighted that we have the military working so closely together throughout the EU on providing a real capability. But as Graham has said, there is much still to do, and this is not the first time that such efforts have been made.
At one level, this is a sensible attempt to make some progress in harmonising defence effort across the EU so that it can at least generate a useful force of 60,000 men out of its 2 million troops. It ought to give a much needed impetus for the development of some key capabilities such as intelligence and strategic airlift, altough it is not clear whether it will do so. What it does not do is generate any new resources for defence. It gives free-rider nations an opportunity to run their defence forces down further by concentrating only on their contribution to this new force. Years of experience at fudging goals in the NATO force planning process make me sceptical of achieving the Corps capability easily or in full. However, it does at least start putting in place some structures to look at filling in the long list of missing capabilities.
What I want to do in my remarks is to look beyond the immediate plans to the longer term. It will be good if Europe thinks a bit more deeply about its security needs, and it will be helpful to have a more ready set of forces to deploy for minor crises. This is however is not sufficient. What is needed urgently, and in parallel with the Helsinki goal work, are some practical moves to get better value from the 170 Bn Euros that EU nations waste on defence every year. In a Europe where sovereignty wasn't such a hang-up, I could imagine Javier Solana, with wise advice from George Robertson, doing a full Strategic Defence Review which ensured that European forces were structured sensibly to support European and NATO needs. As one leading defence industry man said to me, if we ran our operation the way Europe does defence, we would be bankrupt. It is ripe for rationalisation and flattening of management layers. However in the real world, this is some decades away. This is not a reason to do nothing. In NATO AWACs we have a good example of how an expensive, but important, capability can be afforded if it is operated at the supranational level. Nobody gets excited about sovereignty, and all NATO members both contribute to and benefit from this shared capability. There are many possible areas where such an approach could be used. Time will only let me give you a quick taste of some examples.
Europe needs an air transport capability. Some ten EU nations operate C130 Hercules military transport aircraft . It would be possible to imagine a pooled fleet of 70 aircraft, which would look after all the national C130 needs of Belgium, Denmark, Italy, Netherlands, Spain , Sweden and Portugal, and to which France, the UK and Greece might provide a partial contribution from their larger fleets. For those nations that were prepared to put all of their C130 fleets into a common pool, there would be significant savings in operating costs. They would also have a much better assurance of availability on a day to day basis, given the ability to plan routine servicing across a larger fleet. For Europe there would be a usable airlift capability for humanitarian operations as well as for use within NATO. This is quite different from multinational forces as it requires a single headquarters and a single support and maintenance structure. Nations would be able to close down their expensive national establishments and use the money saved to buy new capabilities. I welcome the start that is being made in this sort of pooled arrangement by Germany, working initially with the Netherlands. The promises of joint procurement of A400M are important in an industrial respect, but do not produce the efficiency of operation unless they are operated as a single fleet.
Air to air refuelling capability is also needed by all European air forces, and would be a natural candidate for a European fleet operation. There is consideration being given to procuring the UK air to air refuelling capability through a public private partnership arrangement. This would be particularly easy to enlarge to encompass those nations in Europe which sought such a facility. The economics of the operation would improve for the larger fleet and there would be no sovereignty issues to worry about given the service is being provided by the private sector. The Defence Select Committee in its Lessons of Kosovo has already reported that it seems odd that the UK is to invest so much in tanking capability, when it is already a disproportionate provider for the rest of Europe. Would it not be more sensible for Tony Blair to offer half the amount set aside in the Defence Programme as a catalyst to contributions from every other EU member towards a common European contracted capability. With the vast amount of money saved, there would be seed corn for a European SEAD capability, and some spare change for the MOD and even for the Treasury. Not only that but the contractor would have the economies of scale which would allow lower running costs to be passed on.
Five EU nations are ordering the Eurofighter for delivery from 2002 onwards. Each nation will set up its headquarters for planning and support, a training base, and a myriad of support organisations. Over a period of years, each nation will change its version of Eurofighter in different ways (just as we have seen with the Tornado). Interoperability will get worse as time goes on, unless there is common management and doctrine. This is a role for a single EU military headquarters, which would operate an EU mixed nationality Eurofighter force of perhaps 400 aircraft. If any nation still felt the need to retain some independent national capability, it could rotate crews and aircraft through the EU force on a regular basis.
In the marine environment, one could cumulate existing capacities and provide common supply services, possibly leading to a rationalisation of the number of European naval bases. Fleet auxiliaries can be envisaged as developing a common European service. An early candidate as one of the European Force Elements, would be a European mine counter measure service. The principle could be applied to larger ships. France, Italy, Spain and the United Kingdom all wish to have some aircraft carrier capability; could it be provided by a common squadron thereby providing savings in support and logistic chains, while also ensuring that a viable force was available at all times? A European led Combined Joint Task Force in the maritime environment at present lacks a satisfactory headquarters ship; one, or more, of these could be acquired on a common basis.
It would make sense to begin the approach to land forces by looking at engineers, communications, transport and medical services, which could provide the first common programmes. The wider field of logistic support could follow and an early candidate would be the development of common IT systems for logistics. The question of outsourcing logistic and support services is now under active consideration in a number of European countries. There would be economies through the working out of common specifications and the use of a limited number of common suppliers.
.Again let me make it clear that I am not talking about multinational forces - but supranational pooled forces. Whenever anyone tells you that they have a very good and productive multinational arrangement, you must ask them how many people fewer are needed as a result; how many bases were closed as a result; how many headquarters were eliminated; what are the common logistics and support arrangements. Why is this distinction important? Because the only way to get more bang for your Euro is to be more efficient. We know how to do that nationally, and for the UK have exhausted the rationalisations that are possible through successive reviews. To provide new capabilities ( the ones that were identified in that long list of the DCI by NATO at the Washington summit), Europe needs defence money. It will not get enough extra money. We seem to think that managing to hold defence spending level in real terms is enough. It isn't: manpower and equipment costs rise faster than inflation. The number of operations increase costs again in all sorts of different ways, both direct and in terms of lessons learned. We need therefore to aim for two things - national defence budgets linked to a fixed proportion of GDP, and start up money coming from EU defence rationalisation.
As the EU moved along these paths, it would be important to ensure that there was no free ride for less enthusiastic members. The establishment of a European Defence Budget would be an early priority and would force member nations to take a serious interest in agreeing what capability Europe needs. Nations could then either contribute capability or funds. This would undoubtedly lead to a virtuous circle of each nation volunteering force capability, and a realisation that they get more capability when their defence budget supports European rather than national forces. I shall leave John Roper to explore the mechanisms by which this might be possible.
Finally, as forces were increasingly operated at the European level, the common doctrine and operational planning would lead to common equipment requirements. Industry would welcome a larger common customer for its products. We would have the operational requirement driving the industry, rather than the need to find business for our local industry driving the programme. Role specialisation might happen, but it would be in a planned manner rather than the random system of today. The inefficiencies of duplicated support that we see in today's multinational forces would be eliminated. Europe would be a more equal partner with the United States within NATO, and would be able to field its own diplomatic and military capability if necessary.
In summary, I welcome greatly the vigour with which my country is approaching the development of European defence capabilities. However, we need to apply the logic of our own SDR to Europe as a whole, and free up the vast wasted resources by sensible rationalisation of duplicated defence overheads. We should look for early opportunities to pool common capabilities, take the savings in overheads and spend them on such much needed things as a European intelligence element. What I am suggesting is unlikely to be welcomed by those who stand to lose jobs, bases, headquarters and stars. Defence Reviews are never popular while they are being done. It is unlikely that Defence Ministries across the EU will be enthusiastic (turkeys don't vote for Christmas) - but Finance Ministries should be.