Abstract
The Arithmetic of Defence Policy
By Michael Alexander and Timothy Garden
The Kosovo campaign of 1999 demonstrated unambiguously the weakness of European military forces. Recognition of the consequences of this lack of capability has put new vigour into the EU defence debate. Yet decline in military capability is systemic in every European country. The Helsinki goals will do nothing to address this decline. National defence budgets over the past 15 years have been decreasing in real terms. Even if current aspirations to hold military spending level were to be achieved, the decline in capabilities would continue. Military equipment and personnel costs rise faster than domestic inflation, and therefore fewer people and weapon systems can be afforded each year. There is no prospect of significant uplifts in defence budgets in Europe, despite the acknowledged need for a range of expensive enabling capabilities for post Cold War operations. Palliative measures now on trial are unlikely to have a major impact. The only option for European nations is a progressive integration of their forces to realise the economies of scale that would allow effectiveness to be maintained. There are opportunities for initiatives that would produce short term pay-offs. Despite the severe political difficulties of a long term plan for integration, the alternative is worse. Trying to maintain sovereignty in defence provision will mean that the nations of Europe will eventually be unable either to meet the requirements of even their most modest security needs or to exercise any influence over US defence and security policies.
SIR MICHAEL ALEXANDER is a banker, mainly involved in Russia and Eastern Europe, and Chairman of the Royal United Services Institute for Defence Studies (RUSI). During his career in the Diplomatic Service, from which he took early retirement in 1992, he was Private Secretary (Overseas Affairs) to the Prime Minister (Margaret Thatcher); Ambassador at Vienna; and UK Permanent Representative at NATO (1986-1992).
SIR TIMOTHY GARDEN is Visiting Professor at the Centre for Defence Studies at Kingís College London, an Honorary Fellow of St Catherineís College, Oxford and the Defence and Foreign Policy editor of sourceuk.net. He retired from the air force as an Air Marshal, having spent a number of years in the UK MOD working on the forward defence programme. He is a former Director of the Royal Institute of International Affairs. His books include The Technology Trap (1989) in which he examined the high cost and poor performance of military technology.
The Arithmetic of Defence
Policy
by
Michael Alexander and Timothy Garden
The nature of the problem
The
provision and maintenance of appropriate and adequate national armed forces is
an increasing challenge for the rich nations of the world. The move away from
conscripts and reserves, expected and expecting to defend national territory,
towards highly trained professional militaries, ready for anything, continues
everywhere. Yet manning and
equipping these multipurpose forces is proving ever more difficult. In the
United States, there are calls for an extra $50 bn per year to rectify
widespread and important deficiencies[1],
while the perceived need to meet new threats makes yet more demands on funds.
In Australia, the government has announced a large year on year uplift in
defence spending. In Europe, the transition from the standing armies of the
Cold War to more reactive and deployable forces is far from complete despite 10
years of reshaping. In the UK, that decade has seen three major defence
reviews. But a sustainable balance between commitments, the capabilities needed
to meet those commitments and the resources provided to pay for the
capabilities seems as far as ever from being achieved.
It
is increasingly apparent that, looking ahead over the next two decades,
traditional national approaches to defence problems are not going to provide
adequately for Europeís defence and wider security needs. Collective security
through NATO provided an affordable answer to defence needs during the Cold
War. In the 21st Century, the capabilities required are more complex and
difficult to define. At the same time, the lack of an obvious direct threat has
led to severe reductions in the funds made available to the military. Much has been achieved in the
attempt to shift armed forces from their Cold War posture towards new, more
practical structures. The work on the European Security and Defence Initiative
within NATO and the developments in the EU flowing from the Franco-British
accord at St Malo in December 1998 have both demonstrated that Europe wishes in
future to be a serious provider of international security for itself and for
others. However even these very limited moves have generated arguments over
NATO/EU duplication in planning and capabilities; about the "right of
first refusal"; about arrangements for the non-EU European members of
NATO; about French deviousness, German fecklessness and US unilateralism; about
the differing demands of Article 5 and the Petersberg tasks. These matters are
important and central to the success of the next several ministerial meetings
in NATO and the EU. Mishandled or
ignored, they lead rapidly to headlines and embarrassment; but increasingly
they are not the main issue.
The central issue of affordability is neither new nor
unfamiliar to defence administrators. But a point is being reached where it can
no longer be disguised or circumvented. For decades the annual cost of a given
unit of defence capability in most European countries has been growing
considerably faster than the year on year inflation figure. A policy of level
spending in real terms, which is the most the UK or other European governments
have aspired to for the past 15 years, has therefore meant a constant decline
in military capability. Many unsuccessful efforts have been made in the past to
defeat defence inflation. In the UK we now await the results of Smart
Acquisition, Smart Research and, internationally, of the Framework Agreement.
Such initiatives can help, but temporarily and at the margin. If precedent is
any guide, they will ultimately not make a significant difference. And unless
European governments can find a way to get a significantly better return for
each unit of defence expenditure, starting relatively soon, their ability,
separately or collectively, to take substantive military action in defence of
their interests is going to evaporate. Even before the reality of military
ineffectiveness becomes established, the perception of it will mean European
governments losing whatever influence they have over US defence and security
policy as well as the support of their electorates for whatever levels of
defence expenditure then obtain. The only escape from this dilemma is for
European governments to begin to integrate a financially significant percentage
of the effort they devote to defence. The political difficulties will be very
great. But so will be the consequences of a failure to grapple with the issue.
Future European Security Needs
In
the Cold War period any assessment of force requirements began with a threat
analysis. Today such assessments are more about risks and needs. European
governments plan on the reasonable assumption that there is little or no risk
of external, land based aggression against Europe in the next 20 or so years[2]. Even if Russia ends up in an opposing
camp (which would imply a failure of European policy on a scale so massive as
to invalidate most other forecasts) it will not in this timescale be able to
launch a ground attack of any size or plausibility. The only assaults on the European mainland that seem at all
credible will be asymmetric or will involve long range missiles using perhaps
weapons of mass destruction. To
deal with these narrow, if serious, threats, assuming the will to do so exists,
will require a specific but limited set of deterrent, defensive and retaliatory
capabilities on the military side. (Although the distinction may become harder
to draw, many aspects of defence against, and response to, terrorism will of
course be non-military.) As far as missile defences for Europe are concerned,
these will, in future, have to be procured and used on an international basis
or not at all.
Leaving
aside nuclear issues and missile defence, whatever conventional military
capability Europe has is likely to be used either in dealing with internecine
conflict inside Europe, certainly possible but perhaps decreasingly likely
beyond the Balkans, or in peace-making and peacekeeping outside Europe. [3]The
US will increasingly (and in a post Cold War era understandably) want to leave
conflict inside Europe to the Europeans. They will certainly look to Europe for
support if they become militarily engaged outside the Americas. As for the
Europeans, operations they might expect to have to mount will include
humanitarian relief, promoting the rule of law, and rescue of EU civilians.
Any threat to European
interests sufficiently grave to warrant the despatch of an expeditionary force
for possible warfighting will attract the interest of the US; and that US
interest, once engaged, will tend to favour operations at the high intensity
end of the spectrum using the most modern weapon systems.
Much has been made of the difference
between high intensity operations and operations flowing from the Petersberg
tasks[4]. The distinction is looking increasingly
artificial ñ whether one is thinking in terms of political decision-making or
military feasibility. European nations are only going to have single sets of
conventional military capabilities and they are not going to be infinitely
flexible. Both kinds of operation are bound to involve casualties (the Kosovo
ìnil fatalitiesî experience is unlikely ever to be repeated[5])
and to be domestically controversial.
Peacekeeping and peacemaking are both likely to result in prolonged
involvement rather than to permit the quick in, quick out operation implied by
the word "expeditionary". For any serious military engagement hi-tech
capabilities will be necessary but are very unlikely to be sufficient.
There
are certain to be differences of perception between Europe and the US as to
what kind of crisis will require military intervention overseas and in what
form. If Europe is to have
influence on security decisions in Washington, it will be because Europe is
able and willing to deploy a military capability of real value to the US in
meeting its concerns.
("Influence" means an ability to persuade the US political
establishment to pursue a policy different, in greater or less degree, from
that which it would otherwise have pursued. Such influence might, obviously, be
used to encourage or discourage action.) Individual European nations, including
the UK, are not going to be able to meet this criterion for much longer. The difficulty, always considerable, of
persuading the US to take the views of its European allies into account seems
bound to increase. Domestic political considerations, including demographic and
cultural change, and evolving perceptions of the countryís national interest
and of the kind of sacrifice that might be made in its pursuit, are all
pointing in the same direction. Unwelcome though some of them may be, there is
nothing inherently reprehensible or censurable about these developments. They
reflect the overwhelmingly positive fact that the US is a huge and vigorous
democracy.
It
will continue to be a
primary interest of all Europeans that NATO should remain viable and that the
US should remain engaged on this side of the Atlantic. Europe, for its part, will always be an
area of special interest and a partner of choice for the US. But whereas US national interest over
the past 50 years dictated continuing and physical US involvement here, because
the loss of Europe to the Soviet Union would have resulted in a decisive shift
in the global balance of power, such involvement is no longer a given. The US establishment (both executive
and legislative branches) now believes that, while it would certainly prefer to
have partners, it can in the last analysis pursue its global objectives on its
own. The realisation that this is the case is being used by many here to argue
that Europe dare not rock the boat.
But in fact if the US wants a partner of weight and quality in the years
ahead, a partner with ìadded valueî capable of co-operating effectively with US
structures and equipment, it will to have to accept that such a partner is also
going to be more independent and on occasion contrary. If it turns out that the
US does not want such a partner, the importance of the Alliance will anyway be
undermined. The question of how the European Allies ensure that their interests
are not ignored will then assume a different complexion.
In
the authorsí view, however, there is little doubt that the US would over time
accept a more independent partner; always assuming the European capability was
real. While the US may be the only super power, its strength is far from
unlimited. Effective co-operation
between Europe and the US, in pursuit of common goals, is bound to emerge as a
necessary condition for global stability.
It is against this background that
Europeís governments will have to determine the military capabilities and force
structures that they require and that they think they can sustain. There are
internal and external security needs. At the high intensity end of the
spectrum, European forces will need to provide added value to US capabilities,
if they are to be credible as partners. (What has been called Gross Role
Specialisation, where the US provides the hi-tech capability and the Europeans
the foot soldiers i.e. the body bag candidates, is never going to be
politically saleable. Events may take us in that direction but it is not a
defensible policy option for European governments and would not be a
sustainable posture for them vis a vis the US or each other.) European nations
will also have to be prepared to field effective military capability in a range
of more local, yet demanding, circumstances. The trend of the last ten years in
European military provision indicates that it will be impossible to meet these
challenges without a radically new approach. It also suggests that we need to
start now to think in practical terms whether such an approach is possible.
Declining Capabilities
That same decade has seen most European
nations review their armed forces and produce new structures. Each national
review of defence policy produces a force structure tailored to the expected
commitments and available funds. Within a very short time, the funding proves
to be inadequate and a new review is initiated. Almost invariably this results
in a further reduction in force capability rather than in an uplift in funds.
Public memories are short, and each defence review is presented as a long-term
solution. There has been an understandable desire to gloss over inconvenient
considerations. But in truth, and
despite temporary upsurges in defence funding such as that in the early
eighties, the inability to sustain a balance between resources and commitments
has been evident since the end of World War 2. Fudges in the past were possible
for some countries able to use the reduction of post colonial commitments to
balance the equation. The end of the Cold War gave a rationale for another
reduction in capabilities to balance the budgets of all NATO nations. The net
result has been a sustained decline in military capability over many years. It
may well be that this has reflected a correct estimation of electoratesí
priorities for their nations. But little or no effort, over the years, has gone
into the attempt to develop an informed consensus on the subject. At some point
in the next several years the UK, as well as Europe as a whole, risks passing a
critical point beyond which the maintenance of a military capability for
anything other than the most local defence requirements will become impossible.
The
underlying reasons for this progressive decline in the armed forces can be
understood by looking at UK defence policy over the past quarter of a
century. The purchasing power of
defence budgets has a direct effect on capability - and of course on the
defence industries. Only by understanding what is causing the problem, can
solutions that are at least rational be proposed. In Britain as in the rest of
Europe, such solutions will require difficult and, for many, unwelcome
political decisions. But the requirement to address these cannot be ignored any
longer.
British Defence Resources since 1975
20
years ago Britain could mount a rescue operation for the Falkland Islands at a
distance of 8000 miles, and was able to initiate and start deploying an
appropriate task force in a single weekend. During the Nineties, culminating in
1999, Kosovo, a small if militarily inhospitable province, was abused by its
better armed but in international terms not much more impressive metropolitan
neighbour, Serbia. The former Republic of Yugoslavia has been a focus of
conflict since the end of the Cold War. The possible need for action in
relation to Kosovo had been apparent for years. The distances from Western
European countries were so short that Italy was able to act as the aircraft
carrier for the operation. And yet, when it came to the military operation,
virtually all of it had to be conducted by, and, for some of the more potent
capabilities, from the United States.
The
United Kingdom takes defence seriously and likes to do it well. In Europe only
France, Turkey and Greece spend more[6]
proportionately. Yet in the decade since the end of the Cold War, it has needed
three major reviews of defence spending, and significant capability adjustments
in the in between years. These spending reviews were not caused by the
incompetence of defence planners: they were the consequence of acceptance by
the decision makers that one could not hope to do more than keep defence
spending level in real terms.
A
look at UK defence spending[7]
in real terms over the past 25 years shows four distinct phases. In the mid
1970ís defence spending was fairly steady around £25.5 bn a year at current
prices. It then climbed for the first half of the 1980ís, reflecting a
particularly chilly phase in the Cold War and a consequent NATO wide commitment
to growth. It reached a plateau of some £33.5bn (in year 2000 values) before
going into a decade of decline from 1986 to level out at the current base of
around £23.5 bn a year. Over the past quarter of a century, real annual
spending has declined by just 8%, and for much of the intervening time was up
to 30% higher than the 1975 level. Yet a comparison of any of the indicators of
military capability shows a marked drop in available capacity. Between 1975 and
2000, manpower has declined from 346,000 to 212,450 (-39%), regiments and battalions from 114 to 76 (-33%),
frigates and destroyers from 50 to 31
(-38%), RAF combat squadrons from 38 to 22 (-42%)[8].
Nor is it easy to argue that the smaller numbers of men and combat units have
been compensated for by technological improvements. Despite the vast
expenditure of the 80ís, the UK could only provide some 4% of the overall air
effort for the Kosovo campaign[9].
Elements of defence spending
Defence
spending can be broadly divided into three main parts: personnel costs,
equipment costs and running costs.
Personnel costs, which currently make up just over a third (37.5%)[10]
of the UK budget, closely follow civilian wage costs. In time of full
employment they may need to run ahead of their civilian comparators given the
many disadvantages of service life. Even in time of unemployment, there is
little evidence that the services can underpay and retain their people.
Increasingly the type of manpower that is needed within the services is
becoming more technically able, and thus even more expensive. Wage costs
usually rise at or above inflation.[11]. The military, particularly the army, is
a labour intensive industry and we must therefore expect the personnel slice of
the budget to rise in real terms year on year.
The
cost of military equipment is also large. Currently 44.2%[12]
of UK defence spending is related to equipment. Price changes of defence equipment
are more complicated to analyse than the rise in manpower costs. The life
expectancy of a particular item is often a matter of choice, and may be
determined by budgetary pressures. Some equipments may cost very much more than
their predecessors, but fewer of them may be required to do the task. For
example[13]
each Lancaster bomber in 1945 cost some £45,000 per copy or just under £1
million at todayís prices. The Tornado bomber is its lineal successor, carrying
a similar bomb load over similar distances. When the Tornado came into service
in 1980, it cost the same as 20 Lancasters in real terms. The Tornado is
currently undergoing a midlife update, which will cost another £10m per
aircraft. Each generation of
combat aircraft has been significantly more expensive in real terms than the
one it replaced.
Defence
programmers have had to balance their budgets by reducing the fleet size with
each new generation of equipment. This causes an uncomfortable rise in the
relative support costs of fleets as smaller frontlines still require the full
range of maintenance, logistic and training infrastructure to sustain
them. Planners use a similar
technique for weapon stockpiles. Weapon costs show a high cost rise with each
new generation. There is a temptation to keep the old stock and bring in the
new weapon more slowly. In the case of both weapons and platforms, the reducing
numbers of units procured further forces the unit price higher still as
research and development costs have to be recovered over smaller buys. In the
1950s, the UK could contemplate procuring four different aircraft designs just
for the V bomber role[14].
There were many different fighter and conventional bomber aircraft types. By
the turn of the century, all the air defence and offensive combat tasks were
covered by two versions of the Tornado, two versions of the Harrier and the
Jaguar. Future plans see tasks for just two collaborative aircraft types
covering all bomber, fighter and armed reconnaissance roles.
Surprise is sometimes expressed that
military computer and other high technology equipment have not experienced the
falls in price and increases in capability that have been seen in the
commercial computer industry and in consumer appliances. There are three
reasons for this. The production runs are very short, and often spread over a
long time. The technologies needed are often very specific to military usage,
and have limited application beyond. The period of time from conception to
deployment is typically 10 to 20 years and it is difficult to take advantage of
technical innovation, which is at a much faster rate. Most equipment costs rise
at more than 5% above inflation and in certain areas may be much higher than
this. Attempts are made to offset this problem by increasingly looking to buy
off the shelf solutions. Such an approach does help, but for many military
needs there is no ready solution on the commercial shelf. There is no doubt
that pressures will remain to exploit cheaper civilian products. Computing and
communications would appear to be a particularly good area for such an
approach. Yet the demands of military ruggedness and security, coupled with a
need to interoperate with allies seems to have prevented much progress so far.
The
remaining 18.3% of defence expenditure includes the costs of maintaining the
support for the armed forces. Most running costs will be fairly closely aligned
to normal inflation in the economy. Fuel, accommodation, food, transport,
maintenance and logistics support activities have no reason to be out of line
with inflationary pressures more generally. Indeed there are often
opportunities to undertake some of these activities in ways that take them out
of some of the extra costs incurred by military operations. Contractorised,
civilianised and out-sourced support should be sustainable with level funding
in real terms. In a time of declining forces, it is possible to realise some of
the value of the defence estate by selling off land. Short term spending
regulation is also possible by reducing the activity levels of forces, and this
has historically often been used to compensate for rising costs elsewhere in
the defence programme. If used too extensively such measures affect both combat
capability and personnel retention. These lead to steeply rising costs in later
years.
Handling Defence Inflation
We
have therefore in the UK defence programme an inflationary problem. Personnel
costs rise at a rate slightly above inflation; equipment costs rise much faster
than retail price inflation; and running costs rise in line with inflation. The
combined effect is that level defence spending in real terms inevitably leads
to decreases in force levels year on year. In fact, level funding in real terms
has been the exception since 1985, and the resultant decrease in force levels
has been even more severe. The Defence Review in 1991 under Tom King [15]reduced
the combat front line by around 30% with only limited reduction in defence
spending. This reflected how badly overheated the programme was at the time. In
1995, Malcolm Rifkind [16]cut
the running costs side of the budget to make the books balance. In 1998, George
Robertson[17] cut tanks
and aircraft to keep the capability for rapid deployment. In each case, the
Defence Secretary argued that there were good strategic reasons for the review.
Perhaps each was right, though Kosovo may suggest otherwise. But the underlying
fact was that without such force level changes much more money would have been
needed.
No
British political party is advocating doing more to defence spending than, in
effect, keeping it level in real terms. However persuasive the case made in
Whitehall by, and on behalf of, the Armed Forces this situation is not in
present circumstances going to change for the better. There are too many
competing and more immediately compelling claims on the national budget. It
follows that there will continue to be a decline in capability. Some attempt
was made from 1987 to square this circle by imposing year on year
"efficiency savings" of up to 3% on the armed forces to compensate
for this pervasive defence inflationary effect. What passing improvements were
made have long since been absorbed, and it was never going to provide a
long-term solution. The proportion of GDP devoted to defence in the UK has
declined from 5.3% in 1986 to 2.4% in 2000. The British Government announced as
part of the public spending review in 2000 that it intended to reverse the
decline in defence spending. The amounts concerned equate to 0.3 % growth[18]
in real terms in each of the following three years.[19]
It remains to be seen whether even this modest, if hard won, commitment will be
fulfilled. To counter the ìarithmetic ì discussed in this paper would in any
case require an altogether more substantial and more improbable increase.
Insofar as successive British governments seem to have
been doing their best to balance resources and commitments, the UK makes a good
case study. However, the story is much the same wherever you look in NATO. The
1986 to 2000 figures[20]
for other NATO members GDP spending on defence follow very similar patterns:
Germany 3.2% to 1.5%, France 3.9% to 2.7%, Italy 2.3% to 1.9%, Belgium 3.0% to
1.4%, Spain 2.3% to 1.3% and in the US 6.3% down to 3 %. Manpower changes have
ranged from a drop of 25% in Italy to 60% in Belgium, with parallel drops in
fielded forces. (Belgium has recently announced its intention to withdraw the
remaining forces it has deployed in Germany as it ends conscription.)
It
is significant that Australia has recognised in its new White Paper[21]
that such an approach to defence funding makes no sense in the long run. They
identify [22]four key
cost pressures. Personnel costs have risen by an average of 4.9% per annum in
real terms over the last ten years. Operating costs are assumed to remain level
in real terms for the next decade.
Investment in capability is seen as a major cost growth problem both for
maintaining current capabilities and procuring new ones. The long-term
replacement programme for the F/A-18 fleet is particularly problematic.
Finally, Australia sees a need to invest in improved readiness for its forces.
They have therefore decided to pay the price to sustain their defence budget
over the next 10 years at its current 1.9% of GDP. They estimate[23]
this will require an extra Aus$ 23.5bn over the next 10 years on a budget which
is currently Aus $12.2bn per year.
Even the United States is suffering from aging fleets
and manpower problems, which will need a significant rise in defence
expenditure to correct[24].
Retention is a problem in the US military as it is in volunteer forces in
Europe. The priority for immediate defence spending from the new Administration
has been for pay and quality of life resources. Many types of equipment are
overdue for replacement. The USAF strategic air transport fleet is aging and
suffering from low availability. It is likely that the review of defence
priorities being undertaken by the new Bush Administration will look to reduce
force levels in a traditional manner. Technology and changing strategic
priorities will be the justification.
Future Budget Prospects
Looking
forward over the next 15 to 20 years, this arithmetic takes us into uncharted
territory. If all goes well with the economy, the UK will have sustained a
growth rate of around 3% in GDP.
If we
manage to keep defence spending level in real terms, its share of GDP will have
declined to 1.3% by 2020. Manpower costs are likely to have risen by at least
20% (and perhaps much more given demographic trends) in real terms, unit
equipment costs will have more than doubled. The frontline will need to be no
more than half the size that it is today. New generation equipment may be more
capable, but it will be very scarce. In any event, many of the new tasks will
call for manpower above all else. The police have learned the lesson that
numbers on the streets matter: many of the new military challenges will require
a comparable response.
If
the tried, tested and failing approach of the past continues, slippages and
reductions in numbers will be used year on year to make the books balance. We
shall have more major reviews from time to time to reflect new strategic
realities. Our European allies will be following a similar path towards having
no useful military capability - indeed many are a long way down this path
already. We should not conceal from ourselves that there will be a critical
point, a critical minimum, beyond which our forces will become unemployable in
any remotely challenging environment. Well before we reach that point, public
willingness to fund or man forces unsuitable for anything much more than
ceremonial will evaporate. It may be that this is the chosen route for the UK.
There will be many other demands on the national budget. Perhaps it will be
possible to ignore the troubles in the rest of the world and their impact on us
(though this seems unlikely) or to salve our consciences through the aid budget
(we are going to be asked to do more on that front anyway). Perhaps the thought
of real co-operation at a regional level is so uncomfortable for so many that
it would be better to have no useful military capability.
Pooling and Integrating
But
co-operation does offer an alternative to opting out. It is not one that solves
the problem for all time, but it could put off the crisis for a generation or
more. The rising ratio of overhead costs to capability affects all nations as
they reduce their frontlines. Yet with pooled capabilities, they could reverse
this trend. The number of people needed would decrease, support manpower costs
would decrease, and further savings could be made by outsourcing with larger
contracts to let. When pooled forces came to choose successor generation
equipment, they would more easily agree on a common requirement. Production
runs would be larger, and unit prices reduced. Governments would be both
challenged and assisted by peer pressure and by the difficulty of escaping from
binding international obligations.
The
inefficiencies of the national approach to defence within European states are widely
recognised. Some argue that the most effective way to tackle it is through
common procurement and perhaps greater integration of European defence
industries. Attempts at both elements have not always been successful in the
past. Recent experience in procurement of a collaborative frigate shows how
difficult it is to see such projects through successfully. Moreover, the
defence industries are reluctant to be integrated by European fiat. They look
to partnerships, which improve their shareholder value. They rightly want to
keep open the option of transatlantic link ups. This is more likely to improve
competition and hence value for money. There will in any case be opportunities
for sensible common procurement where there is a widely shared common requirement.
It makes sense to try to exploit these where it can reduce procurement
costs. Such opportunities will
arise more often if nations move towards a pooling of military resources.
The pooling approach to
greater efficiency in defence spending on an EU wide basis could and should be
done on a progressive basis. An abrupt move towards complete integration of
military capabilities would not be remotely feasible given current national
sensitivities and policy divergences. The countries with, as they would see it,
serious defence aspirations are understandably sceptical about the stomach of
other European governments just now for any remotely controversial or risky
military undertaking, particularly outside the region. Even an EU comprehensive
strategic review would be unlikely to be very productive. Proposals as modest as those agreed at
Helsinki have been attacked as though they were an immediate prelude to (if not
actually synonymous with) the formation of a European Army. Such an army will
in reality remain a fantasy unless and until the political integration of
Europe has moved a great deal further than is at present foreseeable. In the
near term (say, 5 years), therefore, it will be much better to look for
practical opportunities to rationalise and pool useful capabilities in being
and to demonstrate how national taxpayers would benefit from these shared
capabilities. There are such opportunities.
This is not a new idea. NATO fields a supranational
early warning aircraft (AWACs)[25]
force because the capability is too expensive for smaller nations to field.
Some nations have already come to bilateral arrangements for sharing specific
resources in order to cut costs. The recent agreement by the Netherlands and
Belgian navies to develop common headquarters and support services for their
fleets is a hopeful sign that European states are recognising the need to make
a start on the elimination of expensive duplication. Today this approach is
allowing greater military capability to be deployed. While the Dutch and the
Belgian planners would individually be reluctant to offer an unlimited
deployment of a frigate for operations, they can now arrange to share a task
with a roulement of forces between themselves. The management of the force from
a shared headquarters results in a greater military capability at no extra
cost. The Nordic logistics battalion provides a pooled capability for
peacekeeping operations in the Balkans.
Success in building on these examples would lead to planning for future
programmes on a more rational basis.
If we look at the European forces as a whole, we see
duplication of headquarters, planning, training, logistics support,
procurement, research, bases and other facilities. Opportunities for more
effective operation of European military forces are apparent across the range
of military capabilities. However some force elements lend themselves to
pooling more readily than others, and there are also different pay-offs
depending on the costs of duplicated infrastructure.
Early Opportunities for Pooling
For a number of reasons
aircraft capabilities offer the possibility of much more quickly achieved
improvements. Air procedures are already well harmonised between nations.
English has become the universal language of the air, and this considerably
eases the problem of mounting international combined air operations. Most
importantly, given the high unit cost of air force platforms, it is not
surprising that many nations operate common equipment. This also eases the
problems of rationalisation. Finally, the high costs of infrastructure to
support air operations mean that modest rationalisation can pay high dividends
in achieving greater military capability at lower cost.
Airlift
is an obvious example of a capability that Europe needs and that could operate
on a similar basis to NATO AWACS. If forces are to be deployed rapidly, they
need to be able to call on a significant airlift capability. In looking for an
opportunity for early rationalisation, we need to identify an aircraft type
that is common to many EU members. The air tactical transport role is a
capability that most nations require.
Many provide for it at least partly using the C130 aircraft. Pooling of
some of these widely used C130 Hercules could provide an immediate European
tactical fixed wing transport capability. (The irony of creating a European
pool out of US equipment is clear but should not be allowed to affect the
logic, now or in future.) Provided that nations structured their contributions
sensibly, they could make operating cost savings at the national level through
closure of bases, training units, and headquarters. The level of saving would
depend on the degree to which each nation felt able to rely on the supporting
infrastructure being provided by a European facility.
Some ten EU nations operate some 137
C130 Hercules tactical transport aircraft.[26]
For those nations[27]
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.
Nor would nations lose the option to withdraw their airframes and aircrews if
they felt the need for some national purpose. The force would not be rendered
useless if one or more nations declined to take part in a particular operation
for national reasons. However, for significantly lower costs to be achieved the
force would have to be organised on a basis very different from current on-call
multinational arrangements. It would operate from a single main base located
centrally in Europe, but would have dispersed flights to service national
needs. There would be a single headquarters, manned by personnel from the
contributing EU nations. Aircrew would be multinational and not tied to the
airframes provided by their nations. There would be a single planning,
servicing and logistics organisation to support the force. Most importantly,
the manpower, headquarters, infrastructure and other savings would have to be
realised in the military structures of the contributing nations. Those
resources could then be redeployed to updating and enhancing other
capabilities.
Over
time, the management and operation of this common fleet would lead to a common
perception among participating nations of the characteristics of the next
generation transport aircraft. This would have great benefits in terms of
reducing duplication of defence research and procurement costs in this
particular area. The extra costs of operating on a national basis rather than a
pooled basis would also become clear, and it is likely that nations would begin
to see the advantages of contributing to such a force element. This would also increase the pressure
for common equipment procurement programmes for successor aircraft.
In
a slightly longer timescale, the requirement for a large strategic airlift
capability could be tackled. The operation of such a fleet could easily be
managed by the same organisation that would look after the tactical C130 pooled
capability. It would be possible to procure a new capability of A400M, C17s or
Antonov strategic transport aircraft that could either be operated by the
military or on a leased basis from a commercial company. In either case the
costs would be much lower than each nation trying to operate a very small fleet
of large and expensive aircraft.
Air
to air refuelling capability is also needed by all European air forces, and
would be a natural candidate for a European fleet operation. Consideration is
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 that 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 was being provided by
the private sector. For the UK, this could be a particularly attractive option,
given that a large amount of money in the defence programme is currently
posited against a national capability.
In
the marine environment, the pooling of transport ships for strategic deployment
is an obvious place to focus since many vessels are in any case leased. The
future acquisition of dedicated vessels, like the UKís Ro Ros, may be subject
to Europe wide competition. They could therefore be built outside national
yards to meet common criteria. Likewise the supply support of navies, through
the RFA and its equivalents, would lend itself to pooling. The great majority
of naval vessels use similar fuel. There is widespread commonality of rigs and
couplings. Solids (victuals, stores ammunition) might present greater short
term difficulties but none that look insuperable given the will to tackle them.
Progress towards common supply services would open up the possibility of
rationalising the number of European naval bases, which is where the
significant cost savings would be made.
The integration of naval training, both at sea and on
shore, also looks an attractive option. A great deal of joint combined training
already takes place at sea in the SW Approaches off Plymouth and could be
undertaken in training establishments around Portsmouth. A similar complex
would presumably be needed in the Mediterranean. What is missing is the
political impulse to push existing practice onto a qualitatively new plane
Full
integration of operational combat capabilities on land would raise particular
political sensitivities and would initially produce limited savings. Some of
the support activities for land forces lend themselves to early opportunities
for improving effectiveness at lower cost. Engineers, communications, transport
and medical services 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. They have also experienced the
disproportionate costs of supporting small national contingents in the Balkans. There would be economies through the working out of common specifications
and the use of a limited number of common suppliers. Some force elements are
provided jointly to all armed services. Some of these, like protection against nuclear, biological
and chemical warfare, are obvious candidates for common provision.
Early
Opportunities for New EU Capabilities
Moves towards integration of EU military capabilities
would free up funds to start providing some key new force elements.
Reconnaissance and Combat Search and Rescue (CSAR) are two roles, which are
expensive in equipment and training, but which could offer opportunities for
building up EU capabilities to operate with the US forces available to NATO.
There will be considerable development in the use of UAVs for the tactical reconnaissance
role, and there is a need for a European satellite-based strategic
reconnaissance capability. Both of these capabilities will be expensive, but
will be essential if Europe is serious in its intention to provide real
military capability. The information exploitation organisation will again be
much more cost-effective if operated at the supranational level. This
capability needs to be considered in the context of an EU intelligence
capability, which, given the political, military and financial complexities, is
dealt with below as part of medium term integration.
None
of the air transport, air tanker, naval auxiliary, land support, reconnaissance
and CSAR pooling proposals would undermine national capability. Indeed for the
smaller nations it would both increase available capability and reduce costs.
It is thus possible to see opportunities for enhancing the support element of
military power in Europe in a relatively short timescale through aggressive
rationalisation of forces in being, and exploiting the moves towards
public-private partnerships. Significant defence funds would be released
provided that nations took the consequent manpower and infrastructure savings
which would follow.
Moving towards deeper integration
While
the support area offers opportunities for pooling and rationalisation of forces
without too many issues of national sovereignty, real increases in capability
will need a similar approach to the elements of combat power. Major EU defence
players will not consider giving up their combat capabilities to a
supranational authority unless and until some confidence has been gained
through the less contentious pooling of support functions suggested above.
Offensive
and defensive air power capability is politically difficult to pool and operate
at the European level, but is relatively easy to integrate at the operational
level. Nations are prepared to make arrangements for multinational forces, but
insist on retaining the ability to operate their forces nationally. The effect
of this approach was seen in the divergence of the national Tornado
enhancements over the past 20 years. The tri-national training unit was closed
down in 1999 because the aircraft it operated were no longer representative of
each nation's own Tornados.
As soon as it became politically
acceptable, some of the existing common combat air equipment capabilities could
be pooled in a similar manner to that described for the C130 force. An obvious
example would be an EU F16 force. Belgium, Denmark, Greece, Netherlands and
Portugal operate 424 F16s between them. Despite the divergence in Tornado IDS
updates, Germany, Italy and the UK could look at how pooled arrangements might
allow them to make a relatively early contribution of some of their 570
aircraft to a joint offensive capability.
The
introduction into service of Eurofighter from 2002 to five European nations
(UK, Germany, Italy, Spain and perhaps Greece[28])
offers a good opportunity to enhance capabilities and reduce costs through
pooling of assets. Sharing training, engineering, logistic, and operational
planning facilities would throw up significant operating cost savings. These
would be greatly increased if the number of bases required could be reduced as
a result. Most importantly common fleet management would play a vital role in
retaining system configuration control so that all Eurofighters remain fully
interoperable. If Europe moved towards the American large airbase concept, we
might perhaps imagine an operationally ready force of some 400 Eurofighters
made up of 20 multinational squadrons distributed over as few as five airbases
(one for each operating country).
In addition, an operational training base on a sixth airfield would be
required. The training base could
also provide a home for the European Union Eurofighter HQ. The operating costs
would be much less than the planned national arrangements, even if the
traditionally smaller European airbases were retained. The key to success would be the
application of common training, procedures and aircraft modification
programmes. By making each unit
truly multinational and by developing the overall common operational policy
through the EU HQ, the problems of national divergence could be eliminated. A pooled
fleet would also ensure that a common approach to weapons procurement was
adopted. Indeed, it would become an attractive club to join: other EU nations
could calculate the additional cost savings to be achieved by procuring
Eurofighter as their successor combat aircraft.
The
development of an EU precision attack capability would be a key part of this
medium term plan. The provision of adequate stocks of appropriate munitions
would allow nations to contribute in other ways than just aircraft and aircrew.
Starting the process early would allow a common view to emerge about the
platform/weapons combination that should be developed. Leaving France, Germany,
Italy and the UK to develop their own future offensive capability will
inevitably result in a sub-optimal solution, with some relying on US solutions
and other on national upgrades. A united EU view on both the importance and the
nature of the next generation offensive air power requirement would be a very
powerful driver towards procuring an effective capability. There is time for
this process to begin, provided that nations start to operate in this role
together. Under the current arrangements, Europe is likely to perpetuate the
mix of systems of limited effectiveness in the offensive role.
One
of the more expensive power projection capabilities is provided by the aircraft
carrier. Few European nations can afford to field such a force; for those that
stay in the role, the opportunity costs are very high. The UK currently plans
to provide two carriers, in 2012 and 2015[29],
but for the reasons argued earlier seems unlikely to be able to afford such a
capability when the time comes. France, Spain and Italy will probably wish to
retain elements of the carrier role as well. Operated on a national level, one
or two aircraft carriers do not constitute a viable and reliable force, and the
opportunity costs are severe for other defence capabilities. The timescale is
sufficiently long for interested EU nations to look at how they might jointly
contribute to a force of 4 or 5 aircraft carriers with their supporting ships
and aircraft. The obstacles are great and the precedents less than encouraging.
(Franceís Charles de Gaulle will, for instance, carry a conventional carrier
aircraft, the Rafale, while the UK carriers seem likely to be equipped with an
American system, the STOVL JSF. Given their use of the Harrier in the present
generation, it would make evident sense for Italy and Spain also to go down the
JSF route.) But if the European region is to retain a capability in this sector
ñ and the expeditionary concept makes much more sense with one than without one
ñ there may be little alternative but to take a long hard look at integration,
in one variant or another.
Intelligence
requirements permeate every aspect of military operations, and an independent
Intelligence capability will be needed if EU forces are to be able to operate
truly autonomously. Pooling of current intelligence related capabilities will
be difficult for a number of reasons. The equipment used by nations is diverse,
and much of it outdated; the national exploitation is jealously guarded; and
there are bilateral difficulties, particularly for the UK, with wider
information sharing. For these reasons, it would probably be more effective to
build up a new EU intelligence capability from scratch. This would be
expensive, but would allow a fully integrated modern system to be established
relatively quickly. The political complications are self-evident but if the EU
wanted to focus on one area for priority action, then Intelligence could provide
it. The platforms, communication, fusion, exploitation and dissemination
systems could be built up to be fully interoperable with NATO, but also
independently usable. Kosovo showed that the inability to share digital
intelligence data was a problem throughout the operation.
The Need for European
Defence Funding Arrangements
These
examples suggest some practical areas where the development of European Force
Elements and common support and logistic services could provide building blocks
for the strengthening of European defence capabilities. They would make more
effective use of European national defence budgets through the removal of the
cost overhang of separate support systems. Valuable as such individual
initiatives would be, they would not by themselves represent a coherent new
security structure for Europe. They would however illustrate how significant
improvements in effectiveness could be achieved through merging particular
national capabilities and sharing common services.
For
this approach to become coherent, it would be necessary to develop a planning
and budgetary system at the European level. Eventually there would be a requirement for a European
Defence Budget. Under such a system EU members would provide either defence
capability or money as their contribution. This would have a number of
beneficial effects: not only would the free ride be stopped, but nations would
probably prefer to improve their military capabilities rather than to
contribute money to the employment and industries of other nations. Peer
pressure, as well as legally binding commitments e.g. to a given level of
defence expenditure, might come to seem markedly more compelling to the
participants than the distinctly low key incentives that have characterised
NATO co-operation. A virtuous circle of improved military capability and
effective European defence could be established. There would be many problems
in assessing the true worth of each contribution, but the process would also
make the planning and audit at the European level more effective.
While
we can construct ways forward that would give Europe much better capability for
its defence spending, the reality is likely to be much less exciting. For
rationalisation or pooling of capability to work, headquarters and bases must
be closed, senior staff officers and officials pensioned off, and traditional
organisations dismembered. This results in enormous institutional antipathy to
such moves. Sensitivity about sovereignty implications is another substantive
reason for holding back. Pork barrel politics ensure that equipment spending
remains sub-optimal. The difficulty likely to be experienced in meeting the
Helsinki goals is a measure of how far Europe is from anything like a real
breakthrough. A region that spends
170 bn Euros on defence and has 2 million men in uniform must struggle to
provide a 15 brigade deployable force.
Those who advocate increased spending by European nations on defence
without institutional change are even less likely to have their hopes realised.
In any event, a Europe that spends so ineffectively on defence will not be
helped by wasting more money on separate, poorly co-ordinated efforts.
The Way Forward
The
issues, which, in the personal view of the authors, national governments are
called on to address, will seem politically unrewarding, but can no longer be
bypassed. If the nation states of Europe wish to retain something approaching
their current ability to use military force in defence of their interests over
the next 15 to 20 years, they will have to be prepared to integrate their
respective efforts to an ever more substantial degree. The pursuit on a national basis of
sophisticated and balanced capabilities, suitable for both high intensity and
peacekeeping operations, is a chimera. In the case of the UK we will hit the
wall well before the first new aircraft carrier is due to arrive in 2012. In
the case of most of our European partners, the crunch will come much sooner [30]
Integration
is something different in kind from co-operation. It presupposes a sufficient commonality of purpose and
policy to allow the participants to derive the economic benefits of common
procurement, joint capabilities and a measure of role specialisation. Co-operation among European partners on
the traditional basis will not deliver the savings necessitated by the twin
pressures of increasing defence costs and declining popular willingness to fund
them.
A
collective effort capable of giving Europe some prospect of a military
capability reflecting its economic, commercial and demographic weight would
certainly suffice to give Europe real influence in the military and security
field in Washington. That kind of
integration is at least conceivable among the similarly sized and located
nations of Europe. It is not on offer to them, singly or collectively with the
United States.
Europe
is at present so far from the kind of consensus that would support a single
foreign and security policy, and therefore a fully integrated defence
capability, that it seems fanciful even to talk of the US and Europe as
entities with military capabilities comparable in effectiveness if not in
scale. A massive, and at present
improbable, cultural evolution will be required. But the evolution is no larger, or more improbable, than
that which has already occurred in the commercial and financial fields and in
many parts of the political arena.
There is no longer the Red Army in Eastern Europe to act as a
galvanising force. The memory of Western Europe's long civil war, an awful warning,
is receding. But the challenges of
globalisation will eventually prove no less demanding. Equally stimulating, one may hope, will
be the realisation that without a fundamental change in European attitudes,
Europe will become increasingly, and ever more rapidly, incapable of responding
to challenges -- from friend or foe -- where its security and the defence of
its interests are concerned. If
results are to be achieved in a useful timescale, we need to start soon ñ
initially at least by publicly acknowledging the seriousness of the issues
summarised in this article and preferably by moving rapidly into detailed
consideration of practical suggestions along the lines proposed. However difficult the politics, the
arithmetic of defence policy is implacable and will not tolerate delay for very
much longer.