PESCO is in the American Interest

On December 8, 2017, the European Council established Permanent Structured Cooperation (PESCO), an EU program that aims to increase joint and collaborative defense capability development projects within the EU framework. All EU member states—except Denmark and Malta, which do not participate for domestic political reasons—signed on to the project. In March 2018, EU defense ministers formally adopted 17 PESCO projects pertaining to a wide range of defense capabilities, including projects to produce an armored infantry fighting vehicle, increase maritime surveillance capabilities, and enhance military mobility on the continent. 

On November 19, 2018, the EU added 17 more projects related to improving European defense capabilities. For example, one project focuses on upgrading the TIGER Mark III attack helicopter. A further 13 PESCO projects were added in November 2019, with one terminated in February 2020, bringing the grand total of active projects to improve EU member states’ defense capabilities to 46. 

U.S. policymakers and security analysts have traditionally voiced skepticism about PESCO and the possibility that it could diminish American influence in Europe or lead to a European army. However, PESCO supports American interests on the continent, and the Biden administration should vocally encourage PESCO’s implementation as a means to bolster European defense capacity.

American Criticisms of PESCO

The Trump administration vociferously called on European allies to increase their national defense spending and meet the “2 percent” threshold agreed upon at the 2014 Wales Summit. The 2 percent threshold refers to an agreement between NATO member states to increase (or maintain) their domestic defense spending to 2 percent of their GDP in an effort to halt decreases in defense spending among NATO member states. 

However, senior Trump administration officials later criticized PESCO as well as the European Defense Fund (EDF) despite these efforts seeking to increase EU defense spending. The EDF is an EU-based fund of nearly eight billion euros meant to finance both competitive and collaborative defense research projects while complementing EU member states’ investment through co-financing defense capabilities development beyond the research stage. 

For example, in May 2019, U.S. Under Secretary of Defense for Acquisition and Sustainment Ellen Lord and Under Secretary of State for Arms Control and International Security Andrea Thompson wrote a letter to EU High Representative Federica Mogherini criticizing EDF and PESCO. They argued that “the approval of the EDF regulations and PESCO general conditions as they stand now risks EU capabilities developing in a manner that produces duplication, non-interoperable military systems, diversion of scarce defense resources, and unnecessary competition between NATO and the EU.” At the core of their argument was the fact that the EU had not yet established the conditions for third states (non-EU member states) to join PESCO projects. Although EU member states were doing what Washington desired in increasing their defense investments, it evidently was not in the manner that American defense planners envisioned. 

However, in October 2020, the European Council established the eight general conditions for third states to participate in individual PESCO projects upon invitation. This enabled states like the United States and United Kingdom to take part in PESCO projects while, in theory, ensuring interoperability between EU and U.K. and U.S. systems as well as guaranteeing the quality of projects.

Ongoing Debates on PESCO

The announcement of the criteria for third state participation in PESCO projects was applauded in Eastern Europe, where some member states had been initially skeptical of the value of PESCO and worried that the lack of third state participation would alienate Washington and strain transatlantic relations. Upon the announcement of third state participation, Poland’s permanent representative to the EU, Andrzej Sadoś, published an opinion article extolling third state membership, even proposing that Poland would support the development of a European main battle tank through PESCO cooperation. Poland’s new position on PESCO signaled a shift in opinion in Eastern Europe as a result of the European Council’s successful agreement on third state participation. Therefore, both Eastern and Western European EU member states were largely in agreement on PESCO’s utility.

However, questions remain in some circles of the U.S. national security community on PESCO’s amenability to American interests. For example, in February 2021, Heritage Foundation’s James Jay Carafano argued, “The EU’s Permanent Structured Cooperation (PESCO), which seems more about propping-up European defense companies than expanding regional defense capabilities, could remain a source of tension.”

PESCO Supports American Interests

It is worth flipping PESCO’s skeptics’ argument on its head and asking whether conservative American opposition to PESCO is less about interoperability or efficiency concerns and more about a fear that European defense companies could become more competitive with American companies in the coming years. Viewing PESCO as little more than a means to prop up European defense companies is questionable at best, especially considering third state participation in individual PESCO projects. Since Washington can now participate in individual PESCO projects, the argument that PESCO unfairly locks out American companies does not hold water. 

In addition, it makes little sense for Washington to continue calling on Europeans to increase their defense spending but only if they do so in very particular ways. The fact that EU member states are developing these capabilities at all is a positive sign for European security. Discouraging such initiatives makes Washington’s calls for European defense spending increases—and in particular using defense spending to primarily purchase American systems—seem more self-serving than grounded in a genuine desire to develop European capabilities. 

A more nuanced American approach to encouraging European defense development is to maintain Washington’s insistence on the 2 percent benchmark for national defense spending among NATO members while simultaneously supporting defense developments through the EU. While American officials have worried that EU efforts could duplicate NATO capabilities, the centralized coordination of defense research and development through the EU should help ensure that European nations do not develop different versions of the same system. For example, the development of a main battle tank through the EU framework could reduce duplications and discourage EU member states from developing their own battle tank. The same logic applies to other high-level systems that will additionally help bolster NATO’s conventional deterrence on the continent since the vast majority of PESCO members are also NATO members. Relatedly, the PESCO projects to upgrade current systems, such as the TIGER Mark III helicopter, surely contribute to NATO’s operational capacity and should be viewed positively for doing so.

That said, there are some projects where American involvement is imperative. Chief among them is PESCO’s military mobility project coordinated by the Netherlands. The Biden administration has already signaled that it wants to join this project, which is an unsurprising development given the importance of military mobility in Europe to NATO’s troop movement across the continent. 

Washington should also look to join projects where it can provide financial support or expertise to increase the project’s effectiveness, and it should continue to encourage the EU to deepen defense integration through PESCO. In short, PESCO is in the American interest and it will enable the EU to be a more effective military partner, improve NATO’s logistical capabilities, and bolster conventional deterrence on the continent.