GEO-POLITICAL DEVELOPMENTS

14. Since we last reported on the ESDP in July 2000 the co-ordinated terrorist attacks on the United States and the subsequent war on terrorism have dramatically affected the international security environment. This has had immediate effects on the development of the ESDP, although the longer-term effects may not be clear for some time yet. However, there are other factors—some of which have been accelerated since September 11^th—that could have a major effect on the development of ESDP.

15. Among the geo-political developments that have occurred since our last report, we note the following. First, the relationship between the United States and Russia is evolving rapidly. Part of this results from a common interest in the international campaign against terrorism and a newfound desire to work in partnership in Afghanistan and other areas of Central Asia. However it also stems from apparent Russian acceptance that NATO enlargement and US plans to develop a missile defence system are almost certain.

16. The United States' strategic priorities have also evolved rapidly. A progressive reduction of their commitment from parts of Europe is now under active consideration. The announcement of Donald Rumsfeld, US Defense Secretary, that US forces might withdraw from Bosnia indicate that European governments will need to do more to provide for their own security, especially on the borders of Europe where US interests are not directly engaged.

17. Since the beginning of the presidency of George W. Bush, the US has followed a more assertive line in respect of missile defence and ballistic missile treaties.[8] Policies in favour of US withdrawal from the Anti-Ballistic Missile (ABM) Treaty of 1972 and steps towards creating a missile defence system have developed significantly over the course of 2001. Despite Russian, European and US domestic opposition it looks increasingly likely that the US will exercise its right to withdraw from the ABM treaty and that the development of missile defence will proceed.

18. The terrorist attacks on the United States have highlighted the possibility of threats to national security, the historically low levels of European defence spending, and the gap between European and US capabilities. What the new geo-political situation and the vast gap between US and European military capability mean for the ESDP are considered further in this report.

WHAT THE NEW GEO-POLITICAL SITUATION MEANS FOR THE ESDP

19. The European Union's Common Foreign and Security Policy (CFSP) will shape significantly the ESDP, and as a consequence it will evolve as the European Union further develops its external international role. Part of the EU's response to the campaign against terrorism—anti-terrorism measures and pan-European Union co-operation on extradition—is in the area of Justice and Home Affairs, and lies outside the terms of reference of the Sub-Committee which has prepared this report. However, it is clear that if the EU is to be effective, it will need to respond with determination to these challenges through a combination of diplomatic, economic and military capabilities including intelligence.

20. The EU's ambitions as defined by the governments of the EU were set out at the Helsinki European Council in December 1999. The 15 governments set themselves the task of being able to commit at any one time up to 60,000[9] troops within two months and to sustain them for a year by 2003. That will require a force of about 180,000. Such a force is intended to be able to conduct the Petersberg tasks, which are defined as "humanitarian and rescue tasks; peacekeeping tasks; tasks of combat forces in crisis management, including peacemaking". This is the Helsinki headline goal and it is a key objective that the ESDP should accomplish. It should be emphasised here that when engaged in any action, particularly at the more difficult end of the Petersberg tasks, it is the stated preference of the European Union that the ESDP should work alongside NATO, if necessary and if possible using NATO assets. We note that there is a limited number of NATO assets, but those of central importance are deployable command headquarters and planning capacity.

21. Nevertheless, a number of important ambiguities remain concerning the headline goal. It is not clear how far beyond the boundaries of EU member states we can expect the EU force to operate. For example, the Secretary of State for Defence, Geoff Hoon MP, was widely reported to have said "the EU must develop a full military force able to project power around the world" and that "attacks since September 11^th made it imperative to upgrade the EU's emerging rapid reaction force." Others have a more limited view of where ESDP might operate, suggesting it should operate on the immediate border areas of the European Union. The distance at which a European force might be expected to operate carries substantial implications, for example for the force structure and sea and air lift required, and for the operational logistical chain needed to sustain forces over time. Acquisition and development of these assets will be expensive.

22. Nor is it clear what could be done with such an EU rapid reaction force in terms of the level of conflict in which it can engage. In recent years, such as in the conflicts in Bosnia and Kosovo, NATO has been able to deploy forces with the support of the United States, who have provided crucial facilities such as heavy lift, communications and intelligence, much of which EU member states lacked. Nevertheless, there is considerable confusion over whether the EU would be able to undertake similar missions alone even when the Helsinki goals have been attained, and as pointed out by Professor Michael Clarke, Executive Director of the Centre for Defence Studies at King's College, London, "The sorts of operations in which the European Rapid Reaction Force might be engaged in the next five or six years almost certainly would have to involve NATO facilities." (Q110) At the upper limit of the Petersberg tasks, for example in respect of peace enforcement and peace making where force may be necessary to separate warring parties in a hostile environment and where such operations will require a full war-fighting capability, it is likely that NATO will be the only organisation capable of assembling a force able to conduct such a mission, and under these circumstances American support would be required. There may be a temptation, if the political need for an operation arises, to conduct an EU-led mission for symbolic purposes before the EU is ready to do so. What is imperative is that the EU must not lead an operation before it has achieved the full range of capabilities necessary to conduct it or can rely on the assistance of NATO.[10]

PREPARING THE ESDP FOR ITS NEW ROLE

23. At the European Council in Laeken, Belgium, in December 2001, the EU declared that an EU military capability was now "operational", some two years after the creation of the Helsinki headline goal and 12 months before the 2003 deadline that governments had set themselves. However, member state governments were realistic in recognising that there were important limitations to what an EU force might currently be capable of doing. In the next chapter we will deal with the challenges in developing a full EU military capability by 2003.

24. In taking stock of developments, first and foremost we note that that the pace of political progress has been rapid. Despite the failure to ratify the Treaty of Nice, which codifies the ESDP but upon which the initiative is not dependent, the ESDP has rapidly become part of the day-to-day business of the European Union. In March 2000, EU governments established an interim Political and Security Committee, a Military Committee and a small Military Staff located in the Council of Ministers, and many EU member states wish to create a Defence Council, comprising the 15 defence ministers, to provide greater political coherence and guidance to the work of these intergovernmental structures.

25. Nevertheless, despite considerable political progress, our witnesses were still unclear how four neutral members of the EU that are not members of NATO[11], two[12] which want limited involvement in ESDP, and the six non-EU European members of NATO[13], will co-ordinate their actions, especially if the EU needs access to NATO assets or operational headquarters. For example, Sir John Weston, former UK Ambassador to NATO and the UN, thought that this contradicted the idea of creating a coherent defence body, and suggested that the EU should be more accommodating to the needs and wishes of the 6 non-EU European NATO members than to those of the 4 non-NATO EU members. (Q229)

26. Whilst we welcome the expansion of NATO, especially for its political implications, we recognise that this will bring problems for NATO as a military organisation. Matters will become even more complex if the tensions caused by different institutional memberships are not appropriately handled during the next rounds of enlargement in the European Union and NATO. EU enlargement is expected to bring in up to 10 new members by the middle of this decade, and while some of them will make important additions to the manpower of the ESDP—although they may not make significant improvements to the military capability—few are yet members of NATO, and Cyprus poses its own particular security problems. NATO is expected to approve a further round of enlargement in Prague in November 2002. This will bring in several new central and east European countries, possibly including the Baltic states, but none are currently members of the EU. There remains a danger that the expansion of NATO will add little to defence capabilities within the organisation and may weaken its coherence. As a consequence of these two enlargements, the US may become more hesitant about consultation in a NATO of 25 or 30 members, which may not be the natural forum of choice for consultation and the conduct of military operations. This could adversely affect the EU-US relationship.

THE VIEW FROM EU MEMBER STATES

27. The ESDP is inter-governmental, and its progress is dependent on consensus and co-operation amongst member governments to establish aims and objectives and to meet them. The driving forces behind the ESDP have been Britain and France, and it was the Anglo-French declaration at St Malo in December 1998 that effectively made possible the launch of the ESDP at Helsinki one year later. Some witnesses, such as Iain Duncan Smith (Q14) and Sir John Keegan (Q53), Defence Editor of The Daily Telegraph, suggest that the ESDP is driven primarily by the French government, and that by embracing a European Union solution to future defence structures, the United Kingdom has changed its policy from its previous concentration on the Atlantic alliance. Other witnesses[14] see no contradiction between a commitment to both ESDP and NATO, provided the initiative delivers an enhancement to real military and civilian capabilities of value both to the ESDP and NATO.

28. France is of critical importance in any future European defence arrangements. Like the United Kingdom it has the capability of projecting limited military power, it is one of the few EU governments to spend more than 2 per cent of its GDP on defence and it has a permanent seat on the United Nations Security Council. There may however be important differences concerning the initiative within the French establishment. There is a school of thought, according to which the French Foreign Ministry are inclined to promote the importance of developing a defence capability autonomous from NATO, whilst the French Ministry of Defence accept that an autonomous ESDP requires the development of new military capabilities not currently available and acknowledge that using a NATO headquarters and drawing on NATO assets will be central to the success of any future EU-led military operation.

29. In spite of these possible differences of opinion within the French establishment, the idea of creating an autonomous military headquarters structure for the European Union along the same lines as SHAPE in the short or medium term was not considered viable by any French officials who spoke to this committee. Their overwhelming view is that SHAPE, commanded by the Deputy SACEUR—who is always a European—or another EU national headquarters should be used for EU-led military operations. Currently there are two national centres which might carry out this role, the United Kingdom's Permanent Joint Headquarters at Northwood, Middlesex, and the French equivalent at Creil, near Paris.

30. Over the last decade consecutive German governments have focused on the challenge of re-unification and have been unwilling to commit as much of a share of their GDP to military spending as Britain and France. However, since the end of the cold war and the collapse of Yugoslavia, we note that Germany has taken very important steps towards playing a full international military role with its European partners. German willingness to deploy ground troops, which was legally sanctioned and confirmed by the 1994 decision of the constitutional court, is clearly important. In 1998 over one thousand German troops were stationed in Macedonia and a German General commanded all the KFOR troops deployed in Kosovo; more recently, the German government has deployed 300 troops in Afghanistan. The German government is also funding the development of a national headquarters at Potsdam, near Berlin, that should be capable of running an EU-led military operation, and the development of a German rapid reaction force will be of great assistance to future EU-led operations. We welcome the decision by the German government to create a rapid reaction force of 150,000 troops who will be volunteer forces capable of deployment on Petersberg tasks without any restrictions. General Klaus Naumann, former Chief of Staff of the German Federal Armed Forces and Chairman of the NATO Military Committee, told us:

"The present government has tripled the number of these readily deployable forces… It will take Germany another five or so years to get 150,000 members of this ready reaction force deployable at short notice and ready, but then they will be available." (Q455)

31. Nevertheless, the question of increasing defence spending to fund new capabilities remains to be resolved. General Naumann noted;

"Conscription is no longer an impeding factor. What is lacking in the German case at present is still the necessary modernisation of equipment and on that we are back to the money issue." (Q455)

—  In 2000 the German government spent only 1.6 per cent of its GDP on defence, compared with 2.6 per cent for France and 2.4 per cent for Britain. The restructuring of the Bundeswehr is now underway and whilst a modified form of conscription will be retained, the process of modernisation will still be expensive if German forces are to be able to make an appropriate contribution to Petersberg type missions. Increasing spending will be difficult, not least because of the current economic climate, but it will be essential if Germany's armed forces are to become more deployable. In December 2000 some 7,693 troops, less than 2 per cent of all German forces, were deployed outside German borders compared with 36,459 United Kingdom troops outside United Kingdom borders, which represent 17 per cent of United Kingdom forces.[15]

32. Decisions in Berlin will be central to the overall success of the ESDP initiative. An increase in spending will therefore be necessary for the German government to play its full role in developing an EU military capability. In evidence to the Committee General Naumann commented,

"It is not easy for me to say this but most of the European efforts have been hampered by the bad examples set by Germany. If the biggest European country is cutting defence spending in such a way as Germany has done, you cannot expect others who are not as wealthy as Germany to spend more on defence." (Q440)

—  General Naumann suggested that the tide may be turning and that "there is a general recognition that Germany has to do more" (Q440). This change in attitudes in Germany is to be welcomed, but political sentiment now needs to be turned into increased expenditure and enhanced capabilities.[16]

33. Across the EU, governments have carried out their own defence reviews and most have announced their intention to end conscription. As a consequence of these reviews (and besides the United Kingdom, where conscription ended some 40 years ago) it has only been completely phased out in France and the Benelux countries. Of the EU's national armed forces in December 2000, 533,216 conscripts still remained compared with 1,693,609 regulars[17]. But, more important, defence expenditure has been falling almost constantly since the end of the cold war and, according to the IISS, only two countries—Greece and Ireland—have witnessed an increase in constant dollars between 2000 and 2001.

34. It is too early to reach any firm conclusions concerning defence expenditure and it remains to be seen how the effects of September 11^th will affect future defence spending decisions, and, indeed, the interpretation of the Helsinki goals. As important as how much governments spend is what they spend it on. We will look in depth at capabilities in the next chapter, but as the Secretary of State for Defence reminded this committee[19], the ESDP is about improving real capabilities. Any judgement on progress must be made on the basis of whether governments have taken practical steps to develop these capabilities in meeting the Helsinki headline goal.[20]

THE VIEW FROM THE USA—BEFORE SEPTEMBER 11^TH

35. The success of the ESDP will not just depend on the actions of the EU member states. The ESDP needs American political and military support for military operations for the foreseeable future at the top end of the Petersberg tasks.[21] However there remain differences of opinion between the EU and the US as to the future direction of the initiative. Prior to the St Malo Anglo-French Summit in December 1998, the US government supported any development of a European capability only if it were located inside the transatlantic alliance as a European pillar of NATO. The decision by EU governments in December 2000 to create an EU military capability outside NATO structures has created some tensions over the planned force in order to resolve this, and as put by Professor Clarke, "the trick for the Europeans is to show enough evidence of greater European capacity but also enough evidence of dependence on NATO to keep the present transatlantic balance where it is." (Q131).

36. The US government's reaction to ESDP, as formulated by the former Secretary of State, Madeleine Albright, was that Europe, while welcome to develop its own security and defence arrangements, should be careful to avoid what became known as "the three Ds"—discrimination against non-EU European NATO members, duplication of effort or capabilities and decoupling of European security from the USA and Canada. This approach, set out under the Clinton administration, remained after the election of President George Bush, and American goodwill towards ESDP will rest upon the EU maintaining a commitment to NATO and at the same time increasing capabilities. As noted by Sir John Keegan, "if the European military capability develops into something effective it cannot possibly offend the Americans because it will, as long as Europe and America remain on friendly terms, further America's interests as well as Europe's interests. What I think is to be avoided is creating a military structure which is not very efficient and seems to exist simply to demonstrate Europe's apartness from America" (Q83).

37. Through NATO, the Bush and Clinton presidencies have actively encouraged European governments to increase their defence spending and enhance military capabilities so that EU governments can provide for their own security and play a full role in the international community. NATO's own attempts to improve military effectiveness through the Defence Capabilities Initiative have delivered only very modest enhancements, with official estimates that only 50 per cent of the force goals would be achieved within the timescale envisaged. The ESDP and the Helsinki headline goal form an alternative means to enhance capabilities for multilateral operations when NATO as a whole is not engaged.

THE VIEW FROM THE USA—AFTER SEPTEMBER 11^TH

38. After September 11^th the relationship between European governments and the United States changed in many respects. The invoking of Article 5 by NATO members indicated solidarity and a collective determination to contribute to the international campaign against terrorism. The American response, however, to the attacks on its sovereign territory gave little room for doubt that the US was prepared to act unilaterally. As misgivings were expressed in some European capitals on the type of military campaign, the Bush administration made clear that it considered that consultation with EU governments on matters of American interest was a nicety and not a necessity, and hence its decision to conduct the war using its national command structure and not that of NATO. Furthermore, new US geo-political priorities indicate less willingness in future to focus on crises like those in the Balkans. Should a new conflict develop in Europe, EU governments might not be able to call upon direct American support. Finally, the military action taken to remove the Taliban government in Afghanistan showed that the US chose to take up few European offers.[22] As General Naumann commented, European support for the US through the invocation of Article 5 was:

"The strongest possible expression of solidarity they could show. The downside from my perspective is that our American friends never used the possibilities of Article 5, which they could have used."(Q443)

—  European forces were ill prepared for this type of conflict, showing that the Afghanistan military campaign lies far beyond current European capabilities. Among other capabilities these shortfalls include European air-to-air refuelling component forces and surveillance and target acquisition capabilities.

39. We therefore note three important aspects of an evolving EU-US relationship. First, new US geo-political priorities suggest EU governments can no longer assume American military support when US interests are not directly engaged. As a consequence there will be mounting pressure on EU governments to develop their own military capabilities.[23]

40. Secondly, the US government cannot expect increases in European defence expenditure and simultaneously resent the implications of this. When crises occur, both European and American policy-makers will need to remain committed to consultation with their allies and accept the value of transatlantic and EU multilateral frameworks for foreign and security policy. This may require a qualitatively new dialogue between the EU governments and the US administrations.[24]

41. Thirdly, it would be extremely damaging to the EU/US relationship if the ESDP initiative created new institutions, from which the US were excluded, with no real development of new European military capabilities.[25]

THE POSITION OF TURKEY

42. Current arrangements suggest that non-NATO members of the EU have been well catered for in the ESDP. Though not members of NATO, Swedish and Finnish defence staff play an active part in the ESDP and the Military Committees, the first chairman is a Finnish general, and Austrian and Irish representatives also participate in the EU's new military structures. By contrast the rights of the non-EU members of NATO appear less well considered. It should be recognised that Norway and Iceland have accepted their associate status of ESDP, and Hungary, Poland and the Czech Republic may soon be members of the EU. However Turkey, an important member of NATO and the longest standing applicant for EU membership, remains to be convinced that developing a military capability through the EU rather than NATO will not disadvantage Turkish interests.

43. The Turkish government is not opposed in principle to the ESDP: as put to us by their Embassy:

"In the last two years, Turkey has continued to support the idea that Europeans should assume a greater role and responsibility in the security of the continent in a way that would contribute to the trans-Atlantic Alliance. This has been made clear, among other things, through Turkey's offer to contribute to the EU's Headline Goal with a brigade size force supported by sufficient air and naval elements." (p186)

—  The government of Turkey has, however, set out a number of concerns about the development of the ESDP. First, it has significant strategic interests in most of the geographical areas where it is envisaged that an EU force might be deployed, and it is anxious that the Turkish government should be allowed the opportunity to contribute fully and to be consulted. Second, as the longest standing candidate for membership of the EU, Turkey is not inclined to cede any power to an organisation that includes Greece (and potentially, Cyprus) but not itself. Third, the Turkish government wants permanent involvement in all EU ESDP decision making and to have a guaranteed right to participate in all operations, whether autonomous or using NATO assets and capabilities, in pre-designated crisis areas which directly affect her national security. The Turkish Embassy told us that:

"Turkey continued to maintain the view that all non-EU European allies should be fully involved in European Security and Defence arrangements and that transparency, inclusiveness and indivisibility of security ought to be the basic principles that should be upheld in developing ESDP. In this connection, Turkey maintained the view that strong trans-Atlantic links and close relationships between the EU and NATO were prerequisites for an effective European security architecture." (p186)

44. It will be necessary to arrive at a solution that is satisfactory for Turkey for other reasons. As put by Sir John Weston,

"Turkey is the country that supplies the largest standing army within continental Europe and it is also the only European NATO ally that has a strong tradition of Islam in its historical and psychological background. It seems to me therefore that the position and the views of Turkey deserve greater, not less attention in the current context." (Q227).

—  Furthermore, Turkey is located at the joining-point of the European and Asian continents and it can play a significant role in a range of EU-led military operations. The Turkish government's attitude to ESDP is therefore absolutely central, and not least because it has a potential power of veto over EU access to NATO assets in the event of an EU-led military operation.

45. There are some reports that the substantive issues have been resolved to Turkey's satisfaction, but that Greece is now unhappy with the agreements soon to be reached between the EU and Turkey. As put by the Turkish Embassy:

"As a result of negotiations between Turkey and the United Kingdom, a compromise solution was achieved on the issue of the participation of non-EU European allies in EU operations. However, the EU has failed to approve this solution during the Laeken Summit in December 2001 due to the position of one member. We remain hopeful that the EU will adopt the negotiated text as it is with a view to furthering the development of NATO-EU co-operation on ESDP." (p186)

• It is understood that Turkey has been assured that the ESDP will not be used in respect of any action involving Cyprus, but that has become a sticking point with the Greek government. Particularly, in view of Turkish capabilities in the military sphere, it is essential that the Turkish issue is resolved quickly and to the satisfaction of all parties. This is one of the most urgent tasks facing the British and other EU governments, and it is vital that disagreements do not prevent the emergence of an effective ESDP.[26]

9   A force of 50-60,000 persons is not at all modest. To sustain such a force for one year requires, with rotation, the availability of a force three times that size, in other words 150-180,000 persons. It will also rely on significant operational logistical support from naval and air forces to ensure deployability within 60 days. Back

10   Conclusions paragraph 86. Back

11   Austria, Finland, Ireland and Sweden. Back

12   Denmark and Ireland. Back

13   The Czech Republic, Hungary, Iceland, Norway, Poland and Turkey. Back

14   See, for example, Duke (p135), FCO and MoD (p45) and Monar (p185 ). Back

15   Source: The Military Balance 2001-2002, International Institute for Strategic Studies. The total number of German armed forces is 449,400, of which 128,400 are conscripts. The United Kingdom has 212,450, of which none are conscripts. Back

16   Conclusions paragraph 87. Back

17   Source: The Military Balance 2001-2002, International Institute for Strategic Studies. Back

18   Source: ibid. Part of the decrease will have been caused by the strengthening of the dollar in this period. However, even in constant 2000 local currency terms, 6 countries will see a decrease in defence expenditure: Austria, Finland, France, Germany, Netherlands and the United Kingdom. Back

19   See paragraph 50. Back

20   Conclusions paragraph 86. Back

21   Conclusions paragraph 90. Back

22   The US chose to take up the offer of 5 AWACS reconnaissance aircraft, manned by crews from 11 European NATO member states and Canada. Back

23   Conclusions paragraph 85. Back

24   Conclusions paragraph 90. Back

25   Conclusions paragraph 90. Back

26   Conclusions paragraph 89. Back