B&K Newsletter: European Defence Headache

Busy week in Brussels. Let’s put some order into the main discussions on the agenda. Enjoy!

European Defence Headache

Leaders from the 27 are gathering in Brussels to discuss ways to speed up (meaning, who pays what) the European defence system.

Donald Trump’s potential return to the White House, but most importantly, the?perspective?of a Russian attack on a European NATO member by 2026, seems to sound like a wake-up call for European capitals.

Paris, Warsaw, and Tallinn have formed an unusual coalition to push for issuing?another round?of joint EU bonds. The experiment worked in the aftermath of the Covid-19 pandemic (remember?), especially considering the fast-tracked procedure it would require.

The critical concern here is urgency: Europe can’t wait until negotiations begin next year over the EU’s next long-term budget to start spending serious money to beef up defences, considering that the alternative would be to leave Kyiv without European ammo and show extreme weakness and indecisiveness towards Russia.

On the other side, the European Commission is?proposing?that 90 per cent of the windfall profits generated by frozen Russian assets should be used to buy arms and ammunition for Ukraine, while 10 per cent would provide non-military support.

The key issue is not allowing the next European elections in June to be the excuse to kick the can down the road. The European Union needs to guarantee continuous support to Kyiv while simultaneously rolling down a long-term defence project in practical and financial terms.

Meanwhile, on Wednesday, the leader of Europe's largest munitions manufacturer grabbed attention by?proposing?a new short-range air defence mechanism akin to Israel's Iron Dome system, which has been operational since 2011.

The push for a missile defence shield is reigniting a contentious discussion within European security circles, underscoring the persistent divisions among EU leaders regarding long-term security strategies. While the Union has?committed?to establishing "capabilities related to integrated European air and missile defence" by 2035, disputes over funding, system selection, and deployment strategies persist, adding complexity to Europe's deliberations on collective defence.

Time is gentleman, but not in wartime.

EU Size Up

Another topic on the agenda of this week’s European Council is enlargement. Leaders are expected to move to?open?accession negotiations with Bosnia and Herzegovina.

Most interestingly, it is likely that in the conclusions of the EUCO, there will be some mention of the methods leaders want to adopt for the enlargement process in the forthcoming years: Germany, Portugal, and France have recently proposed a “gradual integration”, meaning that countries that want to join the block must adopt EU’s policies before full membership. This seems to be this Commission’s favourite proposal, as stated in the report on pro-enlargement reforms.

Additionally, the proposal to move away from the unanimity voting requirement bogs down foreign and tax policy decisions will be on the table. However, its presence in the conclusions is less granted.?

Atomic Revival

To add more traffic jams in the European capital, at least 20 government officials, 37 political delegations and scores of nuclear executives will gather in Brussels today for the most significant?push?yet to revitalise atomic power in Europe — and to campaign for EU financing in the next term.?

The location is not casual: the Atomium, the modernist building initially conceived in 1958 as the centrepiece of the Brussels World’s Fair.

Led by Prime Minister Alexander De Croo of Belgium and Rafael Mariano Grossi, Director General of the International Atomic Energy Agency (IAEA), the Summit marks the highest-level gathering dedicated solely to nuclear energy discourse.

This Summit follows the landmark decision to incorporate nuclear energy into the Global Stocktake at the UN Climate Change Conference (COP28) in Dubai in December 2023, where there was a call for expediting its implementation alongside other low-carbon energy sources. It will offer Heads of State and Government from participating nations a platform to articulate their perspectives on the pivotal role of nuclear power in achieving net zero emissions and advancing sustainable development, including outlining national strategies to harness its potential fully.

In light of the recent launch of the IAEA’s Atoms4NetZero initiative, the Summit features panel discussions involving experts elucidating how innovation bolsters nuclear energy's competitiveness, utility, and sustainability.

As a reminder, in 2021, European Commission leader Ursula von der Leyen made waves with her assertion that the EU required nuclear energy as a "reliable source" of power, subsequently designating it as one of its "sustainable" investments. By early 2023, France had formed a "nuclear alliance" comprising twelve EU member states, including Poland, Bulgaria, Finland, and the Netherlands, to influence policy decisions.

This initiative has seen significant achievements thus far. In June of the previous year, Paris successfully advocated for an amendment to EU renewable energy regulations to acknowledge nuclear power as a means of producing low-carbon hydrogen. In December, EU nations and legislators reached an agreement on public assistance for investments in existing nuclear facilities, followed by another agreement in February to incorporate nuclear energy into legislation streamlining procedures for "net-zero" emission technologies. Additionally, Brussels integrated nuclear energy into its roadmap for achieving its 2040 climate objectives, and in February, it launched an industrial coalition to expedite the development of small modular reactors (SMRs).

With approximately 100 reactors currently operational across twelve countries, nuclear energy contributes to about a quarter of electricity generated in the EU and nearly half of its carbon-free energy. Around 60 reactors are in various stages of planning or construction, with one-third of them located in Poland. Massimo Garribba, deputy director-general of the European Commission's energy department,?remarked?at a conference on Monday that he had observed a "shift in attitude" among EU members over the past 18 months.

"They have become more vocal," he stated, "and have also collaborated to establish an agenda." The French-led nuclear alliance asserts that the current momentum must be translated into a comprehensive and supportive European framework for nuclear development, including financing. Its members advocate for nuclear and renewable energy to be placed on an equal footing without discrimination in the EU's objective of achieving carbon neutrality by 2050. The alliance aims for this equality to extend to European Investment Bank funding, the "Hydrogen Bank" funding mechanism established to promote sustainable hydrogen, and any revisions to EU renewable energy regulations.?

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