What was the decision?

The European Council “agreed on the need to launch” a mechanism called permanent structured cooperation (PESCO) as set forth in the Treaty of Lisbon (2007). It allows deepening of defence integration by a group of Member States. This could start by the end of 2017 after EUCO decided that within the next three months, willing states can negotiate the conditions to launch PESCO. This is a breakthrough because until now there has been little appetite in the EU to implement it, mostly because of the fiscal crisis, which forced governments to deeply cut their defence budgets and increased anxiety about deepening defence integration in the EU. As a reaction to Brexit, deepening political divisions in the Union, and growing tensions in transatlantic relations, Germany, France, Italy, and Spain—supported by EU institutions—started in 2016 to promote the idea of launching PESCO.

What is PESCO?

The Lisbon Treaty provides that PESCO be open to all Member States that have some record in European defence cooperation (such as taking part in the EU battlegroup system). These states need to be ready to increase their armament acquisition budgets, better harmonise defence planning, and deepen their practical military cooperation. The latter equates to establishing new joint military capabilities and cooperative armament investment programmes, increasing the interoperability of existing forces, and tightening cooperation in logistics or training. It is widely expected that PESCO could deepen and intensify defence cooperation in the EU: only a small group of Member States will cooperate, which is meant to make it easier to agree on common initiatives. Further, programmes run in the PESCO format will benefit from privileged access to the European Defence Fund.

Is PESCO “multi-speed” security?

Its very design makes PESCO a defence core within the EU. A number of Member States will not be a part of it. To avoid the perception of an even more divided EU (as Germany suggested it might), EUCO confirmed its view that PESCO needs to be “inclusive and ambitious,” that is, it should engage more Member States than fewer while delivering concrete results. Realistically, both are not possible. The Member States that support PESCO the most could easily build an informal defence core. They would run the most important defence cooperation programmes and industrial projects and practically govern PESCO, using the participation of others as a source of legitimacy. To avoid that scenario, negotiations must take place on criteria for participating in PESCO and on its governance principles, with the aim to ensure the equality of Member States in determining the vectors of cooperation, particularly with regards to capability development programmes.

What will the launch of PESCO mean for EU security and defence policy?

To formally launch PESCO following the negotiations, a decision is required by a qualified majority of EUCO. If this happens, PESCO’s significance in the short term will still be only political. It would be a signal that the EU is overcoming the crisis of division and continuing the European integration project. Concrete results (such as new military capabilities) would appear only much later, simply because implementing defence cooperation initiatives takes time. An immediate challenge, bearing the potential for further conflict in the Union, is determining the relationship between PESCO and the Common Security and Defence Policy (CSDP). The Member States that ultimately remain outside PESCO are likely to try to maintain influence on the latter mechanism, as well as propose new initiatives (such as operations or missions) within the broader framework of CSDP (not PESCO). Another problem will be setting principles of PESCO cooperation with the UK after Brexit as well as with Norway and Turkey, both of which cooperate with the EU within CSDP.

What effect might deepened defence cooperation in the EU have on NATO?

With increased tensions in U.S. relations with Germany and France, PESCO is already presented by the latter two countries as way to build European strategic autonomy given uncertain American security guarantees. This  rhetoric, as well as attempts to use PESCO as an excuse for not meeting the NATO 2% of GDP defence pledge, and in particular a lack of synchronization between PESCO and the NATO Defence Planning Process, could all together greatly undermine the political cohesion of the Alliance. However, if PESCO is closely linked to NATO goals in terms of military capabilities and presented as a European response to the American calls for more transatlantic burden-sharing, the Allied defence and deterrence policy could easily benefit from the European efforts.