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Paying for EU crisis management

01 May 2002

Europeans spend much less than Americans on defence but are quite ready to engage in crisis management in so far as it entails a strong commitment to peace-building, especially (but not exclusively) in their immediate neighbourhood. Their political, financial and military presence in the Balkans - under different flags - is a good case in point. Comparing EU and US military budgets is therefore misleading and to a certain extent unfair: the Union's general inadequacies and specific shortfalls should be measured primarily against its declared goals and ambitions. Such a proviso, however, does not necessarily make things easier, in particular if one looks at the difficulties the Fifteen have had recently in financing the forthcoming EU police operation in Bosnia, a comparatively small and relatively 'soft' mission, and in an area close by.
The EU Treaty hardly helps. The current provisions on CFSP (Art. 28), in fact, make a distinction between 'administrative' expenditure - to be charged always to the EC budget - and 'operational' expenditure, also to be charged to the EC budget (unless the Council unanimously decides otherwise) but with a caveat: operations 'having military or defence implications', in principle, are expected to be charged to the member states in accordance with the GDP scale. This means that the operationality of ESDP is left entirely to the discretion, goodwill, and generosity of individual countries, which also have the option of abstaining 'constructively' (Art. 23) and thus not paying for common missions. If EU crisis management is to become more credible and effective, it needs to change and adapt its internal policy incentives.
On the strictly operational side, the peculiarity of ESDP - as compared to the 'old' CFSP (all-civilian) and NATO (all-military) - is that its foreseeable operations entail a mix of civilian and military tasks. On the one hand, the notion of 'administrative' expenditure can be interpreted quite broadly, encompassing e.g. such preliminary steps as fact-finding missions, pre-planning, and several civilian aspects. Resorting to the EC budget also enhances legitimacy and democratic accountability. To this end, however, the CFSP budgetary line especially should be significantly increased: if not right away, then in the budgetary period 2007-13.
On the other hand, there will always be a problem of availability and readiness. If human and financial resources for EU operations have to be mobilised on an ad hoc basis and primarily (and above all voluntarily) by member states, the Union's political engagements will inevitably be subject to domestic contingencies. If costs 'lie where they fall', as in the formula adopted by NATO, EU operations may translate into an array of different coalitions of the willing (and financially able) determined, once again, by the specific circumstances. That, in turn, might impinge on decision-making, shifting the actual control of operations to the 'Committee of Contributors' and potentially increasing the civilian-military dichotomy. On top of that, if more or less the same countries always offer money and personnel (if any), they may end up demanding a special status, similarly to what happens in the UN with the permanent members of the Security Council. And this is against the spirit of the Treaty, unless it takes the form of 'enhanced cooperation' and Art. 27 of the Nice Treaty is revised accordingly. The NATO formula could therefore be kept as an additional option for EU operations - especially for the military personnel involved - rather than a general rule.
For its part, the Union should test a concept more in line with its nature, one capable of promoting commonality and solidarity while also addressing the 'burden-sharing' issue: in financial terms (key of contributions), in human terms (forces made available) and in the combination thereof. Given the prevailing hostility among member states to granting the European Parliament a droit de regard on ESDP operations, the Fifteen could envisage setting up a common fund to be financed annually and managed by the Council Secretariat. If it proves effective, it could be inserted in the EC budget later on. Such a fund could cover the common civilian and military costs of mounting EU operations: logistics, infrastructure, local procurement, in-theatre headquarters. It could include both 'start-up' expenditure (to be reimbursed) and running costs. In principle, if UN and OSCE experience is any guide, it could even cover the per diem of the civilian and military personnel on the ground. Its overall annual size could usefully be linked to the foreseeable costs of the Helsinki and Feira Headline Goals (both entail operations of 'at least one year') in order also to build on agreed policy and articulate it further.
Finally, not being an integral part of the EC budget, such a fund could deviate somewhat from the GDP scale of contributions that seems to create so many problems these days. There is already a precedent for the Union's external action, namely the European Development Fund, whose key is marginally different and periodically adjustable. In fact, it takes into account the willingness of some member states to pay a bit more than their due, thus partially relieving the bigger contributors or those who are in a difficult financial situation: the same, incidentally, happens with the OSCE operational budget. If this principle of marginal adjustment is accepted, it could usefully be applied to EU operations by factoring in the degree of actual participation of member states (in either civilian or military terms, or both). In other words, those who participate relatively less would pay a little more into the common budget, and vice versa. Of course, fair criteria should be set for such assessment and extreme situations (only payers or only participants) avoided. In perspective, this principle of 'mixed pooling' could also be extended to the participation of third countries in EU-led operations.