After Trump and Brexit, EU to launch defense research plan

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Part of a broader push to revitalize defense cooperation, the European Commission will propose a defense fund and seek to lift a ban on the EU's common budget and its development bank investing in military research.

The main proposal, to be presented at around 12 p.m. (1100 GMT), is an investment fund for defense, which could allow EU governments that pay into it also to borrow, ensuring funds are always available for joint defense programs such as helicopters or drones.

A technician works on a German Tornado jet at the air base in Incirlik, Turkey, January 21, 2016. REUTERS/Tobias Schwarz

The fund, which could start on a small scale in 2017, could be backed by the European Investment Bank to finance projects if governments agree to remove the ban on backing military projects.

With the Commission overseeing a common EU budget of about 150 billion euros ($160 billion) a year, France and Germany say it is time to allow it to be used for military research. 

The European Parliament has approved a 90 million euro pilot plan for 2017 to 2019 and the Commission could potentially allocate 3.5 billion euros from the budget between 2021 and 2027, officials say.

Defense research spending by EU governments has fallen by a third since 2006, leaving the European Union reliant on the United States for advanced warfighting equipment.

During the U.S. election campaign, Trump questioned whether the United States should protect allies seen as spending too little on their defense, raising fears that he could withdraw funding for NATO at a time of heightened tensions with Russia.

France and Germany rely on aging military transport planes, for example, while some navy helicopters have been grounded because of technical faults related to long years of service.

A report by the German military seen by Reuters on Tuesday showed its Tornado jets had a readiness rate of just 44 percent and its newer Eurofighters were ready for use 52 percent of the time, well under the goal of an average 70 percent readiness.

"Europe has to be very careful that the investment gap is not translated into an ever wider technology gap," EU foreign policy chief Federica Mogherini told defense contractors and officials at a speech earlier this month.

"If left unchecked, this could translate into a political gap which would clearly not be in our interest," she said, referring to a potential loss of the EU's foreign policy clout.