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Why Europe is finally taking joint arms procurement seriously

Good morning. It was a busy weekend in Munich as the world’s defence and security community digested almost a year of horrendous war in Ukraine, an increasingly tense US-China relationship and three ballistic missile tests by North Korea. What a time to be alive.

Plus, Poland’s president Andrzej Duda used an interview with the FT’s editor Roula Khalaf to demand Nato countries give Ukraine security guarantees, on the eve of US president Joe Biden’s visit to Warsaw tomorrow.

Today — I’ll unpack one of the main European debates at the powwow that will continue at a meeting of EU foreign ministers today, while my colleague explains why the Netherlands has kicked out a fresh batch of Russian spies diplomats.

Shared responsibility

It has taken almost 12 months of full-blown war on its border, but the EU is finally seriously discussing efforts to pool defence capabilities.

Context: Providing weapons to Ukraine to defend against Russia’s invasion has drained Europe’s armouries and exposed its defence industry as woefully unable to meet the demand of a sustained, full-scale conflict. That has called into question how Europe both supplies Kyiv in the long term and rebuilds its own defences.

Governments have committed more cash. The issue is how they will spend it. Josep Borrell, the EU’s foreign policy and security chief, says member states will spend an additional €70bn on defence in the next two years.

But European countries, protective of jobs and domestic capabilities, are awful at sharing defence contracts.

“The problem is that if we do it with everyone in [their own] corner . . . without any kind of co-ordination, we will increase our duplications and we will not fill our loopholes,” he said yesterday in Munich. “So, spend more? It’s on the way. Spend better by spending together? Still not.”

Plans are afoot. Estonia has circulated a proposal to form a consortium to jointly buy 1mn artillery shells for Ukraine (cost: €4bn). Tallinn sees it as both a proof of concept for other weapons, and a wake-up call for allies that still don’t understand the new reality.

“It seems to me that some of the countries still have the hope that [defence needs] will go away,” said Kaja Kallas, Estonia’s prime minister. “We will give everything to Ukraine now, and then let’s draw the line and stop this because it is too expensive.”

Other countries have voiced support for her artillery idea, and EU foreign ministers will discuss it today in Brussels.

European commission president Ursula von der Leyen used her Munich airtime to urge joint defence procurement and “standardised products”, comparing it to the joint vaccine approach to Covid-19. The commission has allocated some funds to incentivise joint arms deals, but €500mn doesn’t go very far on the market.

“What has to happen in the periphery of Europe to take defence seriously?” asked Radek Sikorski, a Polish member of the European parliament. “If we don’t start right now, we will still be defenceless in ten years time.”

Chart du jour: Shutting shop

The number of EU businesses filing for bankruptcy hit the highest level for at least eight years in the fourth quarter of 2022, led by a surge in Spain, as struggling “zombie” companies kept afloat by government aid during the pandemic start to collapse.

Spy game

While the world fixates on the new phenomenon of surveillance balloons, it is easy to forget that much espionage remains old-fashioned: intelligence officers running sources, writes Andy Bounds.

That’s not lost on the Dutch. The Netherlands this weekend announced it had decided to expel “about 10” Russian diplomats in the latest instalment of a near year-long spy row.

Foreign minister Wopke Hoekstra said he had run out of patience with Moscow trying to send agents under diplomatic cover while refusing to issue visas to Dutch envoys.

It follows tit-for-tat expulsions in March last year, when the Dutch kicked out 17 Russians and Moscow responded with 15 Dutch diplomats.

“Despite numerous attempts by the Netherlands to find a solution, Russia continues to try to get intelligence officers in the Netherlands under diplomatic cover,” said Hoekstra.

So he has decided to cut the Russian presence in The Hague down to some 50 staff, the same number as the Dutch have in Russia.

As a result, Moscow’s trade office in Amsterdam must be shut tomorrow, and the personae non gratae must leave within two weeks.

They are the first expulsions since a spate early in the war, when Belgium, Bulgaria, Ireland, Slovakia and others joined the Netherlands in throwing out alleged Moscow spooks.

Dutch intelligence also detained four alleged Russian agents in 2018 for trying to hack into computers at the Organisation for the Prohibition of Chemical Weapons.

What to watch today

  1. US president Joe Biden travels to Warsaw.

  2. Meeting of EU foreign ministers in Brussels, joined by Ukraine’s Dmytro Kuleba and Moldova’s Nicu Popescu.

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