(a)

responding to the changed security environment, the vast majority of pMS have continued to increase their defence expenditure, leading to a 10 % defence expenditure increase in 2023 compared to 2022. Further increases are foreseen in 2024, with defence expenditure projected to rise by 16 %, reaching an 1,9 % of EU GDP. Approximately half of pMS spend more than 2 % of their GDP on defence, also meeting the relevant NATO guideline, where applicable. Most pMS have also spent at least 20 % of their total defence budget on defence investment, thus reaching the level set in the collective benchmark established by EDA Ministerial Steering Board in 2007. The Council therefore notes that the two relevant commitments can be considered largely fulfilled in the initial phase of PESCO.

Despite an overall increase of 28 % in EU defence research and technology investment in 2024, most pMS contributions towards reaching the collective benchmark remain below 2 %, with an overall 1,6 % of total defence expenditure. The pMS have been spending more, but not more together: the increased defence expenditure and investment have not been translated into more collaborative projects. Joint procurement activities and new instruments and legislative proposals at Union level, such as the Regulation establishing an instrument for the reinforcement of the European defence industry through common Procurement (EDIRPA) and a Regulation proposed by the Commission ‘establishing the European Defence Industry Programme and a framework of measures to ensure the timely availability and supply of defence products’ (EDIP), could help reverse this tendency, thus supporting the achievement of the European collaborative defence equipment procurement (35 %) and European collaborative defence R&T (20 %) benchmarks established by EDA Ministerial Steering Board in 2007. The Council recalls that boosting research, technology, development and innovation, as well as acquisition, particularly in cooperation among pMS, should remain a priority for the pMS, while striking the right balance between long-term innovation for future capabilities and adequate quantities of military equipment and stockpiles, also with a view to strengthening the European Defence Technological and Industrial Base (EDTIB).

(b)

the pMS have demonstrated improvements in the use of the EU capability development tools and initiatives as references in national processes, and most have demonstrated interest in exploring their best use to support their efforts in the future. As numerous pMS acknowledge that the 2023 EU Capability Development Priorities are in line with their national priorities, this alignment could result in an enhanced cooperation in addressing commonly identified EU capability gaps, while contributing to national needs, and NATO priorities, for those Member States which are also members of NATO. The Council recalls that pMS are encouraged to make full use of the EU prioritisation tools and initiatives, notably the EU Capability Development Plan (CDP) which serves as a central reference for EU capability development, taking into account the Headline Goal Process, as well as recommendations of the Coordinated Annual Review on Defence (CARD) to inform national planners. This is supporting the pMS’ efforts towards making their defence plans converge, where possible. The Council recalls that coherence of output between, on the one hand, the CDP and the CARD and, on the other hand, respective NATO processes such as the NATO Defence Planning Process has been and will continue to be ensured where requirements overlap, while recognising the different nature of the two organisations and their respective responsibilities and memberships.

(c)

the pMS have been committed to the implementation of the EU Rapid Deployment Capacity (EU RDC), a key deliverable of the Strategic Compass, with a view to reaching the EU RDC’s full operational capacity by 2025. The pMS have further contributed to filling the Battlegroups Roster, and have declared additional national modules to the Comprehensive Database, and many of them took part in the first EU live exercise, supporting the preparation of the EU RDC, in 2023. The Council welcomes the overall progress made and stresses the importance of pursuing efforts to sustain this positive trend through continued commitments to the EU RDC. The Council also encourages pMS to consider taking on the responsibility as framework nation for the EU Battlegroups. In parallel, in light of the critical gaps that most CSDP missions and operations were facing, it calls on pMS to urgently step up their contributions, while keeping in mind the single set of forces principle. All of these efforts will contribute to further increasing interoperability, readiness, and operational effectiveness. The Council also welcomes the finalisation of the re-assessment of the scope and definition of the common costs of military CSDP missions and operations, military exercises, and the EU RDC, and the resulting amendment of the EPF Council Decision. Regarding the Headline Goal Process, the Council encourages pMS to enhance the contributions to the Force Catalogue with all deployable national capabilities and to better reflect in the NIPs the planning efforts to address the High Impact Capability Goals.

(d)

while many pMS are reassessing their policies and strategies to make better use of a European collaborative approach in addressing national capability gaps, for the majority of pMS a European collaborative approach is still not sufficiently prioritised. The Council thus calls on the pMS to use their growing defence budgets to increase investments in European collaborative solutions, thus contributing to a more coherent EU defence landscape and to reducing technological and industrial dependencies. To further strengthen the European collaborative approach, pMS are also invited to better capitalise on the collaborative opportunities proposed in CARD to prepare new proposals for the upcoming sixth wave of PESCO projects.

(e)

The pMS have continued to use the European Defence Agency (EDA) as the European forum for joint capability development. The EDA’s key role as the Intergovernmental Defence nexus at EU level was reinforced through its Long-Term Review, recently adopted by the Ministers of Defence. EDA will support Member States with its five core tasks, related to identifying shared capability needs, enabling collaborative defence RT&I, harmonising requirements, aggregating demand towards joint procurement, and interfacing with EU civilian and defence policies. The pMS are encouraged to make best use of the reinforced role of EDA across the full capability development cycle, further improving the coherence of output with NATO.

(f)

through their continued and increased use of the European Defence Fund to support projects, pMS have contributed to cross-border cooperation and the strengthening of the EDTIB. Moreover, numerous pMS show growing support for a more integrated and stronger European defence industry, as evidenced also by their participation in instruments and initiatives such as EDIRPA and the Act in Support of Ammunition Production (ASAP). The Council strongly encourages pMS to increase efforts to ensure that their cooperation programmes and acquisition strategies have a positive impact on EDTIB, and to make best use of existing and future EU financial tools in this regard, including the European Defence Fund and those envisaged in the Regulation proposed by the Commission ‘establishing the European Defence Industry Programme and a framework of measures to ensure the timely availability and supply of defence products’. In its conclusions of 27 May 2024, the Council welcomed the presentation of the Joint Communication of the European Commission and the High Representative on a new European Defence Industrial Strategy and called on all work on it to be taken forward in coordination with Member States.