EU keeps defence fund alive with 8 billion euro proposal

By Robin Emmott

BRUSSELS (Reuters) - The European Commission proposed on Wednesday spending 8 billion euros ($8.81 billion) of its next budget on a new European Union defence fund, keeping alive a Franco-German plan to deepen military cooperation despite the economic impact of COVID-19.

Unveiled as part of the EU executive's proposals for the bloc's seven-year budget from 2021, the fund would allow EU states' militaries to develop weapons, deploy together and streamline military systems in Europe.

Though the amount is much less than the 13 billion euros the Commission had initially proposed, the defence fund, if agreed by EU governments, could generate investment worth much more by enticing defence contractors to help finance deals through it.

The fund would mark the biggest step forward in EU defence integration since the late 1990s, when Britain and France helped launch closer military cooperation in the bloc.

Following Britain's 2016 vote to quit the EU, France and Germany seized on European defence as a way to promote integration. They agreed a new pact with other EU governments.

While the United States, the world's biggest military power, has 30 weapons systems, the EU has 178. The bloc has 17 types of battle tank, compared to just one in the United States.

Military cooperation could also help advances in technology for pandemics, officials say, including in chemical and biological research such as hi-tech, resistant clothing.

The Commission proposed just 1.5 billion euros - much less than previously - for modernising Europe's disjointed transport systems to move troops east in the case of conflict with Russia.

The U.S.-led NATO alliance sees the ability to move quickly across Europe as vital to overcome border delays and rebuild bridges too weak for tanks.