EU leaders talk Ukraine, Middle East, MFF – POLITICO

— European leaders meet today to discuss Ukraine, the Middle East and the EU’s long-term budget.

— EU countries account for 11.5 percent of the world’s military spending.

— Ukraine announces another partnership with a German defense contractor.

Good morning, and welcome to Morning Defense. Tips to [email protected], [email protected] and [email protected] or follow us at @joshposaner, @LauKaya and @calebmlarson.

LEADERS GET TO GRIPS WITH DEFENSE FUNDS: Decisions will come later, but the eruption of two wars on Europe’s doorstep and sustained calls for military support to both Ukraine and Israel have focused minds ahead of today’s summit of EU leaders in Brussels.

Missiles, ammo for Ukraine: The European Council will pledge continued military support to Kyiv through the European Peace Facility, “including the swift adoption of the 8th set of assistance measures,” as well as through the EU Military Assistance Mission, according to draft conclusions seen by POLITICO’s Jacopo Barigazzi. The priorities are missiles, ammunition and air defense systems; Ukrainian President Volodymyr Zelenskyy is expected to join remotely. 

Read Barbara’s full look ahead to the summit here.

Long-term cash: The key question is how to fix a spending plan for the defense industry in the next EU budget cycle starting in 2027. In the meantime, in the next two days, EU leaders are expected to discuss the review of the current multiannual financial framework (MFF), the EU’s long-term budget. Crucially, there are calls for new financing pools that can fill the gaps until 2027, after the €800 million on offer to boost arms production and joint procurement runs out in 2025. The Commission will present its preferred plan early next year.

Buy European: According to a French official, EU leaders will discuss the European Peace Facility, the off-budget fund used to reimburse states for arms deliveries to Kyiv. While an extra €500 million could soon be cleared from standing funds, there’s a far larger pool of €20 billion that has been agreed in principle, but not addressed by EU leaders.

Clearing that €20 billion fund won’t be easy, especially since France is in favor of a buy-local clause. Smaller EU countries geographically closer to Russia, meanwhile, seek cheaper arms that can be delivered swiftly from the likes of South Korea, the U.S. and Turkey.

Follow EUCO on our live blog here.

EU: The Parliament’s Security and Defense Subcommittee will discuss a report on security concerns related to Chinese-owned critical infrastructure inside the EU, starting at 9 a.m. Defense-minded MEPs will then hold a debate on the protection of subsea infrastructure such as cables and pipelines at 11:30 a.m. Watch live here.

NATO: Secretary-General Jens Stoltenberg welcomes Italy’s Deputy PM Antonio Tajani and Moldova’s PM Dorin Recean.

FRANCE: Armed Forces Minister Sébastien Lecornu will deliver a speech at 9 a.m. at the launch of an umbrella organization hosting state-funded think tanks on defense and security. 

BALTICS: General Valdemaras Rupšys, commander of Lithuania’s armed forces, is attending the Baltic Chiefs of Defense Meeting in Riga today alongside his counterparts General Martin Herem of Estonia and Latvian defense chief Lieutenant General Leonids Kalninš. They’ll discuss interoperability and integration among their countries, particularly in air defense, as well as joint military projects such as the Baltic Defence College, the Baltic Air Surveillance System, and the Baltic Naval Squadron.

**A message from ASD: ASD leaders Guillaume Faury (Airbus CEO), Micael Johansson (Saab CEO) and Jan Pie (ASD Secretary General), in a recent thought piece, underscored the urgent need for Europe to strengthen its freedom of action and capacity for collective action if we are to preserve what we value most – our democracy, freedom and prosperity.**

FIRST IN MORNING DEFENSE — EU BUDGETS OVERVIEW: EU countries account for 11.5 percent of the world’s military spending, according to research by the Jacques Delors Institute shared exclusively with Morning Defense. Nearly all capitals increased their defense budgets between 2021 and 2022 — with Poland, Sweden and Finland taking spots on the podium. In 2022, about 1.3 million out of 448 million European citizens were enrolled in the armed forces; the five largest armies belonged to France, Germany, Italy, Poland and Spain. 

STOLTENBERG ASKS TOUGH QUESTIONS: Governments must ensure that the defense industry can ramp up production, NATO’s Stoltenberg told the NATO-Industry summit in Sweden on Wednesday. He praised recent defense budget increases, but warned: “We need more.”

“If we want spare capacity, there is a cost. And the answer is that we want that spare capacity, because we need to be able to boost production when there is need. So the question is how do we pay?” Stoltenberg asked, and then explained. “Either through [the] market, but then maybe we need to adjust the regulations … Or we need the state … to buy the service of spare capacity. I don’t know the answer, but I know that we have not enough spare capacity today.”

ANOTHER GERMAN PARTNERSHIP: Ukrainian Strategic Industries Minister Oleksandr Kamyshin took to Telegram to announce another partnership — this time with German defense firm KMW. That announcement followed an earlier bulletin that Rheinmetall and Ukroboronprom had agreed a joint venture for the maintenance and repair of German armored vehicles in Ukraine.

KMW’s products have proven crucial to the Ukrainian war effort. The firm produces Leopard 1 and Leopard 2 tanks (in tandem with several other German firms), as well as the Panzerhaubitze 2000 self-propelled howitzer, and the Gepard, a Cold War-era tracked air defense gun that, despite its age, excels at taking down Iranian loitering munitions that Russia has used to pummel Ukrainian cities.

Look ahead: If the agreement between Rheinmetall and Ukroboronprom is any indication of what can be expected for KMW, producing Gepard ammunition in Ukraine would be a boon to Ukrainian forces who’ve been forced to scrimp on ammunition. At the very least, handing over a few of the missing Gepard field manuals would be a good start.

US PRIORITY: “We’re beginning to pivot to rebuilding the industrial base inside Ukraine,” said William LaPlante, the Pentagon’s top acquisition official, at the ComDef conference in Washington on Wednesday. “I spent almost two weeks in Brussels these last two weeks working on this, and you’re gonna see more there [soon],” he added.  

MORE MILITARY AID: The Australian government is sending Ukraine weaponry worth $20 million, including de-mining equipment, a 3D metal printer and counter drone systems, Ukrainian Defense Minister Rustem Umerov wrote on X. He also met with his Danish counterpart, Troels Lund Poulsen. 

**Do you want to know more about Europe’s defense policy and the increasingly important roles played by NATO and the European Union? Join us on November 21 at POLITICO Live’s Defense Launch event and hear from our speakers. Reserve your seat today!**

CLEAR EYES ON SKIES: The German air force is reportedly testing a passive radar system called Twinvis (manufactured by Hensoldt, a German firm) that, if successful, could allow the Luftwaffe to monitor the skies while keeping their own radar positions mostly concealed. The technology listens to and gathers electromagnetic energy signals from radio and television that glance off airborne objects rather than pinging continuous active radar signals into the sky.

Pulling the curtains back on stealth technology? The system could, in theory, detect stealth aircraft under certain circumstances by measuring electromagnetic disturbances in environments thick with radio, television and other signals. However, in remote locations that lack robust civilian infrastructure and, therefore, less ambient electromagnetic chatter, the technology may have difficulty detecting either conventional or stealthy aircraft.

EUROPEAN PATROL CORVETTE MOVES FORWARD: A group of European naval defense companies, including France’s Naval Group, Italy’s Fincantieri and Spain’s Navantia, have agreed to start work on the design of a next-generation small military vessel under the EU-funded European Patrol Corvette program. Some €87 million is being allocated to the first two-year design phase of the scheme, which is aimed at finally getting a combined maritime European defense program running, albeit at an embryonic stage.

Josh and Hanne Cockelaere have more here.

QUICK HIT: French President Emmanuel Macron will send the French amphibious helicopter carrier Tonnerre (yes, that one) to support hospitals in the Gaza Strip.

ARIANE 6 CLEARS REHEARSAL: Despite long delays to the program, engineers completed a 30-hour rehearsal for getting the Ariane 6 rocket ready for commercial launch at a spaceport in French Guiana mid-week. A mock rocket — with inert boosters but otherwise fully assembled — is on the launchpad for the test but, as we reported, the real thing still needs to undergo a hot fire test on November 23 before a commercial launch date can be set for next year. The European Space Agency (ESA) said the run-through was designed to test the teams at “the edge of … operational parameters” in night conditions.

UK IN FOR PRIVATE SPACE MISSION: British astronauts will soon be flown to space by a private Axiom mission after the U.K. Space Agency signed a cooperation agreement with the Houston-based rocket company. The Guardian reports that the deal is worth £200 million and will see four Brits fly to space for a research mission led by Tim Peake, a former ESA astronaut. It’s not yet clear when the launch will take place and whether the astronauts will aim for the International Space Station.

Fly private: Axiom offers countries a way to send their astronauts to space outside traditional space agencies such as ESA; Sweden and Hungary have already signing up for national missions, although neither country has an astronaut in the current cohort of lead ESA cadets.

NEW CHIEF OF DEFENSE SCRUTINY IN BRITAIN: Tory MP Robert Courts was elected the new defense committee chair in the U.K. House of Commons on Wednesday. The gig — the holder leads parliamentary scrutiny of Britain’s defense ministry — continues to grow in importance for obvious reasons. 

THANKS TO: Jan Cienski and Zoya Sheftalovich.

**A message from ASD: Joint procurement is essential to consolidate European demand and sustain a competitive European defence industry. However, today most EU Member States procure defence systems and equipment nationally and from non-EU suppliers. This undermines the long-term competitiveness of European defence industries and ultimately also the EU’s ambitions for strategic autonomy. We therefore need a clear ambition and path for reversing the current trend and buying more European, together.**