Speaker 2en
What's the diagnosis? How would you describe where we find ourselves today? Can I start with you, Minister Jonsson?
Speaker 3en
Sure. We're at a very dire point for European security due to Russia's full-scale invasion of Ukraine and what we are of course observing is that Russia might not be as strong as some people have assumed, but it doesn't make it less dangerous because it has a propensity to take great political and military risks, it shows a great deal of brutality not at least inside Ukraine and right now it has some tactical advantages currently when it comes to the production of ballistic missiles, when it comes to jet-driven Shahed drones or Gepard 2, and it also when it comes to glide bombs, which makes our Ukrainian friends being very much military challenged right now on the long-range strike capabilities. In conjunction, of course, that Russia has high ambitions to reconstitute their armed forces and come back bigger, so to speak, by going up possibly to 1. 5 million soldiers and of course go wherever they have brigades right now, they're going to go up to divisions where they have divisions, they're going to go up to army corps and so forth. So this is there's going to be a lot of military expansion most likely from Russia, and that's why it's so important that as Europeans are able to transform economic clout into combat power in this challenging times and do it quickly on the basis of the agreement at the Hague. Last point then, of course, what we are seeing also is a propensity of Russia to take greater risk when it comes to this hybrid operations than I'm thinking about everything from disinformation to cyber element or CNA and CNE, and we're also seeing acts of sabotage, such as in Leipzig in Germany, in Poland, and Estonia to mention a few.
Speaker 2en
Thank you so much, Minister Jonsson. Commissioner Kubilius, what would you like to add when describing our security environment?
Speaker 4en
Well, I. First of all, really thanks a lot for inviting me, and I just was looking into the title of the whole conference, the new world order, and I was saying, well, maybe we should call the new world disorder. You know, and more precisely, you know, where we are, and that means, you know, in this big transformations worldwide, what is very much needed is European order. You know, inside of Europe and possibility to, you know, to emanate, you know, some kind of this power for the in a broader way. So definitely what Minister said, perhaps we see all of us, we see those major elements. Russia's, you know, the last on European continent or neo-imperial war against Ukraine, this is very clear. And, you know, our task of course is to deter Russia but still I would say that our level what we manage to achieve during some of those, you know, several years is not deterring Russia as we would like to see. Russia is escalating, next year we need to remember Russia is going to spend increasing their war budget up to 180 billion euros by 30% and usually at least it's I remember very well my years of Prime Minister usually in this region, you know, you cannot compare nominal numbers, you need to compare power purchasing power parity numbers. And then if you are using those, you know, that comparison method to 180 billion Russian war budget, you are coming up to the numbers that Russia is ready to spend next year out of 500, 550 billion euros which is an amount equal to whatever the whole European Union is ready to spend for defense and maybe a little bit more. And we see that Russia still is keeping potential to innovate, to modernize drones or whatever they are using and even scaling up production. Last year they were able to produce around 1,000 ballistic missiles, this year they are ready to produce or this year perhaps they will reach 2,000 and you know that on European side we are not producing at all ballistic missiles. So this is where we are. Now second factor is of course our transatlantic partners not related with elections but in general
their structural clear agenda to shift more and more towards Indo-Pacific, the reasons are quite clear, China rising and to mitigate that rising power they will shift their resources to China as secure general Alexis Grinkiewicz is saying if Russia and China would decide at the same time to start some kind of, you know, major war aggression United States will not be able to cover both front lines. That is why they are asking us to take primary responsibility on European defense which again brings for us quite clear demand. What we need to do. Now here. Comes, you know, very clear what is on our agenda then as a priority. Of course support Ukraine from one side and second, you know, Ukraine support to us. I mean learning from Ukraine as much as we can in order really to ramp up our own defense capabilities. And that is what is very much on our agenda but in order to achieve you know this defense readiness what we call defense readiness 2030 we need to see three pillars in this defense readiness, material one, it means production finances procurement and things like that where we are doing quite a lot not everything is going up to that you know level what we want to have here was very important European defense agency report which warned us that maybe we can miss the target 2030 so we need to make a conclusions but besides material defense readiness and very much related with that is what I call institutional defense readiness thanks a lot for some of your reports on security council and things like that what we are discussing now and the last one is what I call political defense readiness how to keep our political will to defend ourselves to support Ukraine when Russia is exactly attacking our political will with all their hybrid means.
Speaker 2en
Thank you so much. So I mean you're the first commissioner with this specific role of being for defense and space and of course we have seen a number of initiatives in particular since the Russian full scale invasion of Ukraine and now almost five years ago so looking at the measures and the development in the European Union but also European widely speaking what would you pick up as the most important and significant steps that we have taken so far?
Speaker 4en
Well, I would say, you know, from the very beginning I was saying that in the European defense we need to have big bang approach. We cannot allow ourselves incremental, you know, changes. So we did something what we can call financial big bang both member states and us as EU institutions, member states agreed with NATO to increase our defense spending up to 3.5% for core defense then 1. 5 for something related with defense and just if to calculate just to understand what does it mean. If to calculate how much member states will spend till 2035 when they will reach this target it's very simple arithmetic you are coming down to quite an impressive number it will be around of 6.8 trillion euros. Trillion not billion. Then we did some you know financial new instruments like SAFE loans like national escape clause now Ukraine support loans of those are really important instruments which are really working and we are of course suggesting and proposed next MFF with five times bigger defense and space spending again I can repeat my please that governments would support it's very important you know promises. Yeah of governments that's good but we need to understand also how really it shows also what's and how you know responsibilities in Europe on defense are distributed. So if we shall have those you know 130 billion euros for space and defense so we can imagine that we shall perhaps have 50-50% you know distribution for space and defense so it means defense will have around of 65 or something like that billion euros and if you are comparing 65 billion euros with 6. 8 trillion euros on national defense you know spending then you see what is the difference and what are the role. We can incentivize member states to spend their big amounts of money in a prudent way. That's our role. And that is what you know what we. Always say. Now money itself is good but they are not you know defending. Ourselves against whatever drones you know and things like that. So then we need to look into production. You know how what's about production and I would say
yeah we are in some cases we're increasing very rapidly production different you know different industries are doing great. Swedish industries are doing great. But again you know we need to see also that challenges ahead of us are big as always than the challenges which we managed to overcome. Just one example. Now we're working with Ukraine support loan. It goes through our services through my services. We are managing all those you know contracts with Ukrainians very effective you know instrument and Ukrainians are saying this is the best instrument what they have in general in support you know mechanisms. This year we are we shall you know deliver to Ukraine financing of 28. 3 billion euros out from those 60. The contracts are coming from Ukraine. And half of that amount will go for production of drones around of 15 billions. Ukrainians are really good in producing and they need to produce to match Russia around of 10 million drones. This is huge amount. We need to understand what does it mean. It's around of 30,000 drones per day. But Russians are producing the same amounts you know. So that is what we shall face. We are producing in Europe around of 1.5 million drones. So again we need to understand around of 10 million 10 billion euros Ukrainians are ready to spend for air defense and missile defense. Including an 8 million billion goes to European producers 2 billion goes to PAC-3 producers but that's a different story big shortage of PAC-3 Patriot missiles but among those 8 billion you know euros which we which we are ready to finance you know for Ukrainians to buy you know some equipment produced by European companies for air defense and missile defense the contracts are what are you know what European companies are able to do. Contracts are for 28-29 year. Which is really very much worrying us. So it means that we are still in our defense production we are not matching the needs even of Ukraine. I'm not talking about our needs. So that is why scaling up our production is crucial.
And I will not go maybe into the details what we need to do. I see several topics. One is big structural problem you know of fragmentation of our defense industry. I will not repeat all the Mario Draghi report on that. But this is you know really which is a which creates you know some kind of limits how much we can achieve in scaling up production without our efforts to have the fragmentation of the market. And second of course what industries are starting to learn and what Ukrainians are showing as an example. And maybe even Russians are showing as an example. Our industries are saying well perhaps our problem is that we as industries we are too much targeted towards what they call haute couture production. Very technologically very very advanced very expensive and impossible to ramp up. And they are saying that they need to shift not forgetting haute couture you know very very well advanced you know technologies but they need to move into what they call good enough production. You know which is not so technologically complicated but it still hits the targets. It's cheaper and it's much more possible to ramp up you know and to scale up production. So that is I would say several of those you know things which we need to learn and we need to learn also how to build our pan-European projects. Because because of the fragmentation that is a quite a big task for us to learn to build pan-European project and that is why we came with those European defense projects of common interest EDPCIs as a new instrument also to try to bring us together.
Speaker 2en
Minister, you're on. What would you see as the most important measures taken and perhaps looking back but also looking now to the where we are today?
Speaker 1en
Well I can have the claim to fame to be a CSTP historian. You know I wrote my doctorate about this subject about 20 years ago. I've been quite critical to how it's been developed until but it has changed. So just to divide it up of course the EU has never been able to affect force posture but now it's going to do. But let me do I think there's two really landmarks accomplishments on the EU side. One is the EPF and the EPF was indispensable in the beginning to incentivize the member states to provide the Ukrainians with the military hardware because they know they were going to be that were going to be replaced. So I think that was a very significant landmark. The other of course is the EU loans because that's what kept the Ukrainians in the fight when the Americans stopped donating financially and militarily to the Ukrainian side besides from the POL packages which we buy from the Americans and they didn't tell the uns so those things have been really historical accomplishment I think this has been very very significant as you know we're also very open to looking into the immobilized Russian assets as well if so that's a Swedish position on that. So it has it has played a very significant way in assuring that the Europeans are able to support the Ukrainians also with the EU loans. The other one is opening up the stability pact. It was portrayed as providing Europe with 800 billion euros extra. These are member states money but still it's still 800. I think when you open up that short that the member states were both able and hopefully willing to live up to the to the to the commitments of reaching 5% of which 3. 5% are going to be core military expenditure. So once and together with the SAFE loans which I think are significant even though Sweden as you know we have a low national debts we're not part of SAFE but we welcome the SAFE. So I think those I think and then the EU also does you know important things but the such as cooperation on R&D regulating industry and under you have a super important job in omnibus defense
you know assuring that we can deregulate and cut red tape there's now a review also of the procurement directive those things are important also for force posture and military hardware and can assure that EU and NATO have a complementary role of course NATO being the main guarantee of course when it comes to Article 5 and collective defense but EU can actually support that. And I think it's been actually good coordination to assure that the SAFE loans and the measures we are undertaking there are reasonably well coordinating with the North Star of our military buildup which is going to be the capability target that NATO has all provided us with.
Speaker 2en
So but let's perhaps stay there on this little bit how to organize ourselves. I mean you as you mentioned for us of course a big shift in security policy was joining NATO as a consequence of the Russian invasion. But this is of course an eternal question about you know how to divide a little bit responsibility. And could you perhaps a little bit elaborate further on this Paul how you see it you know what should be then the what's the more specific role for the European Union when it comes to defense and perhaps also the wider sort of preparedness agenda. How do you see this in relation to perhaps a little bit concerns about the role of NATO in the future?
Speaker 1en
Absolutely. And just very briefly then the perspective from the northern flank which is you know very close to my heart but what you see at least in the northern flank is that the security environment has been completely transformed since Sweden and Finland joined NATO in terms of military planning. This has come from a region of unpredictability into predictability because now we are tactically strategically and operational integrated into NATO's defense plan. Then we can really get traction on Nordic defense cooperation. I used to say that Nordic defense cooperation there was a defense cooperation for peace times solutions before but I feel much more traction on doing that. We can create all these new partnership like with submarines with Poland and so forth as well. So that's been but the EU has an important role and I we follow this for example with the ASEP has been important. It's been assuring that we in the few years have been having the ability to triple having the ability to triple the production of 155. I think that's a very significant accomplishment. We're using EDIP funding for going into KT we went to KTH yesterday. As well. We're putting up a center of excellence or a Swedish center of excellence on providing this nitrocellulose gun powder. I think the and there are many examples I think also when it comes to collaborations also and making sure that this is my piece of advice making sure that the proposals that come from the commission are well drafted and well tailored because otherwise we defense ministers spend a lot of time talking about all these details as well and we go to this ministerial meetings and we mix the big pictures because we're talking about technicalities as well. Yeah that because there has been an avalanche of initiatives on the EU side right now and there is it's certainly affect what we're discussing at the FAFC.
Speaker 2en
Mr. Capitas, when you were in Salem this winter in the security conference you had the ideas of you mentioned there should be a big bang in European defense. You mentioned the need for European security council. And a number of other institutional innovations. Now as we see from the president of the commission von der Leyen she has also endorsed this idea of a European security council. And also the work on a European security protocol that is a way of dealing with a number of these threats that are perhaps below certain thresholds. Now could you elaborate a little bit why you see the need to also think about how we work with security in Europe in this context?
Speaker 1en
Well thanks a lot. Very good question and also previous question to Paul. You know I was saying in Salem you know very simple that well we need you know financial big bang we need industrial big bang but also I said we need intellectual big bang you know in developing our defense Readiness and as I said you know in defense readiness I see those three pillars material institutional very important we are now starting to touch that topic but still you know we need to go much more deeply and then you know political one on hybrids you know and one where I'm talking about institutional defense readiness really I'm trying to understand where we are in a longer term you know and I see that our you know times our generation and younger generation we shall go through two major transformations at the same time. One is what I call you know transformation which is happening once in a hundred years. And second which is happening once in a almost 500 years or you can say millennium. And you know this millennium what does it mean? China and India are coming back to you know being strong and leading economical powers before the end of you know this century. That is what was the reality of the world before Columbus big you know voyages. That's what is coming. What will be the consequences of that we can just guess. But one of the consequences is that Americans are shifting to you know with a long-term you know strategy. They are shifting towards Indo-Pacific which is absolutely I cannot disagree with them you know. The question is how it will go how we shall prepare for ourselves ourselves and so on. This is you know more technical question. Second transformation related with that is what I call 100 years transformation is transformation of the nature of collective defense of Europe. From the beginning of you know NATO it was transatlantic collective defense of Europe. Now with NATO 3.0 with primary responsibility of Europe on you know defense of Europe it means that this transatlantic collective defense of Europe is shifting towards European collective defense of Europe.
Much more you know of course United States will stay nuclear you know protection will stay but we need to understand that we are moving into that. And we can call it whatever we want you know European pill of NATO and so on and so on you know. But that will demand from us also to understand how we need to transform our institutional approach towards defense issues on European continent. And here I have very simple you know always I'm repeating it's not against NATO NATO will transform itself you know into much more of European on European continent. And I'm always saying NATO is a military might. European Union is an economical power. This is our division of labor. And then the question is how we're bringing this European you know economical power to develop our defense capability. That will stay. But also in order to build this you know European pill of NATO we need to understand very well what commission president repeated several times including the last during the last state of the Union address. All of us we pick this you know hear sentence about European security council. But before that she said look doctrines institutions and decision making which we created during peace time and which are based on consensus and so on and so on they are not fit anymore for the purpose during this you know new world order or new world disorder times. So that's what is the reality. So it means that we need to look very very deeply. So how to organize ourselves in a better way from institutional point of view. And that is where comes the question about you know do our institutions which we have like European you know European Union defense councils 207 you know and so on. Do they fit for the purpose? In my view really it could be we can look for something better organized with two major goals. If we are taking responsibility as Europeans on European defense then we need to answer the question how to you know to build a geographical basis much stronger for such an European defense it should be not only European Union member states we have on one side
we have United Kingdom we have Norway which are members of NATO but not members of EU and we have Ukraine which is not member of NATO and not member of EU okay NATO is really not very clear when Ukraine will be able to join European Union is maybe more clear but still that will take time and we need Ukrainian battle tested experience not in 10 years time but now. So that is what we need also to look into how we can do that. That is why I am talking about European defense union which could be you know some kind of new framework you know for everybody on equal footing you know to come together who will who wants to come together you know and to and to build this you know broader geographical basis for our defense readiness and second we need to look also how to make our institutional framework much more effective because this you know 27 is good but not not most effective not easy yeah not easy. So that is why I propose to to come back to the ideas which were originally proposed by Emmanuel Macron and Angela Merkel back in 2018 to have what we called European security council in. Some way a little bit similar to what now we have this format E5 E5 plus big you know countries with strong defense capabilities and strong industrial you know capacity defense industrial capacity should come together here can be rotational members coming from different regions you know in order to have much better geographical balance but they should give answers big answers to big questions that's my view and then you know everybody will will will will have possibility to follow.
Speaker 2en
That's what we're always looking for. Sometimes there are big answers to small questions and vice versa as well. But I have a big question to the commissioner and I have meeting you before you before also you you became a defense commissioner but one of the first questions I asked you as defense minister okay what do you do in case the EU becomes in war you know I know exactly what I'm going to be doing if Sweden comes into wars there are procedures there's files you know do we go into the government but preparing also the EU for war and what would happen if a member state would be in attack and here I'm alluding also to the minister report which I think was commendably important enhancing resilience because if we want to use the resources that are inside the EU and the EU has important resources also in case of war that need to be integrated also into NATO's common defense planning. So I think there is you know in order to bring awareness I think we should grapple with these things and what role the EU should have in case of an armed attack. And this is not just about Article 427 and 222 and but but there are also and I think I think there are also some interesting things I think also on on security protocol for hybrid threats. Especially the EU one of its merits is working internal and external security. But these are things that we need to grapple with. Also in integrated way because we've been doing some planning and some scenarios and if it's not planned in advance those resources you ain't going to work in war because it's going to seen as two institutionally cumbersome.
Speaker 1en
And that's one of the important messages from the minister report to practice these and also I guess the logic behind the so-called security protocol that creates this kind of structure how to deal with certain situations. Yeah. What a good question minister and again you know and this is next year I perhaps said you know that it was very interesting to see approved walking program for next year what commission is going to do on defense issues and exactly both you know this security protocol but also Article 427 is you know there is an in agenda you know making really operationalization of this article as minister report was asking and we need to understand that you know Article 427 is speaking about mutual support by all the means usually everybody looks only into military means which okay you know that is a little bit more complicated in military terms you know how to combine with NATO of course there are Cyprus there are Austria there are you know island which are not members of NATO and they are looking only into Article 427 but in my view most important is for us to understand that if we shall be you know hit by major crisis war crisis that will be the crisis not only military one which NATO has the answers of course Article 5 plans military plans and so on and so on it will be the major crisis in all the different areas economical crisis you know social crisis humanitarian crisis and here European Union has the whole series of established instruments which would be very helpful for member states which became a victim of that aggression so we need to look from that point of view how to synchronize all those mechanisms how to make them you know much easier much more easy to to hit to to you know to start them and then you know to have even some kind of playbook which would be helpful for prime ministers to have on the table and if you are hit by the crisis you very quickly can learn what kind of assistance you can get both from your neighboring countries but also from EU institutions which can be of a very great assistance in coordinating I you know
I since I had this experience being prime minister I started to look through my eyes you know so what would happen you know what what what what you will do as as prime minister if you are hit by the crisis and then I I came to very simple conclusion that I would be very happy if I would be able to call somebody in European commission or institutions asking for assistance to organize to help me to organize this mutual assistance not that I am as a prime minister should call myself you know Swedish or I will call you know but but I would be really very happy to have some kind of this you know established network established system which would be triggered and and that will work. So this is what what I see as as really very big need and for example now we are working on on our our priority now for at the moment is military mobility.
Speaker 2en
Yeah. When I look just to when I looked into well I I was I even understood while we were discussing this military mobility that I was looking till now into very much simplified way what does it mean military mobility and well okay we need to resolve issues of what we call military Schengen how to resolve those you know permits on the borders that is you know legal question then we need to find the money to invest into infrastructure you know roads railways and so on okay that is also very well known but only now I started to understand that you can have permits you can have you know you can have roads and bridges but you first of all you can have a deficit of transportation means which is a reality at the moment and second even if you will have enough of transportation means the coordination of you know all those movements we need to understand first tire NATO NATO plans to bring 100,000 troops during 10 days to the front line 10 days 100,000 troops I asked the NATO experts 5,000 troops one brigade to be moved you know to the front line if you will use roads the convoy of trucks putting you know trucks nose to nose will be 12 kilometers long one brigade 1,100 troops of NATO first tire means 20 brigades so it's simple arithmetic it's a very that's a very long yeah so one brigade 4,000 containers we normally count it like that roughly we we're probably both speaking too much now I'm very very much going to be part of the problem here because we're leaving I think up to Kiruna to the at our spaceport like that but so just like maybe very clear that that you know if if if in the member state or or an ally would be exposed to to an armed attack and NATO would be the to go you know and this Ireland class commitment to Article 5 and NATO's defense plan so that's our first response but there is as as the commissioner said a very important role also for the EU in many other aspect diplomatically financially and so forth and we're learning some of the hard lessons on that also in in Ukraine where where the EU also plays a very
important role so I just wanted to make that clear so I had already mentioned that I wanted to take up questions from the audience but I think as the minister said we were a bit too talkative and I perhaps not strict we're not kind yeah with time and the topics were perhaps too so important and too big so but I I realized that you have a transport and you have to leave so with this I will only say a big thanks to you and I think you've offered a lot of questions that we can hopefully try to help with our intellectual big bang we will have today to resolve some of them so thank you so much okay thanks a lot thanks a lot thank you okay we're running here and go here and get the microphone and I will now.