Europe’s continuing efforts to restock its military supplies and increase defence co-operation present valuable opportunities for Irish businesses, according to internal Government memos.
Various EU defence projects will also allow Ireland to increase its capabilities in the maritime, cyber and air domains, officials state.
The memos illustrate the Government’s enthusiasm for a suite of new EU mechanisms designed to increase defence spending and to boost the bloc’s native defence industry.
According to one document prepared by the Department of Finance, these measures are needed as the EU faces a growing security threat from Russia ”which will persist into the foreseeable future.
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“At the same time, the United States, traditionally a strong ally, is clear that it believes it is overcommitted in Europe and needs to rebalance, reducing its historical role as a primary security guarantor,” it stated.
In its advisory note, the department endorsed one of these plans known as Security Action for Europe (Safe). This scheme will see the European Commission raise up to €150 billion on the capital markets, which will be made available to member states for defence spending in the form of low-cost loans.
The Department of Defence is analysing the Start programme “with a view to identifying possible collaborative procurement opportunities that may arise under the instrument”.
It cited maritime, air and cyber as areas where opportunities may arise to collaborate in procurement.
Regarding financial opportunities, the document notes Ireland does not have a defence industry “per se” but does have “a very vibrant and innovative SME sector”.
The Department of Finance judged that Safe “has the potential to deliver opportunities for wider industry collaboration in defence applications for SMEs in Ireland”.
There are a growing number of companies in Ireland specialising in so-called “dual-use” technologies that have both military and civilian applications. These include companies making drones, AI and virtual reality technology.
The department also supported the loan format of the programme, as liability for repayments will rest with individual countries.
In the absence of these EU mechanisms, there is a risk to Ireland of an increasingly fragmented EU defence industry that would “likely result in significant inefficiencies in public spending, lead to a price spiral for defence equipment, and potentially the crowding out of member states with more limited purchasing power”, the advisory states.
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Government and military officials have repeatedly stressed the need to work with other EU countries on defence. Last week, the Cabinet approved plans to work with up to four other countries in procuring a military radar system by 2026.
The Safe programme is contained in the recently published EU White Paper on Defence, which aims to increase dramatically EU defence spending and co-operation.
A separate memo prepared for Tánaiste and Minister for Defence Simon Harris on the White Paper states that while there are no plans for Ireland to change its policy of military neutrality, there is a need “to enhance our individual and collective preparedness and capability across all areas of security and defence”.
This will require investment, the Tánaiste was advised.
“White Paper proposals are expected to incentivise member states to co-operate more on capability development – to procure together more regularly and to procure from the European defence industry,” the memo states.
The memo also raised the possibility of Ireland joining EU defence “flagship projects” focusing on cyber and maritime capabilities.
Jointly procuring equipment will not affect Ireland’s security policy and is already provided for in EU legal frameworks, the memo states.
Ireland plans to take a “constructive approach” towards the proposals, it states. It will work to ensure decisions “respect the security and defence policies of all member states – including those, like Ireland, who are militarily neutral – whilst addressing our critical and pressing capability gaps”.
