Post Brexit: UK stands alone as EU strengthens its defence cooperation and capabilities pact – PESCO

As part of a wider package of defence measures intended to strengthen European defence cooperation and capabilities development, on 5 November 2020 the EU established the rules for ‘third state’ participation.

25 EU Member States are signed up to the EU ‘Permanent Structured Cooperation’ – PESCO.  Of the 47 PESCO capability projects, 38 are aligned with NATO projects.

Post Brexit, the UK – or any UK-based company – involved in a specific PESCO project is subject to the ‘third state’ rules.

“Third states that can add value to a PESCO project ‘may be invited’ to participate if they meet a number of political, substantive and legal conditions”.  Amongst other things:

  • A third state must share the EU’s values – and must not contravene the defence and security interests of the EU and its Member States;
  • A third state must provide substantial added value.  However, participation must not lead to dependency on that third state or allow that state to impose restrictions on the use of developed capabilities.  The PESCO Member States will retain full control of the project’s intellectual property;
  • Participation must contribute to the strengthening of the EU’s Common Security and Defence Policy (CSDP) and the EU’s level of ambition with respect to EU-led military operations;
  • Participation must be consistent with the 20 defence policy commitments that PESCO member states have signed up to;
  • A third state must agree a Security of Information Agreement with the EU and an Administrative Agreement with the European Defence Agency;
  • There will be no blanket acceptance of third states into PESCO projects.  Participation will be by invitation only – and the terms and conditions of participation will be set down in an Administrative Agreement;
  • The extent of a third state’s decision-making powers within a specific project will be in accordance with its contribution.  A third state will have no decision-making powers with respect to the overall governance of PESCO, or the strategic direction of the initiative.

These rules apply specifically to PESCO.  The ‘European Defence Industrial Development Programme’ and the future ‘European Defence Fund’ are subject to their own rules on third state participation.

Implications for the UK

Government statements since leaving the EU in January, have indicated that it no longer wishes to achieve the aims that were included in the joint  EU and UK ‘Political Declaration’ that underpins the ‘Withdrawal Treaty’.

Instead, the present UK Government: “favours a flexible ad-hoc approach to future defence cooperation with the EU.  If invited to participate in specific PESCO projects, decisions will be decided on a case-by-case basis.”

The UK’s negotiating objectives stated that foreign policy will be determined: “within a framework of broader friendly dialogue and cooperation between the UK and the EU”.  The document made no direct reference to defence or participation in EU programmes such as PESCO.

Any determination on future UK participation in PESCO will “depend upon how important the Government calculates a specific project to be for the UK’s national interest.”

Part of the decision making process will be to balance the advantages of participation against having to accept all of the EU’s terms and conditions on third state participation – particularly that the primary aim of PESCO is to strengthen EU capabilities, and the general conditions – including handover of the ownership of intellectual property rights to prevent such capabilities being used against the EU and its Member States in the future.


Europartnership’s Guide to trading with the EU from 1 January 2021 V3

Photo:  UK warship taking part in an earlier EU ‘PESCO’ exercise