COLOGNE, Germany ― The leading German defense industry group is urging its members to position themselves for new business through the European Union’s Permanent Structured Cooperation mechanism ― that is, if PESCO proves to be worthwhile in the first place.

In a new whitepaper, the Federation of German Security and Defence Industries warns that domestic firms could miss out on a expected uptick in common spending, as Germany’s role in an initial batch of 17 PESCO projects is fairly vague. The projects were approved in December.

Berlin is on tap to lead the formation of a European Medical Command, act as a major player in military logistics, guide training-related initiatives and build a European Union Force Crisis Response Operation Core.

In contrast, France and Italy claimed topics with a heavy industry focus. France will advance a European secure software-defined radio, while Italy heads a section devoted to armored combat vehicles.

The association’s whitepaper aims to clean up major misunderstandings surrounding the nascent PESCO process, chiefly the assumption that the construct represents a pot of money for which companies can apply.

“PESCO is only an instrument — not a funding mechanism per se,” said Hans Christoph Atzpodien, who heads the industry group. The actual money lies in the European Defence Industrial Development Programme or, later, the multibilion-dollar European Defence Fund, among others, according to the whitepaper.

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The jury is still out on whether PESCO can generate the kind of defense-industry momentum some want it to have. But German companies should be in a position to participate in projects when it does turn out to become a major driver, argues the industry group.

At the government level, it remains to be seen how much heft can be ascribed to the idea. “The new German government will have to get its ducks in a row and determine the level of political will behind PESCO,” Atzpodien told Defense News.

Celebrated as a major breakthrough for European defense at the Munich Security Conference last month, the framework’s success is not altogether assured.

Bilateral cooperation projects will continue to play an important role outside the new framework, said Ingmar Zielke, who authored the document.

That, in turn, could water down the vision of PESCO as a kind of glue for a fractured European defense industry.

France, for one, appears reluctant to fully embrace the process as a driver for common defense programs, Zielke said.

Paris has launched a European Intervention Initiative that, despite its operational focus, also has the potential to spin out investment programs.

Sebastian Sprenger is associate editor for Europe at Defense News, reporting on the state of the defense market in the region, and on U.S.-Europe cooperation and multi-national investments in defense and global security. Previously he served as managing editor for Defense News. He is based in Cologne, Germany.

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