Permanent Structured Cooperation (PESCO), established by the Treaty of Lisbon in 2007, was intended to create a framework for the most willing and able Member States (MS) to cooperate on defence within the EU. It was activated by 23 of them in 2017. Today, all MS except Malta participate. This brief examines PESCO’s contribution to the EU’s growing defence ambitions and sets out the challenges ahead.
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The original idea of PESCO was to welcome, under an EU banner, cooperative defence efforts between armed forces with similar needs, without requiring the involvement of all 27. A variant of the ‘club’ idea, this would allow states to make pragmatic progress without fear of veto. PESCO has a political pillar and a projects pillar. The addition of projects was intended to bring all the MS together, albeit at different speeds, to strengthen the common defence.
PESCO was intended to allow states to make pragmatic progress in defence without fear of veto
The political pillar contains 20 commitments that legally bind the participating MS to strengthen and bring together their defence policies. These include quantitative targets, such as defence spending, and more qualitative ones such as participation in cooperation or contributions to military mobility in Europe. Each year, the MS must demonstrate that they are meeting their commitments in a National Implementation Plan (NIP). Every two years, this plan must be accompanied by a letter from a national political authority making PESCO a truly political framework.
PESCO also hosts practical intergovernmental cooperation projects. From 2017 to 2021, waves of projects were launched each year, after which the rhythm became two-yearly, with waves in 2023 and 2025. Today, there are 66 ongoing projects and 7 have been completed. MS may act as coordinators, participants, or observers in any number of projects and are generally free to manage projects as they wish. Decisions are normally taken unanimously by participants, while observers do not usually have decision-making powers.
Most projects are aimed at harmonising requirements for a common capability (platform, weapon system, etc.), but some have a more operational focus such as coordination or training. PESCO projects can also serve as a forum for inter-state supervision and coordination of industrial developments. This is a natural extension of the harmonisation of capability requirements that takes place in some PESCO projects. In traditional defence acquisition, demand comes before supply and the armed forces are the only users. They do not adapt to a product, but the product adapts to them. PESCO is thus meant to be used to guide industry so that it does not produce—and waste—public money on solutions that do not fit the requirements of the armed forces. The same logic applies to the European Defence Fund (EDF), where intergovernmental cooperation through PESCO provides legitimacy for the Union’s subsequent financing of the defence industry and possibly, the European Defence Investment Programme (EDIP).
The Baltic States in PESCO
Unsurprisingly, the MS most committed to PESCO are those with the biggest armed forces and defence budgets: France (52 projects), Italy (51), Spain (44) and Germany (41). In the Baltic region, Lithuania takes part in 18 projects, Estonia in 13, and Latvia in just 10, making it one of the least involved of all the participating MS.
The Baltic states’ participation is focused on a few specific areas reflecting their interests in autonomous systems, cyber, and digital technologies, but they also contribute to the logistics and maritime areas. In the autonomous systems area, Estonia coordinates three of the four projects in which it participates as well as one in cyber, while Lithuania also coordinates one of the cyber area projects. This reflects fields in which the three states wish to specialise and develop the skills of their own companies.
Despite the proximity of their interests, however, the Baltic states do not necessarily have the will or the means to support each other’s PESCO projects. Although Latvia participates in all four Estonian-led projects, Lithuania has only a small involvement (two observers). Estonia takes part in the Lithuanian-led project, but Latvia, in any case an unenthusiastic PESCO participant, does not.
Discreet But Real Progress
According to the progress report published each year by the PESCO Secretariat, PESCO projects are progressing well despite a general lack of awareness of the initiative and the challenges of the changing geostrategic landscape after Russia’s full-scale invasion of Ukraine.[1] Seven projects have been closed, two are nearing closure, and several more were expected to finish by the end of 2024.[2] Participation has increased, with 16 participating MS joining more projects since May 2023. Some third countries have also expressed interest in taking part. Projects launched in 2023, such as Strategic Airlift for Outsized Cargo (a potential European solution for an ‘A800M’) and Counter-battery System (artillery detection and targeting) are drawing on lessons from Russia’s war in Ukraine.
The Estonian- and Lithuanian-led projects have also reached several milestones. Cyber Rapid Response Teams, coordinated by Lithuania, is already operational while the Integrated Unmanned Ground System project has led to the production of a robot demonstrator.[3] More broadly, several other projects look promising. The European Patrol Corvette should come to fruition in 2030, and the Future Mid-size Tactical Cargo is looking towards a first prototype at the end of the decade.[4] Other projects, such as the Estonian-led Cyber Ranges Federation and the Network of Logistic Hubs in Europe and Support to Operations, coordinated by Germany, France, and Cyprus, have made significant progress and are well regarded by the participants. PESCO has thus made several discreet, but real advances in the construction of European defence.
Challenges
The MS have, however, identified some difficulties related to cooperation in the PESCO framework. First, from an administrative point of view, it is relatively cumbersome. The timetable for proposing, validating, and launching a project is long—around 9 months from proposal to validation by the Council—and the procedures tedious. PESCO has become a highly bureaucratic framework, beyond the expectations laid out in the Treaty.
But it is the NIP that causes most difficulty for the MS. The twenty binding commitments, some of them including sub-commitments, have made the annual production of this document a very long process. PESCO has become a framework that is often more tiresome than advantageous at a time when human resources, especially the ones dedicated to EU affairs, are limited and often already very busy.
Second, the quality of project management varies greatly from one project to another and depends a great deal on the commitment of the individuals in charge in coordinator capitals. Some projects progress very quickly, while others are empty shells. The support offered by the European Defence Agency (EDA) is under-used and the existence of many projects that have made little progress tends to undermine the usefulness of the whole framework.
Third, some MS have used PESCO to increase their indirect funding benefits from the Commission, as consortia that state a link with a PESCO project may also be granted a bonus through the EDF. The lack of a legal link between PESCO and EDF means that there is no formal confirmation procedure for these arrangements. Several PESCO projects have been created simply to justify a financial bonus, rather than necessarily to meet EU defence needs, further contributing to undermining the credibility of the framework.
Finally, the political nature of PESCO has faded. When PESCO was launched, much was made of the game-changing nature of its legally binding commitments in defence, but these have largely been forgotten.[5] There is also little pressure from the MS to see projects through to a successful conclusion, even though PESCO is supposed to be the framework within which the most ambitious European defence cooperation projects are conducted.
Outlook
The second strategic review of PESCO began in November 2023. The Council, while confirming the key role of PESCO as a framework for deepening defence cooperation between participating MS, concluded that it should be made more strategic, more effective, and better adapted to the new geopolitical reality beyond 2025.[6]
The Council also concluded that the current list of binding commitments needs to be updated and streamlined. They should include clear and measurable objectives to improve implementation and transparency, contributing over time to greater visibility and political ownership of the process. Commitments should also be added to reflect the need to strengthen the European Defence Technological and Industrial Base (EDTIB).
In addition, work should begin to better link PESCO with other EU defence initiatives and funding instruments, such as the EDF and the EDIP. PESCO projects should aim to address key capability gaps—those relevant to high-intensity warfare—and make best use of the opportunities for collaboration identified in the Coordinated Annual Review of Defence. Finally, the PESCO Secretariat (i.e., the EDA and EU Military Staff) should play a greater and more effective role in its PESCO-related tasks.
The MS also agreed to bringing Ukraine closer to PESCO, in line with the joint EU-Ukraine security commitments signed in June 2024.[7] This would mean facilitating Ukraine’s participation in projects in accordance with the existing legal framework.[8] This strengthened cooperation is intended to lead to the gradual integration of Ukraine’s defence technological and industrial base into the EDTIB.
The legally binding commitments in defence have largely been forgotten
The implementation phase of the strategic review started in February 2025. The European External Action Service is expected, by May 2025, to propose relevant amendments to the legal framework, in particular the Council Decision establishing PESCO, for agreement by the MS at the end of the year.
Already, though, it is apparent that the MS will find it challenging to implement such comprehensive Council conclusions so quickly, especially as they were unable to discuss concrete means to achieve objectives during the reflection phase. For example, they failed to agree on the number of new political commitments, and to what extent these should be simplified. And they were not able to find a way to establish a formal link between PESCO and EDF.
Conclusion
The MS have made important but discreet progress in defence cooperation under PESCO. Nonetheless, this progress has been most limited by their fundamental reluctance to cooperate meaningfully in defence. There is certainly consensus among the MS that PESCO could be more useful and visible, but there is little understanding of how to achieve this. What is certain, however, is that if PESCO is to embody a European commitment to common defence, the MS should find it easier to carry out a project within the framework, than outside it. At present, flagship defence cooperation projects such as the Future Combat Aircraft System and the Main Ground Combat Systems show that the MS do not entirely trust PESCO as a vehicle for cooperation on their most strategic defence efforts.
Meanwhile, under a new US administration, the possibility that Europeans will be let down by their most powerful ally has forced them once again to confront the question of their own strategic relevance. As part of their response, they must also adapt PESCO if it is not to become irrelevant for both common and collective defence. It may no longer be reasonable, for example, for MS to keep asking for PESCO commitments to emphasise the transatlantic relationship and to have greater connections with NATO. More importantly, the MS may need to rather quickly operationalise an EU framework for defence cooperation. If they do, they will also need to consider whether they are truly ready to trust the defence cooperation tools they have negotiated over decades and which have become quite impressive—on paper, at least.
Endnotes
[1] PESCO Secretariat, “PESCO Projects Progress Report,” July 2024.
[2] A project is closed when it has met its final objectives, or if it shows no progress and MS wish to stop.
[4] “European Patrol Corvette (EPC), Europe,” Naval Technology; Dominic Perry, ‘EDF seeks proposals for next phase of ‘A200M’ tactical transport programme,’ FlightGlobal, 21 March 2024.
[5] Sven Biscop and Beatriz Cózar Murillo, “PESCO: The Last Chance,” Egmont Institute, Policy Brief 34, April 2024.
[6] European Union, Council of the European Union, “Council Conclusions 14375/24,” 18 November 2024.
[7] European Union, European Council, “Joint security commitments between the European Union and Ukraine,” 27 June 2024.
[8] European Union, Council of the European Union, “Council Decision (CFSP) 2020/1639,” 5 November 2020.