With regard to defence spending, Government policy is defined within the parameters of our national budgetary process and role of Dáil Éireann. Within the EU, it is accepted that defence and security is a national competence, including national spending on defence and security.
As part of Ireland's participation in Permanent Structured Cooperation (PESCO), Ireland has committed to regularly increase our defence budgets in real terms. It should be noted that regularly does not mean annually but rather over the medium term. The allocations for defence announced in the budget for 2018 mean that Ireland’s defence expenditure will increase in real terms over the coming three years.
The PESCO notification clearly states that PESCO does not prejudice the security and defence policy of the member states; that the member states remain sovereign; and that the commitments will be implemented fully in accordance with the Treaty, its protocols and the constitutional provisions of the Member States. This includes PESCO commitments made in relation to defence spending.
Under PESCO, Member States have also made commitments to collective benchmarks such as increasing defence investment expenditure to 20% of total defence spending and 2% of total defence spending allocated to research and technology. These shared commitments are for the EU as a whole rather than individual Member State Benchmarks. The commitments in the notification are political in nature and effect.
In relation to Athena, as the Deputy is aware, this is the mechanism which administers the financing of common costs of EU operations having military or defence implications, on behalf of EU Member States contributing to the financing of EU military operations. These costs can include transport, infrastructure, and medical services, as well as the Nation Borne Costs, such as lodging and fuel.
The rules on contributions to Athena are set out in article 41.2 of the Treaty on the European Union. Member States contribute an annual share based on their Gross National Income. Therefore if common costs rise or our GNI key increases, then our contribution will rise accordingly.
A Report from the Parliament titled 'The next MFF: Preparing the Parliament’s position on the MFF post-2020' which may be the report the Deputy is referring to, does not reference that 2% of GDP be allocated to defence spending. However, on 8 November 2016, the European Parliament passed a resolution on the European Defence Union where it was suggested that MS should devote 2% of GDP to defence. Such suggestions have no implications for Defence spending in Ireland which, as I stated above, is a national competency.