America is warning Europe to drop a project that would boost military cooperation between EU nations, the Financial Times reports. In a letter to Brussels, US Under Secretary of Defense Ellen Lord says the plan—which involves creating new military equipment, military hospitals, and a spy school—would "produce duplication, non-interoperable military systems, diversion of scarce defense resources and unnecessary competition between NATO and the EU." Perhaps more importantly, Lord says the European Defence Fund and Permanent Structured Cooperation (or Pesco) includes "poison pills" that would bar American and other non-EU companies from these projects.
Lord added that Washington might impose counter-restrictions, while America's ambassador to the EU said US responses were unlikely to "be positive for either side." European officials countered that Pesco is just a response to Washington's demands that Europe put more effort into NATO. "The EU is actually at the moment much more open than the US procurement market is for the European Union companies and equipment," adds top EU diplomat Federica Mogherini, per Deutsche Welle. So far, 25 of the EU's 28 member states have joined Pesco, while the EDF is slated to get roughly $14.5 billion in the bloc's upcoming seven-year budget. (Read more NATO stories.)