When eight Rafale jets and four Mirages from France’s Armée de l’Air screamed over the North African coast, on 19 March, and blasted Libyan armoured vehicles with the opening shots of the international air campaign against Colonel Muammar Gaddafi, it seemed as if European defence could be entering a new era.

For the first time, the United States was taking a supporting role in what would soon become a NATO-led operation, leaving Europeans to take the lead. Spearheaded by warplanes from Britain and France, the bombing raids quickly turned the tide of the Libyan conflict, reversing Gaddafi’s counter-attack on the Eastern rebels and eventually toppling his regime.

The Europeans appeared to have responded in the clearest possible way to decades of complaints from Washington over the uneven security burden-sharing within NATO, exorcising the ghosts of the 1990s when American airpower secured an end to bloodletting in the Balkans after years of ineffectual European diplomacy. With French troops also taking decisive action in Ivory Coast and EU nations maintaining thousands of troops in Afghanistan, the Europeans seemed to be stepping up to the mark.

Within three months, however, as the air campaign dragged on without producing the expected rapid collapse of Gaddafi’s forces, Robert Gates chose to use his last speech after four-and-a-half years as US defence secretary to deliver a withering assessment of Europe’s military weakness, claiming the Libyan operation had only served to lay bare the yawning transatlantic gap in defence capabilities.

“The mightiest military alliance in history is only 11 weeks into an operation against a poorly armed regime in a sparsely populated country – yet many allies are beginning to run short of munitions, requiring the US, once more, to make up the difference,” Gates grumbled. “To avoid the very real possibility of collective military irrelevance, member nations must examine new approaches to boosting combat capabilities.”

As Gates explained, many European allies simply lacked the military hardware or trained personnel to be able to contribute meaningfully to the Libya mission. Those that did take part were found lacking in key areas, such as intelligence, mid-air refuelling or precision ammunitions, and were forced to turn to the US for help. It was a sign of a wider malaise in Europe’s underfunded and unreformed militaries.

The United States now accounts for 77% of all NATO defence spending, compared to 63% in 2001. With European public finances in the grip of an unprecedented crisis, military budgets are shrinking still further.

Eighteen of the 28 NATO allies have cut defence spending since 2008. Frank Boland, the alliance’s director of force planning, told members of the NATO Parliamentary Assembly in October that in 2011 only three countries would meet the alliance’s target of 2% of gross domestic product spent on defence. “The overall trends are not good,” Boland told the parliamentarians meeting in Bucharest, Romania. “We are facing a serious situation in terms of burden-sharing.”

In political terms, too, the Libya operations exposed European shortcomings. Germany’s decision to abstain in the UN Security Council vote on the Franco-British resolution authorising the military action was hard to equate with the concept of a common EU foreign and security policy. Opposition from Britain and Italy quashed any French hopes of running the air campaign under an EU rather than a NATO flag and efforts to put together an EU ground mission to facilitate deliveries of humanitarian aid came to nothing.

Even when Britain might have agreed with an EU role in managing the naval side of the operation, France’s top military solider said authorities in Brussels – including the High Representative Catherine Ashton – were unprepared or unwilling to take up the challenge. “In Libya, Europe’s Common Security and Defence Policy undoubtedly missed an occasion to play a role,” said Chief of Staff Admiral Édouard Guillaud.

“We were sure that several countries, including the United Kingdom, judged that the maritime embargo could have been carried out by the European Union,” Guillaud told the French National Assembly in October. “NATO and the United States agreed, the high representative did not pick up the ball and the military microstructure of the Union judged that proposing this solution was not part of its mandate. We should not miss such an opportunity next time.”

While NATO took charge of the Libyan mission, it has been a quiet year for the EU’s Common Security and Defence Policy. The initiative launched at the end of 2010 for coordinated pooling and sharing of military capabilities among EU nations to help cut costs has yet to yield many concrete results. The Weimar Triangle initiative in which Poland, France and Germany attempted to inject some new life into the CSDP has run into steadfast opposition from Britain to the suggestion the EU should have its own operational headquarters.

“There are those in Europe who are calling for the EU to take a greater role in Europe’s security,” then British Defence Secretary Liam Fox told the Conservative Party’s annual conference, on 5 October. “Let me tell you, Europe already has a guarantor of its defence – it’s called NATO. It is nonsense to duplicate and divert from NATO at a time when resources are scarce across Europe. And the last thing we need is more EU bureaucracy.”

Fox, a Eurosceptic hardliner, resigned soon after that speech, but there is little sign of London taking a more relaxed line on the idea of a European headquarters, which Britain has long regarded as a waste of money and threat to NATO.

Hopes that the Lisbon Treaty would give a boost to EU defence policy have not materialised. If communications policy is an indication, CSDP appears to be low on the priorities of Ashton and her team at the European External Action Service. On 20 October, the top Security and Defence news on the EAS website announced Ashton was scheduled to chair an EU Foreign Affairs Council, on 18 July. And the EU still has no dedicated defence spokesman, although a deputy to the EAS spokesman was appointed in September to deal in part with defence issues.

Despite the shortcomings revealed by the Libya mission, the Europeans can claim some notable successes in the fight against Gaddafi. They were able to mobilise their air forces quickly after the approval of the mission from the UN; civilian casualties seem to have been kept low, showing that lessons have been learned from operations in Iraq and Afghanistan; cooperation among European militaries at the sharp end of the operation impressed NATO planners; and the air forces of several European nations performed well. Gates singled out Norway and Denmark for providing 12% of allied strike aircraft, yet hitting about one third of the targets. Belgium’s F16 fighter pilots reportedly had a 97% percent success rate in striking their designated targets – the best of any participating nationality.

The mission was also successful in achieving its primary objective of preventing Gaddafi from exacting revenge on his rebellious subjects and eventually played a key role in his downfall.

European security policy will now face a real test in providing economic and political support for the development of a stable post-Gaddafi Libya, a challenge multiplied by the need for similar programmes for other Arab nations emerging from authoritarian rule this year. The EU may yet need CSDP missions to develop democratic judiciary services, police or armed forces, building on its experience in places such as Congo, Georgia or Afghanistan.

Against the positives, defence officials are seriously concerned about the capabilities imbalance revealed by the operation, in particular the lack of sophisticated intelligence, surveillance and reconnaissance resources, such as unmanned aircraft, which are now a standard part of the US arsenal, cruise missiles and other weaponry to suppress enemy air defences and air-to-air refuelling.

NATO’s Secretary-General Anders Fogh Rasmussen has declared the Libya mission a success and talked up the Europeans’ role, but he warns that without more effective defence spending they will find it difficult to run such a mission in the future.

“Operation Unified Protector has shown that European countries, even though they spend less on their militaries than the United States or Asian powers, can still play a central role in a complex military operation,” Rasmussen wrote recently in Foreign Affairs. “The question, however, is whether Europe will be able to maintain this edge in five or ten years.”

He added: “At the current pace of cuts, it is hard to see how Europe could maintain enough military capabilities to sustain similar operations in the future. And this touches on a fundamental challenge facing Europe and the alliance as a whole: how to avoid having the economic crisis degenerate into a security crisis.”

Recognising that the economic environment is not conducive to increased defence budgets, Rasmussen is urging allies to pursue what he calls “smart defence,” making better use of scarce resources, including through increased international cooperation, a concept which ties in with the EU’s pooling and sharing ideas.

In a report to the EU Foreign Affairs Council in June, Ashton insisted pooling and sharing “has become a necessity rather than a mere option […] multinational cooperation must become a reflex – the rule rather than the exception – if we want to preserve and develop Europe’s defence capabilities”. The report drawn up by the EAS echoed NATO concerns by stating that only a fraction of the €200 billion spent yearly on defence by European governments is resulting in forces that can be deployed on overseas missions.

On paper, European defence ministers agree. In May, they issued a statement calling for application of pooling and sharing on a “systematic and sustainable basis”. In practice, however, it is proving politically sensitive. Pooling and sharing implies nations would no longer seek to arm themselves with a complete defence arsenal, but would instead rely on their neighbours to provide for them.

Some EU nations have long applied the principle, for example the Baltic states decided not to spend scarce resources on costly fighter planes, so their NATO partners take turns to provide air policing. The Dutch and Belgians have pooled naval resources since the 1990s. Military heavyweights France and Britain last year signed their landmark cooperation agreement to pool aircraft carriers and train joint expeditionary forces. At the EU level, however, progress has been slow and small scale, leading to calls for a more systematic approach with clear targets and deadlines.

France, Poland and Germany stressed the need for pooling and sharing in their drive to give fresh impetus to European defence policy. “We want the Union, with the broad range of instruments at our disposal, to enhance its contribution to international peace and security and to develop its capacity to tackle the challenges of its security,” foreign and defence ministers of the Weimar Triangle said in a letter sent to Ashton at the end of last year.

Italy and Spain later joined the group, but although the three stressed the need for “full complementarity” with NATO, their idea of creating a permanent operational headquarters to run EU missions was firmly rejected by the UK. Suggestions that the other nations could move ahead without British participation using the ‘permanent structured cooperation’ tool included in the Lisbon Treaty have made little headway, given Britain’s crucial role as the EU’s leading defence spender.

While that conundrum continues, bilateral cooperation seems sure to make more progress than EU defence policy.

“Military Europe is not limited to the UK, but today the other countries don’t want it. For the moment we have to move forward with the British,” Guillaud said in his meeting with French parliamentarians. “I consider that European defence is in a sort of hibernation, but we will have to wake it up one day. I’m waiting for the European spring.”

“The overall trends are not good. We are facing a serious situation in terms of burden-sharing”