Twenty-five European member states on Monday formally agreed to establish a European Union defense union, known as PESCO.

The Permanent Structured Cooperation could pave the way for the creation of a European army.

Read more: Can PESCO provide a new European identity?

What does this entail?

Officials have earmarked 17 joint projects that will fall under the scope of the PESCO agreement, including:

• a pan-European military training center
• common standards for military radio communication
• the creation of a German-led European medical unit and logistics hub
• an initiative to build up faster crisis response forces
• intelligence exchanges on cyber threats
• submarine drones

Read more: PESCO: EU paves way to defense union

'Sleeping beauty awakes'

The EU's High Representative for Foreign Affairs and Security Policy, Federica Mogherini called the decision "historic." 

European Commission President Jean-Claude Juncker hailed the move on Twitter, posting: "She is awake, the Sleeping Beauty of the Lisbon Treaty: Permanent Structured Cooperation is happening."

A historic step: The deal fulfills a 70-year-old ambition among European nations to integrate their defenses and marks the biggest move in two decades to help match the EU's economic and trade prowess with a more powerful military. 

Read more: Rex Tillerson reaffirms US commitment to EU at NATO meeting

What is PESCO? The alliance was first set out in the Lisbon Treaty — in effect the EU's constitution. It will allow member states to jointly develop military capabilities, invest in shared projects and enhance their respective armed forces.

Why PESCO is being discussed now: The shift in US policy under President Donald Trump — who berated European partners on military spending at a NATO summit in May — has intensified efforts to reduce an over-reliance on  Washington for protection.

The member states involved: Only three EU member states refused to sign up to the pact: Malta, Denmark and the UK, which is set to leave the bloc in March 2019.

What happens next: Money for PESCO could be provided by the European Defense Fund, which is expected to be signed on Tuesday. The initial projects are expected to be formally adopted by the European Council in early 2018.

Read more: Is Europe bold enough to counter US ambivalence?

rt/aw (AP, AFP, Reuters)