Commission calls for work on European framework for defence equipment to be continued

Brussels, 12/03/2003 (Agence Europe) - Member States are engaged in the development of a strong and credible European Security and Defence Policy. This aim appears difficult to achieve without the support of a strong and competitive defence industry, without transparent market conditions and without a healthy investment climate in research and development. Such was the comment by Chris Patten, European Commissioner for External Relations, speaking on the adoption by the Commission, on Tuesday, of a communication setting out the major guidelines likely to contribute to the development of a European defence equipment policy. The Commission stresses in the communication that the ratio of cost-effectiveness of military spending, the preservation of a competitive industrial base in defence and technology, better access to EU products on third country markets, respect of ethics and equity in the arms trade, supply security, and the need to respect Member States' prerogatives in this sensitive area are all important considerations to be taken into account when defining such a policy.

In 1996 and 1997, the Commission had presented two communications on business undertakings in the defence sector in order to encourage industrial restructuring and the setting in place of a European defence equipment market, but these communications had little effect because of the reticence shown by Member States to give up their prerogatives in this respect. Since then, the European Parliament, in a resolution dated 10 April 2002, invited the Commission to examine the matter again. Also, the idea of creating a European Armaments Agency was discussed within the European Convention whose work, the Commission states, demonstrates that the time has now come to step up actions at EU level with a view to developing a European armaments policy.

Presented in this context, but also as Europeans display their differences over the Iraqi crisis, the new Commission communication seeks to sketch out the tracks necessary for laying the foundations for a European armaments policy that can support the gestating European Security and Defence Policy (ESDP). It mainly proposes:

• The provision of financial resources required for ensuring that the European manual on harmonisation of defence equipment is ready by 2004 and complementary measures adapted for its updating and use.
• The launching of a study from this year on to asses the impact of the existing rules and the different proposals and, depending on the results, tackle by end 2004 the development of an appropriate legal instrument to facilitate intra-Community transfer of defence equipment.
• Continue reflection on the application of the competition rules in the defence sector by taking into account of the specificities of this area and the provisions in Article 296 of the treaty, which stipulates that, "any Member State can take measures that it deems necessary of the protection of essential security interests and are related to the arms, munitions and war materials trade" but these "measures must not alter the conditions for competition in the common market and products that ate not specifically for military ends".
• Begin reflection on ways for rationalising the transfer of defence sector markets to national and Community levels. Taking into account the Decision of the Court in recent years that have particularly helped define the field of application of Article 296, the Commission has announced that at the end of the year it will be publishing an interpretative communication on the implications of these decisions. In parallel, it will be working to elaborate a Green Book that could be published in 2004 and which will serve as a basis for discussions with the parties concerned.
• In the ad hoc Council work groups, raise the issue of Commission participation in export inspection systems.
• Call on Member States, companies and the scientific community to help identify the common needs in research linked to global security. The Commission intends to set up a preparatory measure for coordinating this research at an EU level by focusing on a limited number of specific technologies lined to the Petersberg Objectives devised for carrying out ESDP.
• Continue work relating to a European framework for EU defence equipment, supervised by an agency (or agencies), to develop and expand (in the common) national initiatives - notably collaborative programmes and actions in research and development and equipment purchasing programmes in trade - using, when necessary, mechanisms and Community instruments.
• Last Friday, the Greek Defence Minister, Yannos Papantoniou, indicated that the Greek Presidency was seeking to put the setting up of a European Weapons Agency on the agenda of the European Spring Summit, as well as the release of Community funds for research in this sector. On this last point, Mr Papantoniou announced on Tuesday during a press conference that the Commission was proposing a grant of EUR 70 million for 2003. This proposal, he explained, would be integrated into the conclusions of the European Summit in March in Brussels or in those of next June, obviously following the approval by Heads of Member States.

Commenting on this communication the Commissioner responsible for enterprise, Erkki Liikanen, stressed that, "There is ample evidence that this is not the case at present and that a European defence equipment market would bring significant economic efficiencies. It is crucial for both civil and defence sectors of the economy that we create an environment in which European companies can give better value for money". He added: "By placing the issues clearly in the context of industrial competitiveness, the European Commission is signalling the importance it attaches to developing policies which will give European companies in the defence industries, whether prime contractors or part of the tens of thousands of SMEs in subcontracting roles, the opportunity to remain at the leading edge of advanced technologies and to compete on a the basis of fair competition".