Defence is at the heart of the sovereignty of a State. In the case of an organization like the European Union, for a Member State to give up a part of its sovereignty is very complicated. Therefore, for EU Member States, choosing to give up part of their autonomy and control on it is not an effortless decision to make. The involvement of EU in Defence is represented by policies and instruments to help maintain shared positions and, at the same time, a good level of autonomy for each State. The strategic environment and the fast changing of the international and regional equilibrium needs a serious and real response from many actors. Against the big powers, EU should develop a more stable approach towards the security challenges that it is facing today, like a credible EU’s Common Security and Defence Policy (CSDP) more compatible with NATO and its principles.

The idea of developing a comprehensive approach to react against the new threats definitely involve the Defence sector. In particular, defence must be necessarily aligned to the international standards, especially on the equipment side. The technological advancement of other countries, like US and China, asks for a technological development of the European defence sector, a goal that now seems hard to achieve due to the crisis in public spending that led to a cut in the defence budget. The cuts had serious impacts on the industries that develop equipment for armed force. In particular, the reflection of these cuts had consequences on programmes related to R&D sector and stopping the development of capabilities for the future. In the meantime, the cost of modern capabilities increase. In addition, the fragmentation of Europe asks for a major effort, since the situation needs new solutions: the budget constraints must be rebalanced by cooperation with actors at the regional and international levels, through a more efficient use of resources and market integration. By opening up to the EU-wide competition and cooperation, the possibility to reinforce the defence technological sector should be easier.

In this framework, on 24 July 2013, the European Commission the Communication adopted “Towards a more competitive and efficient defence and security sector[1], which provides the Commission proposals to boost the internal market and re- launch the competitiveness of the defence and security industries. The new policy has the aim to promote competition, innovation and provide an industrial base for the CSDP. At the same time, EU wants to offer more support to the small and medium-sized enterprises (SME’s) of the sector.  The basis of the Communication mentioned above, is the “Defence Package”.[2]

The Defence Package, adopted in 2007 by the European Commission, consists of two directives, useful to introduce new rules for trade and procurement of contracts in the defence sector: EU Defence and Security Procurement Directive 2009/81/EC[3] and the Simplifying terms and conditions of transfers of defence-related products within the Community Directive 2009/43/EC.[4] By strengthening the competition of the European market, the bureaucratic burdens will be less strict given that the patenting regime should be simplified, especially for the transfers of defence products within EU. Since 2007, the idea to reinforce the role of SMEs in defence contracts were facilitated through new modalities. Notwithstanding these new measures, the fragmentation of the European market was not be stopped. However, this package represents the first stage for the establishment of a new legislative framework to improve competitiveness and ask for more transparency by the States. [5]

On March 2014 a High Level Conference took place to present the Commission’s ideas on implementing the Communication of 2013, to collect especially the impressions from stakeholders. The Report[6] adopted is a roadmap, which outlined the Commission’s tasks to boost the market for defence and to promote a major competitiveness, and to strengthen the coordination at a dual Level given the increasing number of missions involving a civil/military cooperation at various levels. Even though the number of defence activities will increase, the industrial landscape – on the other hand – will not change in a positive way, because of the economic and financial constraints.

The Report led to the adoption of a Roadmap[7](adopted in 2014), which was rediscussed in June 2015 in the European Council. Thanks to this last document, there is hope that the internal market will be less fragmented in this field within EU, making it more competitive and giving more support to the Small and Medium Enterprises. European Countries should, according to the document, save money through common standards and certification and building clusters.  A special part is dedicated to SMEs, which will gain a better access to markets within and outside the Union, and will improve their access to EU funding. Although national governments preserve primary responsibility for defence and security, they should also align to the international standards, and EU will contribute in related area, especially in R&D programmes to guarantee so.

The industrial defence sector has the potential to provide an important contribution to regional economic development. This highlights the necessity to make the industry more competitive – as it has been noticed by the Commission – and became a necessary prerequisite to achieve the goal of improving the European’s defence capabilities. This is possible only thanks to the European Defence Technological and Industrial Base (EDTIB), which supplies the major part of the equipment to the European armed forces. The only limit to the EDTIB is related to budget needs. Hence, it is necessary to adapt the budgets to the European economic asset and, consequently, to the national economic asset. The necessary development of EDTIB is under the direct responsibility of the European Defence Agency (EDA)[8],which is supposed to help and strengthen the EDTIB, bringing forward related policies and measures, and improving the effectiveness of military expenditure.[9]

The Agency is working on the advancement of the industrial and technological base since 2007, promoting a series of projects to better understand the needs of the defence sector in every single country. What was noticed since the beginning is the importance of a wide integration with the civil sector not related to Defence. The strategy launched underlined the importance to prioritise the military capability needs, identifying both the key technologies and the key industrial capabilities to improve the development of the industry in Europe. Only at this point will it be easier to consolidate the demand and to increase the investments, the competition and the cooperation.[10]

The importance of being a main element in ensuring the security and the protection of values and interest of Europe underlined that it is the moment for all the European Countries to become a more credible and reliable partner and to develop a major strategic independence. To do so, Europe should guarantee, within Europe, a security of supply and most safe access to critical technologies, while preserving the operational sovereignty.[11]

One of the issues related to the development of a common Defence industry is the procurement contracts. In this field, they are characterised by a major complexity, especially because of the involvement of NATO [12] since the standardisation to the Alliance’s standards is relevant to the defence industries who technically support the Alliance’s Member States. The European rules on procurement have introduced new rules for contracts in this sector, to help the development of businesses of the Member States. Great flexibility, specific rules on the security of sensitive information, clauses on security of supply and rules on subcontracting are the forewords of the Directive 2009/81/EC, mentioned beforehand. This Directive may exempt the procurement of defence and security when it is necessary to preserve and protect the national interest, but it applies only if the case is not contrary to the art. 346 of the Treaty on the functioning of the European Union.[13] Directive 2009/43 / EC is also related to the intra-EU transfers. The discipline introduced simplifies and unifies the conditions and procedures for transfers within EU, building a system that provides a system based on three types of patents: the general patent (acquired in all the case with no exception), the global and the individual ones (given just in special cases, when it is required).

Besides the crisis and the related consequences, as well as the efforts that every single country makes, it is fundamental to continue to encourage the cooperation and to pursue the modernization and standardization of the sector to make it grow.  It could be an idea to create an internal market of security and defence, improving and simplifying more and more the transfers within EU, supporting SMEs, promoting the formation of more clusters and partnerships between the civil and the military sectors. Another point to develop is the importance to guarantee a better allocation of national and communitarian funds for R&D projects on defence, military and civil cooperation, and on new subjects such as space and energy, in particular the developing of projects in these fields in the framework of the European programme “Horizon 2020”.

If the European Union will be able to pursue these objectives, in the mid-term or in the long-term, every single country will probably have an import return on the economic side, since it would be more affordable in terms of time, to obtain certification or patents. On the other hand, the industry will probably continue to be affected by the economic constrains, but will also probably open up to new collaborations which will make possible the development of the sector in total and of the single enterprises. Increasing the effectiveness of the industry and improving the development of the defence capabilities will strengthen even the security of EU and will – hopefully- represent a good first step towards the real development of the CSDP.

Alessandra Vernile

Master’s degree in International Relations (LUMSA)


Notes

[1] Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions towards a more competitive and efficient defence and security sector, Eur-Lex, July 24, 2013. http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52013DC0542

[2] Directorate-General for External Policies – Policy department, “The impact of the ‘defence package’ Directives on European defence”, Europarlament, 2015. http://www.europarl.europa.eu/RegData/etudes/STUD/2015/549044/EXPO_STU(2015)549044_EN.pdf

[3] Directive 2009/81/EC of the European Parliament and of the Council, Eur-Lex, July 13, 2009. http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32009L0081

[4] Directive 2009/43/EC of the European Parliament and of the Council, Eur-Lex, May 6, 2009. http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32009L0043

[5] Jay Edwards, “The EU Defence and Security Procurement Directive: A Step Towards Affordability?”, Chatham House, August 2011. https://www.chathamhouse.org/sites/files/chathamhouse/0811pp_edwards.pdf

[6] Report about A New Deal for European Defence Implementation Roadmap for Communication COM (2013) 542; Towards a more competitive and efficient defence and security sector, Eur-Lex, June 24, 2014. http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52014DC0387

[7] Ivi. http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52014DC0387

[8] The European Defence Agency (EDA) was created in 2004, after the adoption of the Joint Action 2004/551/CFSP. The principal tasks are the development of the defence capacity of the Union; the promotion and the strengthening of the European cooperation on armaments; the strengthening of the defence technological and industrial base to create a common market for the defence related products, with good competitive role at european and international level; boost the R&D sector in the defence related field. See:  http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=URISERV%3Ar00002

[9] Treaty of Lisbon, December 13, 2007. http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A12007L%2FTXT

[10] “What we do”, European Defence Agency. http://www.eda.europa.eu/what-we-do

[11] Andrea Frontini, “Il consolidamento dell’industria europea della difesa”, Panorama, quoted by Italian Defence Ministry, 2013. http://www.difesa.it/InformazioniDellaDifesa/periodico/periodico_2012/Documents/Panorama_2013/frontini.pdf

[12] The reference is to the NATO Defence and Planning Process, which is the primary means to identify the required capabilities and promote their timely and coherent development and acquisition by Allies. See: http://www.nato.int/cps/en/natolive/topics_49202.htm

[13] “Consolidated version of the Treaty on the Functioning of the European Union”,Eur-Lex, October 26, 2012. http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A12012E%2FTXT