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Strategy seeks EU defense industry boost

EU governments agreed a landmark Strategy for Europe's Defense Technological and Industrial Base (DTIB) on 14 May 2007, describing it as a fundamental underpinning of Europe's security and defense policy and setting a series of practical steps to achieve their vision of a more integrated and competitive future.

EU defense ministers, meeting as the Steering Board of the European Defense Agency (EDA), have committed to working towards creating a true European DTIB, one that is integrated, specialized and interdependent. The Strategy foresees an industry driven by capability needs - the operational requirements of the Armed Forces of the future - competent to exploit the best technology quickly, and competitive both within and outside Europe. This would require more interdependence and more specialization at all levels of the supply chain, ministers agreed, with less reliance on non-European sources of key technology, but avoiding a "Fortress Europe" mentality, excluding imports or overseas co-operation.

Among the priorities established by ministers for early action were: Developing the depth and diversity of the European supply base by involving more small- and medium-sized enterprises and non-traditional suppliers; improving security of supply between member states and reducing unnecessary red tape for cross-border movements of defence equipment; assessing and mitigating the impact of offsets (requirements for defense imports to be compensated by national purchases or investments) and transparency in state aid to and ownership of defense companies to ensure fair competition, and; renewing efforts to harmonize and consolidate demand in more co-operative projects, with a particular priority on collaboration in research and technology (R&T).

During the meeting, Hungary announced that it had become the 23rd member state to subscribe to the inter-governmental regime on procurement in the European defense equipment market, which since July 2006 has been subject to greater transparency and competition through a voluntary Code of Conduct. Of the 27 member states, Spain, Denmark, Romania and Bulgaria still remain outside the system. The ministers stressed, however, that while competition was a tool for providing better value to the customer, sharpening industries and encouraging the evolution of the EDTIB, co-operation may often offer a better approach to the same ends.

On other issues, ministers gave their backing to a new European effort on Unmanned Air Vehicles (UAV) the focus of EDA research studies over the past two years. This new initiative, supported by the European Commission, will focus initially on the integration of UAVs into general air traffic, with a road map study to be launched immediately to look at the technological, political, legal and economic challenges involved.

During the meeting, ministers from 20 countries signed the formal agreement launching a €55 million Joint Investment Program for R&T aimed at force protection, which was approved in November 2006. This program is based on a new funding mechanism which will set a precedent for future collaboration in Defense R&T, in line with the Strategy agreed by the Steering Board. The signing clears the way for a first call for proposals to be issued in the coming days to more than 250 potential participants in the contributing countries.

"We can no longer decide on the equipment we need on a purely national basis, and then pursue separate national R&D programs and procurement," said EU Foreign and Security chief Javier Solana, the head of the EDA, who chaired the meeting. "As the document rightly says, this approach is no longer economically sustainable and, in a world of multinational operations, it is operationally unacceptable, too."

"This collaboration between the major European stakeholders has the potential to put Europe at the forefront of UAV airspace integration," Solana added. "The work of the Agency is gathering momentum and starting to make a real difference," said EDA Chief Executive Nick Witney. "The Strategy agreed provides an excellent foundation for us to work with member states on the much-needed transformation of how we manage the business of defense in Europe." (