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07 Mar 05. BROOKS TIGNER, BRUSSELS, Defense News reported that Europe’s defense industry is bracing for cuts to proposed European Union defense research funding, which was to reach €1bn ($1.3bn) annually by 2007. Budget battles with EU member states may force the European Commission, the bloc’s executive body, to halve its research plans in the next seven-year budget, according to EU and defense industry officials here. The commission may also stuff security research funding into the same account as space research, which would further reduce the scope of defense projects.

“It’s not looking good,” a European defense company executive said March 2. “All the signals of recent weeks point south for the idea.”

The commission endorsed the idea of using EU funds for security research a year ago, accepting a commission-sponsored report that proposed annual allocations of €1bn in 2007, rising to €1.4bn in 2012 — roughly matching the research effort of the U.S. Department of Homeland Security. Key areas for exploration include: networked communications, intelligence analysis software, space-based surveillance, and technology to monitor and protect critical infrastructure for airports, communications and energy. Political support across the European Union’s 25 national capitals for homeland security-related research remains solid, particularly after the March 2004 terrorist bombings in Madrid. But when the bloc’s richest states refused more funds for the EU’s overall 2007-2013 budget, the commission was forced to cut many budget categories, including security research.

Annual funding for security-related projects likely will slide to €400m to €500, said one policy adviser to Gunter Verheugen, the European commissioner for Enterprise and Industry whose department will oversee security research.

“But it’s still a moving target at this point” as commissioners jockey to preserve their spending priorities, the adviser said.

Haves and Have Nots

The struggle is part of the two-year-old budget battle between EU nations which contribute more money than they receive, and those who get more than they give. The former group is insisting that the 2007-13 budget be much leaner than the 2000-06 one, which equals 1.24 percent of the union’s gross national income (GNI). The EU’s six biggest contributors — Austria, Britain, France, Germany, Netherlands and Sweden — fired their opening salvo in December 2003, demanding that the next seven-year budget be kept to 1 percent of GNI.

The commission fired back with arguments that it cannot carry out its expanding responsibilities with less than 1.14 percent of GNI — preferably, 1.24 percent.
The stakes for security research will become clearer April 6, when the commission unveils its draft outline to fund the European Union’s rolling five-year research budget for 2007-11.

The budget will likely not be settled by July, despite the wishes of Luxembourg, whose six-month term in the union presidency expires in mid-year. But the outline will list planned spending for broad categories of research and lay out which smaller objectives will have their own funding line and those that will be combined. EU sources say security research may be rolled into a subcategory with space research, which could hurt its ability to compete for scarce funds.

“There are security and confidentiality rules that apply uniquely to security research,” Karl von Wogau, chairman of the European Parliament’s subcommittee on defense, said March 3. “While space research has its own confidentiality concerns, of course, it would not be wise to combine the two into the same funding program. I don’t think we would achieve the goals of homeland security that we want by doing so.”

The defense company executive agreed. “Combining security with space research within the framework would not be good news for us. It’ll make the definition and execution of d

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