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NEW EUROPEAN DTIB BASE VITAL

26 Feb 07. MoD Defence Contracts Bulletin reported that the time has come to create a truly European defence technological and industrial base (DTIB), one which is more than the sum of the separate national industries, Günter Verheugen, Vice President of the European Commission, told delegates at the European Defence Agency (EDA) conference in Brussels.

Mr Verheugen said that, while Europe retains a widely capable defence technological and industrial base, made up of several world class companies and facilities, it is far from having the strong, globally competitive technological and industrial base that we need to fulfill our ambitions and preserve our options for the future.

According to the Commission Vice President, the problem lies in the fact that the defence programmes, procurement and industrial alliances in Europe are shaped by and large by national decisions and policies. This results in the costly and unnecessary duplication of research and technology, as well as in the development and production of equipment. For example, in the EU there are four different battle tank programmes and 23 national programmes for armoured fighting vehicles. By adding other examples, the EU has a total of 89 weapons programmes compared to only 27 in the US.

Ultimately, the fragmentation causes Europe to lose its competitive edge, since it is unable to exploit economies. Mr Verheugen argued: “If we continue along the current path, the present fragmented industrial bases in Europe will not be sustainable. This will be the true heritage of duplication on a national level and the lack of a European defence equipment market.”

While it is up to EU Member States first and foremost to take action to pool their resources, the European institutions and agencies also have a role to play. The creation in 2004 of the EDA and its rapid development since then, Mr Verheugen said, confirmed that the EU is the right framework to enhance European armaments cooperation and to develop defence capabilities in the field of crisis management.

He noted with optimism the consensus reached by EDA participating Member States on the need for less duplication, more specialisation and more mutual dependence in Europe’s defence technological and industrial base. This would meet EU goals both for overall competitiveness and security and defence.

Mr Verheugen urged: “The Agency has to progress even faster towards leadership over a real pooling of efforts in the areas of research, technology and procurement. This is necessary if it is to fulfil its potential to put an end to the splintering of national resources and thereby promote the necessary restructuring towards a European DTIB.”

Also likely to boost the European defence industry is the increased funding available for security, space and aeronautics under the EU’s Seventh Framework Programme (FP7). For security research alone, funds have increased more than 13 fold since FP6, from •15 million to •200 million. Mr Verheugen said he hoped to see FP7 and the EDA programme working side by side to address similar or complementary technologies: “Through a non-bureaucratic cooperation mechanism with the EDA we can avoid duplications and identify synergies.”

Other developments that are expected to bring about necessary change to the defence industry include the forthcoming defence procurement directive and the regulation on intra-EU transfer of defence goods.

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