14 European Defence Agency
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| Report by the Head of the European Defence Agency to the Council
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| Legal base | — |
| Department | Defence |
| Basis of consideration | EM of 23 May 2007 and Minister's letter of 22 May 2007
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| Previous Committee Report | None; but see (25696): HC42-xxii (2003-04), para 4 (9 June 2004) and (25035): HC 63-xxxviii (2002-03), para 18 (19 November 2003)
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| Discussed in Council | 14 May 2007 GAERC
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
14.1 The Thessaloniki European Council in June 2003 tasked the
Council with creating an intergovernmental agency to develop defence
capabilities for crisis management, to promote and enhance European
cooperation on armaments, to strengthen the European defence industrial
and technological base and to create a competitive defence equipment
market. It should also promote research aimed at "leadership
in strategic technologies for future defence and security capabilities,
thereby strengthening Europe's industrial potential in this domain".[28]
Previous consideration
14.2 Our predecessors considered the European Defence Agency on
several occasions, finally recommending the Joint Action establishing
it for debate in the European Standing Committee B in June 2004.[29]
That debate took place on 22 June 2004. The EDA was formally established
in July 2004.[30]
14.3 The establishing Joint Action spells out:
- how the Agency will perform
its four key tasks — capabilities, armaments, defence industrial
issues, and research;
- staffing and organisational structure, including
its relationship with existing European Security and Defence Policy
(ESDP) bodies. The Agency would be headed by the Council Secretary
General (and High Representative for Common Foreign and Security
Policy), Javier Solana;
- budgetary and financial rules;
- arrangements for the establishment of ad hoc
projects and budgets; and
- the EDA's relations with the European Commission,
third states and organisations and entities; like the Institute
for Security Studies and the Satellite Centre — the other
two bodies set up to support the Common Foreign and Security Policy
— the Agency has its own legal personality, independent
of the Council Secretariat.
14.4 At that time, the then Secretary of State for
Defence (Mr Geoffrey Hoon) said that the UK had contributed extensively
to shaping the project and its implementation, and that the Agency
would play a key role in rationalising and harmonising capability
requirements under the EU capabilities development process, and
linking those directly to industrial and research efforts, which
help improve the military effectiveness of both ESDP and NATO.
14.5 He further explained that the Agency would be
directed by a Steering Board of national Defence Ministers, as
the individuals with the political authority, policy expertise
and financial means to ensure that Agency recommendations were
implemented by national governments. The Steering Board would
act under the authority of the Council, which would issue guidelines
and decisions by unanimity. Most subsequent decisions would be
taken by qualified majority voting, to prevent policy recommendations
being held hostage to specific national concerns, although any
Member State would be able to block a recommendation detrimental
to key national interests. Projects would be identified and financed
on an opt-in or opt-out basis, preserving the right to participate
or not according to the UK's national interest in each particular
case.
14.6 He added that the Government attached great
importance to the Agency working effectively with NATO, under
the overall framework of cooperation and consultation between
the EU and NATO. The Government also fully supported the establishment
of such relations between the Agency and third states that would
enable them to take part in ad hoc projects and in substantial
consultations, including the gradual integration of the activities
of the Western European Armament Group (WEAG) and Western European
Armament Organisation (WEAO) into the Agency.
14.7 In the Standing Committee debate, he noted that
the agency would deal with future capabilities, saying that, for
the benefit of NATO as much as for the benefit of the European
Union, it was necessary to identify what kinds of military capabilities
European nations would require in the sort of conflicts and operations
in which the EU would engage. He argued that the European Union
nations needed to work together to develop such future capabilities,
or fall further behind the US; and that the development by the
European nations of the right sort of military capabilities to
allow them to participate in the sort of conflicts that Europe
might face, was as vital to the US as it was to the EU. He went
on to say that it was also vital for the Agency's work to be coherent
and compatible with similar initiatives in NATO, which would be
facilitated by the fact that most of the EDA Defence Ministers
would also be sitting as part of the North Atlantic Council in
NATO, noting that those Defence Ministers had only one defence
budget and would want to ensure that whatever spending they made
was "absolutely coherent as to their obligations to NATO
and the EU".[31]
14.8 Since then, our attention has been devoted to
a related Commission enterprise on the European Defence Equipment
Market — its Interpretative Communication on the application
of article 296 of the Treaty in the field of defence procurement
— most recently at our meeting on 21 February 2007.[32]
This stems from the Commission's Green Paper 13177/04 of 23 September
2004 on Defence Procurement, which in turn followed its May 2003
Communication 8484/03, "European Defence — Industrial
and market issues — towards an EU defence policy",
the aim of which was to improve the EU regulatory framework so
as to promote a robust, internationally competitive "Defence
and Technological Industrial Base". The Committee cleared
this on 4 June 2003, noting that the Government remained committed
to promoting a non-interventionist model and to overcoming the
obstacles to effective market access overseas.[33]
14.9 The most immediate tie-in is with the EDA Code
of Conduct on Defence Procurement. This was agreed on 21 November
2005; according to its website, the EDA's 24 participating Member
States (pMS) agreed on the need for decisive progress towards
creation of an internationally competitive European Defence Equipment
Market, as a key means to strengthen the European Defence Technological
and Industrial Base and, recognising that a significant proportion
of their defence procurement takes place outside EU internal market
rules, on the basis of Article 296 EC decided "without prejudice
to their rights and obligations under the Treaties, to establish
a voluntary, non-binding intergovernmental regime aimed at encouraging
application of competition in this segment of Defence procurement,
on a reciprocal basis between those subscribing to the regime".[34]
14.10 So far as the EDA is concerned, we have continued
to receive regular reports from successive Defence Secretaries
and Ministers as part of the Government's agreement — in
responding to the House of Lords Select Committee on the European
Union special report on the EDA — that it would deposit
the Agency reports to the Council referred to in Article 4 of
the EDA Joint Action: its May report on activities during the
previous and current year and its November report on current year
activity and "draft elements" of the work programme
and budgets for the following year; and the Council's annual guidelines
to the Agency that set the framework for its work programme. They
have also taken to writing ahead of and after EDA Steering Board
meetings, setting the scene and reporting the outcome of each
Steering Board meeting.
The Minister's letter and Explanatory Memorandum
14.11 The letter of 22 May and Explanatory Memorandum
from the Minister for Defence Equipment and Support (Lord Drayson)
deals with the Head of the Agency's progress report on the Agency's
major initiatives, which he says was noted by the "defence
ministers" GAERC on 14 May. Key areas touched upon include:
— the
development of long-term strategies, including the Capability
Development Plan and the European Defence Industrial and Technological
Strategy ;
— initiatives launched in 2006, including
the Joint Investment Programme on Force Protection and the Code
of Conduct on Defence Procurement; and
— progress on specific project activities,
such as the development of a new approach to strengthen European
capabilities in the field of Unmanned Aerial Vehicles (UAVs).
The Government's view
14.12 The Minister says that the Capability Development
Plan (CDP) follows on from the work on setting a Long Term
Vision (LTV) for European Defence Capability and capacity needs,
"which seeks to provide a context within which to shape nearer-term
industrial, technological and investment decisions". He says
that "the UK is actively involved in this work and we are
seeking to establish how we can support some of the key work strands
involved" and "feels this is important work which has
the potential to provide the necessary link between the EU planning
process and long term capability work conducted in the EDA".
14.13 He says that the UK has endorsed work on a
European Defence Technological and Industrial Base (EDTIB)
Strategy, which he sees as an important element of the Agency's
ongoing work to develop a rationalised, more efficient and responsive
EDTIB. "The UK noted the requirement to encourage European
defence industry to realign to meet changing capability requirements".
14.14 He regards the European Defence R&T
Strategy as "consistent with the UK's work on our own
Defence Technology Strategy. The UK is leading this work, on behalf
of the Agency, with some of our other European partners, which
should produce some initial results over the summer".
14.15 Explaining that the Joint Investment Programme
on Force Protection is "a project for a range of protective
measures for soldiers on the ground including physical, electronic,
weapons and training", he says that, with work already underway
in all the technical areas described, the UK has consequently
declined to participate. He nonetheless looks forward to monitoring
the progress of the project "as an example of a new method
of undertaking European defence R&T collaboration".
14.16 He says that "the UK has been very supportive
of the EDA work on the European Defence Equipment Market (EDEM)",
signing the Code of Conduct on Defence Procurement in June 2006
and utilising the Electronic Bulletin Board (EBB) mechanism, and
supporting the EDA in their launch of the second phase of the
EBB that enables industry to advertise subcontractor opportunities
across Europe.
14.17 Finally, he says that the Steering Board supported
a proposal on Unmanned Aerial Vehicles (UAVs) for a combined
effort between the Commission, the EDA and industry to produce
a study into the issues surrounding UAVs flying in regulated airspace
alongside manned commercial aircraft. He says that the Government
shares the objective of allowing UAVs to fly in controlled airspace
by 2012, welcomes the study as an important step forward and sees
the EDA as playing a useful role in developing global standards,
this being an area in which European industry has genuine capability.
14.18 The Minister notes that the Head of the Agency
will submit his next report on activities undertaken in 2007 to
the Council in November, when the EDA's 2008-2010 Financial Framework
is also expected to be discussed. From earlier letters from the
Minister, we are aware that this is an issue which relates not
just to quantum but also to the way in which the EDA should operate,
with some Member States wishing it to have much more than its
present, essentially coordinating role. It is perhaps this that
Dr Solana has in mind when he concludes that the agency is now
demonstrating itself to be a highly effective instrument, "which
will be as productive as we are ambitious for it".
Conclusion
14.19 We have not judged it worthwhile hitherto
to bring these various Communications to the attention of the
House. However, the EDA is now nearly three years old; indeed,
its establishing Joint Action is due for review by July (though,
following only three years of operation, the likely initial assessment
is that it does not require any amendments at this stage). Moreover,
while it is by now clearer how it would begin its activities,
it is by no means clear how it will develop over the longer term.
As well as needing to settle its medium term financial framework,
there will be changes to and strengthening of the senior management
in the autumn, when the contracts of the original chief and deputy
chief executives come to an end.
14.20 Moreover, we note that our colleagues in
the Defence Select Committee are currently engaged in an inquiry
that will examine the role, purpose and relevance of NATO in the
post-Cold War and post-9/11 world, which as well as considering
what role NATO should play in the future of UK and European defence,
will also look at the relationship between NATO and the European
Security and Defence Policy and NATO's relationship with the European
Union, including how effectively the two organisations work together.
14.21 Given this and their active interest in
the UK's defence industrial base, the role of the EDA, the emphasis
by Ministers on the importance of coherence with NATO activity
and the stage the EDA has now reached, we considered that, on
this occasion, a Report to the House was warranted.
28 Presidency Conclusions - Thessaloniki, 19 and 20
June 2003, paragraph 65 (SN 200/03). Back
29
(25696): HC42-xxii (2003-04), para 4 (9 June 2004). Back
30
Joint action to set up a European Defence Agency (EDA), adopted
by the Council on 12 July 2004. Back
31
Stg Co Deb. European Standing Committee B, 22 June 2004, cols
21- 22. Back
32
(28212) 6223/07: HC41-x (2006-07) para 9 (21 February 2007). Back
33
(24451) 8484/03: HC63-xxiii (2002-03), para 22 (4 June 2003). Back
34
For full details, see http://www.eda.europa.eu/genericitem.aspx?area=Organisation&id=153.
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