House of Commons - Defence - Written Evidence

Select Committee on Defence Written Evidence

Memorandum From Open Europe

EXECUTIVE SUMMARY

Developments in European foreign and defence policy are moving rapidly. It is widely acknowledged in Europe that the rejection of the EU Constitution by French and Dutch voters in 2005 did nothing to slow down progress in this area.

This is of concern because over the last few years the UK has moved away from its traditional partnership with the US in defence procurement, preferring instead to develop and procure technology in partnership with its EU allies. The EU is now looking to cement this tendency into binding commitments, through the development of European Defence Agency initiatives—such as commitments to pool resources and research initiatives and to open up national tendering processes to cross-border competition—as well as new ESDP-related initiatives such as the new EU space policy. The EU is also setting up parallel headquarters, including a planning HQ and has already set up a military staff.

While less than 15 years ago there was no EU foreign policy budget to speak of, by 2000, the EU was spending nearly €5 billion of its budget on foreign policy. This year the figure is €6.8 billion[42] and by 2013 it will be more than €8 billion. There are now as many staff working on CFSP and ESDP in all the different EU bodies in Brussels and beyond as in the Foreign and Commonwealth Office.

We believe there are three questions which should be asked about European Defence:

(i) Is European defence developing in the way that the UK Government suggested it would?

vis-a"-vis

(iii) Do the UK Government's strategic objectives for European Defence match those of its partners?

Is European defence developing in the way that the UK Government suggested it would?

In this paper we argue that over the last 10 years the Government has broken promise after promise about the conditions in which an EU defence policy would operate. In several areas EU defence has developed in ways which the Government said it would not.

What the UK Government said What actually happened

Peacekeeping missions only

Tony Blair said the Rapid Reaction force would operate only "in respect of peacekeeping and humanitarian missions" (Telegraph, 22 November 2000) The RRF project turned into the EU "Battlegroups"
When asked to respond to a claim by Javier Solana that the EU's battlegroups would never go to war, NATO's General Secretary Jaap de Hoop Scheffer, said, "I don't believe that to be true. Why do you think the EU is creating battlegroups? It's not just so that they can reconstruct a country. The battlegroups are not going to rebuild schools"(El País, 10 March 2005)

Independent EU planning HQ

"Operational planning is a matter that will be the responsibility of NATO" (Geoff Hoon, The Sun, 29 March 2001)

"The EU military staff will not do operational level planning, nor will it provide command and control structures" (Keith Vaz, Hansard, 19 March 2001)

"There is no central integrated command" (Robin Cook, Telegraph 22 November 2000) The EU has its own operational planning cell, explicitly independent of NATO.

Belgian Prime Minister Guy Verhofstadt said, "I compare this cell for the planning and conduct of common military operations to the European Central Bank. Twenty years ago, we started off with a Monetary Institute, with a degree of ambition which was lower even than that of the military cell. It has grown into the ECB we all know" (Agence Europe, 17 December 2003)

EU merger with the WEU

"Getting Europe's voice heard more clearly in the world will not be achieved through merging the European Union and the Western European Union or developing an unrealistic common defence policy" (Tony Blair, Hansard, 18 June 1997)

"We stopped the merger of the Western European Union with the European Union and prevented the European Union from becoming a defence organisation" (Robin Cook, Hansard, 4 December 1997) The WEU has been fully merged into the EU.

The Satellite Centre in Spain and the Institute for Security Studies have been transferred to EU control.

NATO right of first refusal

"It is only [for] when NATO decides as a whole that it does not wish to be engaged" (Tony Blair, Telegraph,22 November 2000) "There is no question of a right of first refusal. If the EU works properly, it will start working on crises at a very early stage, well before the situation escalates. NATO has nothing to do with this" (General Jean-Pierre Kelche, France's Chief of Defence Staff, Telegraph, 28 March 2001)

In 2003 an unnamed UK Government official admitted, "The French won't concede that NATO has the right of first refusal" (Times, 3 December 2003)

EU symbols

"No European cap badges, no European flags " (Geoff Hoon, 22 November 2000) "The EU's blue flag and 12 golden stars will for the first time decorate the lapels of the troops" (FT report, 31 March 2003)

Steps to a common defence

"[There is] no such concept called a European army" (Tony Blair, Times, 13 October 2003)

"There is a specific undertaking not to create a European army" (Geoff Hoon, PA, December 19 1999) "If you don't want to call it a European army, fine. You can call it Margaret, you can call it Mary-Ann" (Romano Prodi, Independent, 3 February 2000)

"The EU should have its own army from countries which accept a common defence" (Romano Prodi, Speech, 9 May 1999)

"A European army legitimised and financed through the European Parliament is the visionary goal ... The European army should have joint structures that go beyond the ones already in place. Therefore there is a need for a joint defence system, common legislation and standardisation" (German Defence Ministry planning document, NATO website, 30 April 2003)

"We need to begin with the European defence policy—which has to finally lead, in reality, to a common defence. That will take place through the plans specified in the European Constitution: The developing European arms agency, the solidarity and mutual defense clauses, the armed force for the protection of Europe, and the European general staff" (French Foreign Minister Michel Barnier, Welt am Sontag, 13 March 2005)

Have fears about Duplication, Decoupling, and Discrimination been realised?

Serious problems with duplication have emerged, in terms of NATO's military planning structures, arms procurement programmes and strategic initiatives. By establishing its own structures and programmes the EU is also steadily decoupling itself from NATO and the US and discriminating against non-EU arms suppliers and partners.

Examples of duplication of planning and command structures include the creation of the EU "Situation Centre", the "Civil/Military Cell", the EU Military Staff and the EU Operations Centre. Duplication of military hardware and procurement programmes includes the A400M (needed for independence from NATO), the Galileo project and the EDA's efforts to coordinate research and spending on future assets such as unmanned air vehicles. The duplication of initiatives includes the EU battlegroups, which the UK has committed to provided troops for, despite its commitments in Afghanistan and Iraq.

Decoupling is also an issue. There are clearly important tensions between NATO and the EU. NATO Secretary General Jaap de Hoop Scheffer said in January this year that "There are some who deliberately wish to keep NATO and the Union separate from one another. For the proponents of this attitude, a strengthening of relations between the two would give excessive influence to the United States."

Discrimination against non-EU members. Through European Defence Agency initiatives the EU is steadily increasing its powers over national procurement and defence research and technology, which threatens to lead to protectionism and discrimination against non-EU suppliers and sources of key defence technologies.

Is European Defence leading to higher spending?

The Foreign and Commonwealth Office's Guide to the EU argued the development of European defence "should help encourage other European countries to spend more on defence." However, so far there is little evidence to suggest that efforts to build a more integrated European defence policy are actually fulfilling objectives to increase Europe's military capabilities and defence spending.

NATO figures show that defence spending[43] fell by €5.4 billion or 4.6% between 2002 and 2006 in the nine NATO-eurozone countries. Compared with 2002, the UK's defence budget was 7.4% higher in 2006. Italy's was 24% lower, Germany's 5.6% lower and Belgium's was 3.3% lower. As a percentage of GDP (constant prices), Portugal is the only European member of NATO to have increased its defence spending—from 1.5% in 2002, to 1.6% in 2006. The UK's dropped from 2.4% in 2002 to 2.3% to 2006, France's dropped from 2.5% to 2.4%, Germany's from 1.5% to 1.3%, while Italy's dropped from 2% in 2002 to 1.5% in 2006. [44]It appears that several member states see pooling of resources as a way to spend even less.

Do the UK Government's strategic objectives for European Defence match those of its partners?

On some occasions the Prime Minister has appeared to acknowledge that other member states do want to use European Defence as a way to disengage from NATO. However he argued that, "Well, if we don't get involved in European defence, it will happen without Britain. Then those people who really have an agenda to destroy NATO will have control of it." [45]

However in general the Government has attempted to stress that EU defence will be compatible with NATO, and has played down the threat that other member states might attempt to pursue much deeper defence integration in isolation from NATO. Mr Blair has stated that there is "no such concept called a European army" and argued that "You already have a European planning capacity. The issue is whether you set up a competitor capability in operations. But I don't think that people in Europe want to do that." [46]

However, Italian Prime Minister Romano Prodi has said that the EU should have "a common army from countries which accept a common army". Although he stressed that "you arrive to a common army only very late" in the development of European defence, he has said that he believes that it is "inevitable". He also argued that "If you don't want to call it a European army, fine. You can call it Margaret, you can call it Mary-Ann." [47]

French President Nicolas Sarkozy has said that "the strengthening of European defence must remain a priority. While Europe and its security are no longer necessarily at the centre of American strategic preoccupations, Europeans must now be more autonomous in the protection of their territories and their populations, the same as in the defence of their fundamental interests on the international scene. I therefore want European countries to be able to deepen their cooperation in this field, as long as they have the capacity and the willingness, without being prevented to do so by others."

He said this meant "an independent European defence." [48]

A planning document from the German Defence Ministry featured on the NATO website suggested that "A European army legitimised and financed through the European Parliament is the visionary goal... The European army should have joint structures that go beyond the ones already in place. Therefore there is a need for a joint defence system, common legislation and standardization." [49]

Spanish Prime Minister Jose Luis Rodriguez Zapatero has stated that "Europe must believe that it can be in 20 years the most important world power ... Naturally it [US military help] will still last some time, until we develop a single defence policy. That can happen only after the agreement on a common foreign policy. The constitutional treaty is an important step into this direction. In 15 to 20 years we will surely have a foreign service for the European Union." [50]

CONCLUSION: THE UK IS OVERSTRETCHED AND CANNOT AFFORD UNNECESSARY DUPLICATION AND DIVERSION OF EFFORT FROM THE WARS IT IS FIGHTING

At a time when NATO and UK forces are stretched to breaking point in arenas as challenging as Afghanistan and Iraq the UK Government must think carefully about the current direction of EU defence policy and the impact on its commitments within NATO.

The UK is timetabled to provide 1,500 troops to be on standby for an EU battlegroup from next year, despite its commitments in Afghanistan and Iraq.

Several EU member states, particularly France, clearly envisage the end-point of current initiatives as a European army under European control, using Europe-made assets and operating completely distinctly from NATO.

For this reason, the same member states are reluctant to cooperate with NATO to develop its own civilian capabilities to complement its traditional operations in ever more complex security environments. The recent agreement of an "integrated approach" in Afghanistan comes after clear problems coordinating the use of EU civilian assets with NATO operations there.

The danger is that European Defence becomes an excuse to stifle the sorts of new projects which will hold NATO together; that the two organisations will trip over each others' feet in conflicts; and that expensive and time-consuming duplication will continue. It is not clear that the development of European Defence since St Malo has produced any positive benefits for the UK.

EVIDENCE

1. Background

As the EU seeks to extend its reach further over national policies, with proposals for an EU Defence Procurement Directive, an EU space policy for the benefit of military users, a commitment to move towards a common EU defence, an EU Foreign Minister and an EU diplomatic service, we should take note of the fact that over the last 10 years the Government has broken promise after promise about the conditions in which an EU defence policy would operate.

It was only 10 years ago, for instance, that the Government was insisting that the idea to merge the WEU into the EU was not on the Government's cards. Tony Blair said in 1997, "Getting Europe's voice heard more clearly in the world will not be achieved through merging the European Union and the Western European Union or developing an unrealistic common defence policy." [51]At one point Robin Cook celebrated the fact that, "We stopped the merger of the Western European Union with the European Union and prevented the European Union from becoming a defence organisation".[52] Shortly afterwards it was fully subsumed.

Less than 15 years ago there was no EU foreign policy budget to speak of. By 2000, the EU was spending nearly €5 billion of its budget on foreign policy. This year the figure is €6.8 billion[53] and by 2013 it will be more than €8 billion. EU spending on defence falls into this category and it is very difficult to separate out what is spent specifically on defence.

There are now as many staff working on CFSP and ESDP in all the different EU bodies in Brussels and beyond as in the Foreign and Commonwealth Office.

The EU Constitution would have explicitly committed member states to move towards a common defence for the first time. Negotiations for a replacement for the Constitution are still underway, and although it is not yet clear whether the Constitution's defence provisions will be included in a new treaty, EU leaders are committed to moving forward in this area, treaty or no treaty. This is clear from the continuous attempt to further integrate national defence policies over the last few years, resulting in a large number of new initiatives, including the establishment of an EU planning cell, an EU military staff, and a European Defence Agency which aims to control European defence procurement.

The Government has long maintained that any EU defence capacity must not duplicate or undermine existing arrangements at NATO, but the evidence suggests this is not the case. In January 2000 Defence Minister Geoff Hoon said, "I have made it clear on several occasions on which the issues have been discussed in the House that there will not be any sort of duplication, nor any sort of conflict between proposals made within the European Union context and our obligations under NATO. For many years, NATO Ministers have endorsed that approach because they recognise that, by strengthening the European pillar of NATO, we strengthen NATO as a whole." [54]

Back in 1998, the US Secretary of State Madeleine Albright said the US could only support EU defence policies if there was: no duplication of NATO's resources; no decoupling from the US and NATO; and no discrimination against NATO's non-EU allies. But the EU is increasingly doing all three—to the detriment of the UK's relationship with the US and other non-EU partners.

2. Examples of duplication

Duplication of military hardware and procurement programmes. The UK Government has so far invested more than a quarter of a billon euros[55] in the EU's faltering satellite navigation programme, Galileo. Despite insistence from the UK Government that the project continues to be planned as a civilian system, the Commission has recently admitted that it will have military users. Industry and analysts are concerned about the added-value of the system—the consortium initially set up to build the system has refused to shoulder the financial risk, resulting in costs of €10 billion to be met by taxpayers through the EU budget and/or member state governments. The UK military currently uses the free GPS system, and the improved accuracy promised by Galileo is likely to be matched by a third generation GPS before Galileo is even off the ground. The UK's continued investment and involvement in the project is unjustified—especially given reports that the 140,000 jobs it was supposed to create in Europe may in fact be lost to partnering countries like China. [56]

Several EU countries have orders for the A400m military airlifter, which is seen as essential if the EU is to realise its military objectives. The first are due to be operational in 2010 but there are concerns about delays and cost overruns. The UK has ordered 25 at a cost of £2.4 billion. There are serious concerns about its added value compared with US equivalents such as the Boeing C17 and Lockheed Martin's C130. (Note that despite European lobbying for the A400M, Canada decided to buy C-17 earlier this year). Compared with the C-17 it will require a lower minimum runway length for both takeoff and landing, but there are payload and range issues with it, plus the C-17s have up to twice the capacity, bigger cargo doors, bigger cargo hold length etc.

The European Defence Agency has a €500,000 budget for an initial study into joint development of security oriented and commercial Unmanned Air Vehicles (UAVs), which was launched on 14 May 2007. [57]There are also plans to pool efforts and resources to coordinate member states' Armoured Fighting Vehicles resources within the EDA framework. [58]

Duplication of facilities and planning structures. The EU now has its own military structures, including its own group of command bodies. It already has the facility to operate autonomous military operations—independently of NATO—using the various operational headquarters at its disposal, and by the end of this month (June 2007) will also be able to make use of a single operational military planning centre which is set to open within the EU Military Staff. The so-called EU Operations Centre will staff 76 military and 13 civilian planners, and is intended to enable the EU to plan and run autonomous military and joint civilian-military operations in the absence of a leading national headquarters. NATO and the US have protested against the centre, saying it would duplicate the alliance's well-established military planning staff. Reporting this, Defense News cited "a diplomat from a small EU country" saying "This is a pretty clear indication of where the EU is headed... The constitution may be frozen, but we all see where this big EU wheel is going. It's turning slowly, but it's turning down the path [of a stronger] European Security and Defence Policy." [59]

In 2005, more UK troops were deployed on EU operations than NATO ones. [60]

The EU is now looking to increase the size of the Military Staff—currently at 200—or its technical capabilities. Foreign Policy Chief Javier Solana is expected to come back to ministers with recommendations this November. [61]

All this despite the UK insisting it would never happen. In 2001 Geoff Hoon said, "Operational planning is a matter that will be the responsibility of NATO." [62]Keith Vaz promised, "The EU military staff will not do operational level planning, nor will it provide command and control structures." [63]Robin Cook insisted, "There is no central integrated command." [64]By 2003 Belgian Prime Minister Guy Verhofstadt was gushing, "I compare this cell for the planning and conduct of common military operations to the European Central Bank. Twenty years ago, we started off with a Monetary Institute, with a degree of ambition which was lower even than that of the military cell. It has grown into the ECB we all know".[65]

The Government has always insisted there is "no such concept called a European army." [66]But the debate on the EU Constitution revealed that many European leaders are intent on pursuing one. Last year Kurt Beck, leader of the German Social Democrats called for a European army with a single command. [67]Angela Merkel also said recently: "In the European Union we have to come closer to the creation of a European army." [68]Former French foreign minister Michel Barnier has said, "We need to begin with the European defence policy—which has to finally lead, in reality, to a common defence. That will take place through the plans specified in the European Constitution: The developing European arms agency, the solidarity and mutual defence clauses, the armed force for the protection of Europe, and the European general staff." [69]

European troops operating under European control now have all the symbols of an EU force. In 2000, Geoff Hoon insisted there should be "No European cap badges, no European flags." [70]By the time of the EU's first independent military operation in 2003 the FT was reporting, "The EU's blue flag and 12 golden stars will for the first time decorate the lapels of the troops." [71]

The Dutch have recently signed an agreement with Germany, France and Belgium to create a "European Air Transport Command" as a coordination pool for their own military transports, which, notes Defense Industry Daily, "furthers the objective of creating a parallel EU military structure outside of NATO." [72]

Duplication of initiatives and projects. The EU Battlegroups concept, which reached "Full Operational Capability" on 1 January 2007, rivals the existing NATO Response Force initiative and duplicates efforts in several ways. As outlined in a recent paper by the Institute for Security Studies, while the groups may differ in size, composition and training processes, they are very similar, and therefore overlapping, in many ways: both are expected to deploy at very short notice; both will be targeted to a range of missions, including higher and lower intensity; both serve as conduits for force transformation and modernisation; and they will both rely on a similar pool of personnel. [73]There are also several challenges facing NATO Response Force-Battlegroup relations—notably the potential problem of "double-hatting", and questions over how the NRF and BG missions would relieve each other. [74](Another big challenge will be the lack of strategic airlift for the battlegroups—they hope to rely on A400Ms but it will be 2012 before these are being churned out at a rate of 30 per year. In the meantime Europe only has 4 C-17s to draw on.) [75]

The Battlegroups idea was originally mooted as a "European Rapid Reaction Force", which Tony Blair said would operate only "in respect of peacekeeping and humanitarian missions." [76]Five years later, when asked to respond to a claim by Javier Solana that the EU's battlegroups would never go to war, NATO's General Secretary Jaap de Hoop Scheffer said, "I don't believe that to be true. Why do you think the EU is creating battlegroups? It's not just so that they can reconstruct a country. The battlegroups are not going to rebuild schools." [77]

EU governments are spending millions creating the infrastructure in Brussels, funding, for example, the salaries of 180 officers based there, but despite now having reached "Full Operational Capability"—ie two battlegroups are on standby and capable of carrying out simultaneous missions—it is doubtful what they can actually do: the head of the EU Military Staff, Gen Henri Bentegeat admitted very recently that the EU battlegroups would struggle to intervene anywhere militarily in the near future. [78]Back in 2004, Tony Blair promised that rapid reaction battlegroups could be used in Africa, but so far there has been no deployment there and Blair has recently called on the EU to provide £25 million to fund an African rapid reaction force to do the job itself. [79]

The UK is timetabled to provide 1,500 troops to be on standby for an EU battlegroup from next year, despite its commitments in Afghanistan and Iraq.

The EU is also considering a "rapid response air initiative". This initiative aims at enhancing the generation of air rapid response elements and proposes a draft concept for a European deployable air station. [80]

NATO and the EU are also carrying out competing missions. As Judy Dempsey writing in the IHT has pointed out: "Each helped separately to empty an arms dump in Georgia last year; they raced against each other to provide separate airlifts to the Africa Union in Sudan, and even in Afghanistan, where the EU has spent billions of euros on development aid, there is little coordination." [81]

She also points out that NATO and the EU are also competing for the same funds—"the EU has no military budget per se, but rather relies on its 25 member states for funding. When it fields a mission, participating countries carry the costs. A similar situation prevails in NATO, which has 26 members. Costs lie where they fall. If Belgium supports a NATO mission in Afghanistan, for example, or an EU mission in Bosnia, it must pay for the soldiers and the helicopters. What this means is that the amount European countries collectively spend on defence has to be divvied up between the EU and NATO."

Duplication is likely to get worse with the creation of the European Defence Agency in 2005, which was set up in spite of the no votes. Its attempts to create more EU coordination outside NATO are likely to lead to more expensive duplication (see below). The EDA has set up a €50 million defence research and technology budget, to allow common European defence projects to go ahead.

Dr Sarah Beaver, Director General of international Security policy at the Ministry of Defence admitted to the Lords EU Committee, "It would be wrong to say that there is no duplication between the agency and work that is done in NATO, but it will have a different focus".[82]

The EDA has a budget of around €22 million a year. However Francois Lureau, head of France's procurement agency, has said he "would like to see the EDA get 200 million euros [annually] by at least 2010." The UK pays 17.57% of the European Defence Agency's budget. [83]

The French recently attacked Britain for a "lack of commitment" to the EDA, because of its decision not to participate in a €54 million research project to develop force protection technologies, which, according to Des Browne "represents a very high degree of duplication with our national programme". They were also unhappy with the failure to agree a three-year budget for the EDA at the end of last year, over disagreements about how big it should be.

3. Examples of Decoupling

Through duplication of military structures with its own group of command bodies, the EU has also decoupled itself from the US and NATO, as well as decoupling from US technology. French enthusiasm for a clear separation between NATO and the EU is evident: as then-Defence Minister Mich€le Alliot-Marie said in 2005, "We need to go up a gear and show that Europe can be a first-rate military actor... acting autonomously." [84]

In practical terms we are now starting to see exactly the sorts of NATO-EU rivalry problems which sceptics warned about several years ago. For example, at the NATO ministerial at the end of April 2006, the NATO/US speakers wanted Germany to commit resources to training African Union peacekeepers in Darfur, but Germany said it was unable to because it was taking a lead role in the EU mission to the Congo. While at the moment tensions are still manageable, having two separate structures is likely to mean that over the longer term there will be more and more occasions on which NATO and the EU pull countries in different directions, leading to rivalry and confusion.

NATO Secretary General Jaap de Hoop Scheffer said in January this year that "There are some who deliberately wish to keep NATO and the Union separate from one another. For the proponents of this attitude, a strengthening of relations between the two would give excessive influence to the United States." [85]

During his presidency campaign Nicolas Sarkozy talked about maintaining NATO's "clear geopolitical anchorage in Europe and its strictly military vocation" during a speech on defence. [86]

In a recent article in Le Monde Leo Michel from the Institute for National Strategic Studies in Washington noted that only 1% of military personnel at NATO are French, suggesting this was indicative of the country's attitude towards the alliance. [87]

The Government has always maintained that EU intervention in traditionally NATO spheres will always be based on NATO's right of first refusal. In 2000 Tony Blair insisted "It is only [for] when NATO decides as a whole that it does not wish to be engaged." [88]The French, however, do not seem to recognise this: General Jean-Pierre Kelche, then France's Chief of Defence Staff, said in 2001, "There is no question of a right of first refusal. If the EU works properly, it will start working on crises at a very early stage, well before the situation escalates. NATO has nothing to do with this." [89]In 2003 an unnamed UK Government official admitted, "The French won't concede that NATO has the right of first refusal." [90]

French-led EU opposition has blocked NATO from doing work on terrorism which rivals the EU's own anti-terrorism policies. Last year Le Figaro reported that NATO's Secretary General Jaap de Hoop Scheffer had recommended an informal discussion on terrorism as part of a meeting on Bosnia. But the French delegation opposed it, arguing that terrorism was not on the list of official discussion themes between NATO and the EU. An unnamed French diplomat was quoted saying, "We don't want NATO taking care of everything and imposing its agenda on the EU." [91]In fact this represents an attempt to duplicate NATO work and then try to rule certain subjects "out of bounds" for NATO. This is particularly exasperating given that the EU's anti terrorism "strategy" involves such things as drawing up "a non-emotive lexicon for discussing the issues."

Analysts report that NATO wants to develop civilian capabilities to enhance its traditional military role. It considered whether the EU could provide it with police and other civilian personnel in a "reversed Berlin Plus" arrangement, but the EU said this was unacceptable. [92]

The French opposed NATO efforts to increase its civilian role in Afghanistan in December 2005, as well as the idea to merge NATO's Isaf force with the anti-terrorist operation Enduring Freedom, because it did not want to see confusion between war missions and stabilisation. [93](This was vetoed by France, Germany and Spain).

There is arguably a need for NATO to develop its civilian capabilities—especially given that in Afghanistan, NATO has repeatedly asked the EU for more civilian and humanitarian assistance, but the Commission has refused, largely because of opposition from some member states, including Belgium, France, Greece and Spain. [94]

When Germany agreed to command the EU's mission to the Democratic Republic of the Congo, Angela Merkel wanted to use NATO's planning headquarters, SHAPE, based in Mons, Belgium, but Jacques Chirac insisted that the EU command the mission—alone, and from Potsdam, just south of Berlin, where the EU has a military operations headquarters. [95]

In terms of procurement, there is much evidence of the UK decoupling from US technology—at increased cost to the taxpayer. In a speech to parliament recently Ann Winterton MP gave several examples of where the MoD has wasted money buying European instead of US technology, arguing the waste amounted to £8.8 billion "for no gain whatsoever".[96]

4. Examples of Discrimination

The idea of discrimination first set out by Albright was particularly focussed on discrimination in decision making against non-EU NATO members like Turkey. But as things have turned out, some of the most important problems with discrimination that have emerged relate to discrimination against non-EU armaments suppliers.

When the EDA was first suggested in 2002, the UK Government tried to head off the idea, producing a counter-proposal for a "capability agency" which would have focussed purely on encouraging member states to increase their capabilities and providing value for money audits of member states' spending.

In December 2002 under the headline "UK set to spurn plan for EU defence procurement", the FT reported that the UK would block EU powers over procurement, because it was worried that it would lead to protectionism and make it harder to work with the US. A senior British defence official was quoted saying, "We need to focus on outputs, not inputs ... Yes, we want to maximise the amount of euros spent, but also to see every euro spent wisely." The official added: "The capability agency wouldn't compromise British procurement policy. We want the defence industry strengthened and more competitive, but not at the price of cutting off from the US." [97]

Last year the EDA launched a European Code of Conduct on defence procurement, which stops participating member states from exempting defence procurement contracts (which fall under Article 296 TEC) from cross-border competition, with the exception of defence research, chemical, bacteriological and radiological goods and services, nuclear weapons and nuclear propulsion systems and cryptographic equipment. Member states may also choose not to apply the Code in cases of pressing operational urgency, for follow-on work or supplementary goods and services and for extraordinary and compelling reasons of national security. However member states must provide explanations and data on these contracts to the EDA. [98]

The idea is to encourage the creation of an internationally competitive European Defence Equipment Market (EDEM). [99]Under the terms of the arrangement, the participating nations agreed to post details of proposed acquisitions for projects in excess of €1 million (excluding VAT) onto an electronic bulletin board (EBB), thus opening them up to pan-European bidding, with the hope that it would lead to more transparency, cross-border bidding, and opportunities for SMEs to win contracts. The hope is that eventually the majority of Europe's €30+ billion procurement programmes will be posted on the web site. [100]

However, so far, the Code of Conduct and the EBB haven't had much success. The EBB was launched on 1 July 2006, and in March 2007 the EDA published a progress report, which found that by 14 March, 14 of the 22 participating member states had published more than 130 contract opportunities (five from the UK) with a total volume "cautiously estimated" at over €6.5 billion. However, it noted that "The impact of the CoC on increased cross-border award of contracts cannot yet be properly assessed since the Agency has so far been notified through the EBB of only four competitive contracts awarded (3% of the total advertised)." [101]

As of 24 May, that figure had risen to 10% of the total advertised: out of a total of 178 contract opportunities published, 18 contracts were awarded. However, only two of these went to foreign companies, including one UK contract (for supply of small arms ammunition), which went to a Brazilian and a Swiss company, neither of which were 2SMEs". 13 contracts were awarded to Polish companies by the Polish government, two were awarded to Finnish companies by the Finnish government, and one was awarded to a Lithuanian company, by the Lithuanian government. [102]

Despite this ambiguous record of success, the European Commission is now looking to further extend EU control over defence procurement with a Directive on Defence Procurement, for the harmonisation of national defence procurement rules (covering the procurement of defence equipment which does not fall under the derogation of Article 296, and therefore be complementary to the Code of Conduct), [103]as well as a draft Regulation on intra-Community transfers. These are expected to be ready in autumn. [104]

The logic behind the proposal for a directive is that unlike in other areas of the single market, such as transport, there is no specific directive coordinating national procurement rules in the defence sector. Defence procurement is covered by the EC Public Procurement Regulations (specifically Procurement Directive 2004/EC) unless exempted by Article 296 TEC. [105]

However in 2005 the Minister for the Armed Forces Adam Ingram said "we do not believe that the benefits that might result from introducing a specific defence procurement directive are sufficient to offset the drawbacks. In particular, an additional regulatory burden on top of those already in place is unlikely to support our aim of making defence markets more effective and efficient. We do not, therefore, support the development of a new directive at this time." [106]

In a response to a Commission Green Paper on defence procurement in early 2005, the UK Government wrote that "we have less appetite for a new directive covering defence procurement, even one that does not cover those items exempted by Article 296 TEC ... While we understand the potential benefits of new regulation outside of Article 296 TEC, not least that it might develop specific and perhaps more flexible rules, we perceive that the drawbacks would more than offset this. In particular, the creation of a new directive might mean that Member States' defence procurement organisations would have to have a detailed knowledge of at least three separate procurement processes and make assessments, on each occasion, as to which processes to apply. We do not believe that this supports our aim to make defence markets ever more efficient and effective. Additionally, a new directive would inevitably require the negotiation of and agreement to an additional boundary between those goods falling under the scope of the more general public rules and the new directive. This, and the attendant need to develop the scope of the directive between the member states, is unlikely to be achieved quickly. Accordingly, the UK does not favour the development of a new directive at this stage." [107]

The House of Commons European Scrutiny Committee has recently questioned the UK Government's failure to press the European Commission on the need for this directive, and also noted a shift in the Government's position from two years ago, "from being not supporting the development of a new Directive, to seeking to identify what benefits to defence procurement might be derived from one." They noted that this could be interpreted that, "with the Commission intent on pursuing this matter, he had concluded that damage limitation was the right approach; and that though he said that UK involvement was without commitment to supporting the adoption of a Directive, it seemed to us unlikely that, once produced, it would not in due course become law." [108]The Committee also asked the Minister for its assessment of the success so far of the Code of Conduct, but he said it was too early to tell.

EU Defence Ministers also recently committed to pool defence resources by adopting a strategy document with the aim of developing a "European defence technological and industrial base", which, they said, "cannot be just the sum of the national parts, but an increasingly integrated, specialised and interdependent entity". Agreeing on the need to break down national barriers in the EU arms market, open up cross-border investment and reduce Europe's reliance on US military imports, a strategy paper said, "We cannot continue routinely to determine our equipment requirements on separate national bases, develop them through separate research and development efforts, and realize them through separate national procurements. This approach is no longer economically sustainable." The document called for "less European dependence on non-European sources for key defence technologies." [109]

While the idea of strengthening Europe's technological and industrial base to keep Europe competitive seems a laudable one, these moves threaten to make procurement cooperation with other NATO allies more difficult, and could lead to greater protectionism in the defence sector, further polarising EU-US relations in particular. Efforts to open up the EU's defence procurement market are intended to create pressure to "buy European". Coordinating spending on research and technology—supposedly so we can get "more bang for our buck"—may be a good idea, but why not do it within NATO, to create a bigger market which includes all our allies? Or, alternatively, the UK could pursue bilateral procurement projects, without going through the increasingly integrated EDA, where QMV is the rule.

According to Space News the French have raised the possibility of sanctioning governments that do not buy "European" in the space sector. This comes as the EU has launched an EU Space Policy which aims to explicitly link space initiatives like Galileo and the GMES to the European Security Defence Policy for the first time.

Last year Poland came under pressure from the French to "buy European" in a decision on issuing contracts for military helicopters. Le Monde noted that Poland faced "fierce criticism" from France just before its accession to the EU in 2004 when it signed a contract with Lockheed Martin for 48 F-16 combat aircraft. [110]

Non-EU countries may sign agreements with the EDA with a view to joining initiatives, (as Norway has), but this can only happen with the unanimous agreement of the Council. That's discriminatory, because on most other issues, decision-making is by QMV, as its former head Nick Witney explained: "so it will not be possible for one member state to say, `We are not happy with this ... it does not seem to be optimised to suit our national interests, so we are going to block it."

Discrimination and weakened transatlantic ties will damage the UK even more than other member states. However Britain has suffered a loss of access to key US technologies because of its EU-first approach to defence. Last year the US turned down the UK Government request to grant it a waiver from US International Traffic in Arms Regulations (ITAR), citing fears that technology and secrets will be "leaked" from the UK to other European countries, and then on to third parties.

5. Is ESDP working?

Back in 2004 at the Military Capabilities Commitment Conference[111] EU member states committed themselves to real increases in defence capability. One of the EU leaders' key objectives is to improve military capabilities—"spend more, spend better and spend more together on Defence R&T".[112] Indeed the Government has always maintained that part of the reason for pursuing an autonomous EU defence policy was that this would boost European defence capabilities. In 2002 Geoff Hoon said, "This is about ensuring that Europe makes better and more effective use of its resources. It is about co-operating to deliver increased defence capabilities. It is not about Europe competing with the United States. That is why we have been so insistent about avoiding the duplication of capabilities, through ensuring that the European Union has access to military assets—such as operational planning and command and control—that NATO can already offer." [113]

For the EU battlegroups, the Headline Goal 2010 drawn up in 2004 said the aim was to be able to identify strategic lift, sustainability and debarkation assets by 2007. [114]But Europe is still lacking capabilities.

As well as identifying objectives for member states and promoting more harmonisation and more joint projects within the EU, the EDA is also explicitly intended to encourage member states to spend more on defence. The Foreign Office Guide to the EU argues that "This should help encourage other European countries to spend more on defence." [115]Dr Sarah Beaver, Director General of international Security policy at the Ministry of Defence has said, "The head of the agency has to be in a position where he could cajole or bully, if you like, member states to improve their contribution." [116]

But recent patterns suggest most EU member states have no intention of increasing their defence spending, despite signing declarations about the need to increase EU capabilities. In a speech on 13 November 2006 Nick Witney admitted that over the last year the "Hampton Court-inspired efforts to progress Air-to-Air Refuelling and Strategic Lift made no real progress, in the absence of any sign of Member States' preparedness to find ways to fund the significant investments that these capabilities will require."

NATO figures show that defence spending[117] fell by €5.4 billion or 4.6% between 2002 and 2006 in the nine NATO-eurozone countries. Compared with 2002, the UK's defence budget was 7.4% higher in 2006. Italy's was 24% lower, Germany's 5.6% lower and Belgium's was 3.3% lower. As a percentage of GDP (constant prices), Portugal is the only European member of NATO to have increased its defence spending—from 1.5% in 2002, to 1.6% in 2006. The UK's dropped from 2.4% in 2002 to 2.3% to 2006, France's dropped from 2.5% to 2.4%, Germany's from 1.5% to 1.3%, while Italy's dropped from 2% in 2002 to 1.5% in 2006. [118]

9 June 2007