10 European Defence Agency activity in
2008 and 2009
| (a)
(30175)
—
(b)
(30176)
15442/08
—
(c)
(30212)
—
|
Head of the European Defence Agency's Report to the Council
Council Guidelines for the work of the Agency in 2009
European Defence Agency 2009 Budget and Three Year Financial Framework
|
| Legal base | — |
| Deposited in Parliament | (a) 20 November 2008
(b) 21 November 2008
(c) —
|
| Department | Defence |
| Basis of consideration | EMs of 26 November 2008
|
| Previous Committee Report | None; but see (28212) and (29268) HC16-xi (2007-08), chapter 1 and (29341-3) HC16-xi (2007-08), chapter 2 (6 February 2008); and (29701) HC-xxv (2007-08), chapter 15 (25 June 2008)
|
| Discussed in Council | 10 November 2008 General Affairs and External Relations Council
|
| Committee's assessment | Politically important
|
| Committee's decision | Not cleared
|
Background
10.1 The European Defence Agency was established under 2004/551/CFSP
on 12 July 2004, "to support the Member States and the Council
in their effort to improve European defence capabilities in the
field of crisis management and to sustain the European Security
and Defence Policy as it stands now and develops in the future".
FUNCTIONS AND TASKS
10.2 It has four functions, covering:
— developing
defence capabilities;
— promoting Defence Research and Technology
(R&T);
— promoting armaments co-operation;
— creating a competitive European Defence
Equipment Market and strengthening the European Defence, Technological
and Industrial Base.
10.3 According to its website, these functions all
relate to improving Europe's defence performance, by promoting
coherence: "a more integrated approach to capability development
will contribute to better-defined future requirements on which
collaborations — in armaments or R&T or the operational
domain — can be built. More collaboration will, in turn,
provide opportunities for industrial restructuring and progress
towards the continental-scale demand and market, which industry
needs."
10.4 On this basis, the Agency's tasks include:
— to
work for a more comprehensive and systematic approach to defining
and meeting the capability needs of the European Security and
Defence Policy (ESDP);
— to promote European defence-relevant
R&T, as vital both to a healthy defence technological and
industrial base and to defining and satisfying future capability
requirements. This will involve pursuing collaborative use of
national defence R&T funds, in the context of a European Defence
R&T Strategy which identifies priorities;
— to promote European cooperation on defence
equipment, both to contribute to defence capabilities and as a
catalyst for further restructuring the European defence industry;
and
— to work, in close cooperation with the
Commission, on steps towards an internationally competitive market
for defence equipment in Europe.
10.5 The EDA says that its "comparative advantage"
should be "its ability to comprehend all these agendas, and
relate them so as to realise their synergies. Its special position
should allow it to develop uniquely cogent analyses and proposals
across the range of its activities."
STRUCTURE
10.6 The EDA is an Agency of the European Union.
The EU High Representative, Javier Solana, is Head of the Agency
and Chairman of the Steering Board, its decision-making body,
which is composed of Defence Ministers of the 26 participating
Member States (all EU Member States, except Denmark) and the European
Commission. In addition, the Steering Board meets regularly at
sub-ministerial levels, such as National Armaments Directors or
Capability Directors.
10.7 The Steering Board acts under the Council's
Authority and within the framework of guidelines issued by the
Council, and meets twice yearly — in May and November.
WAY OF WORKING
10.8 The EDA's website explains:
"the Agency faces outwards. Its main "shareholders"
are the Member States participating in the Agency; key stakeholders
include the Council and the Commission as well as third parties
such as OCCAR (fr. Organisation Conjointe de Coopération
en matière d'ARmement), LoI (Letter of Intent) and NATO.
The Agency has a special relationship with Norway (through an
"Administrative Arrangement")."[39]
10.9 The Committee and its predecessor were fully
engaged in the development of the EDA, culminating in a debate
in June 2004 in European Scrutiny Committee B.[40]
There, the then Secretary of State stated that its principal purpose
would be to improve Member States' military capabilities. Unanimity
is required for decisions on role, goals and targets; QMV for
internal operations. It came into being in 2005.
10.10 The Government agreed 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.
Also, initiated by the then Secretary of State (Dr John Reid),
the Secretary of State writes before and after EDA Steering Board
meetings (not only to this Committee but also to the Defence Select
Committee). We have thus been kept well-informed of developments
during the EDA's formative years.
10.11 At our meeting on 6 February 2008, we considered
the report of November 2007 on that year's activity and the following
years' budgets and the Council's guidelines to the Agency that
set the framework for its 2008 work programme, along with a Joint
Action that embodied the outcome of the first review required
by the original Joint Action (carried out by the Head, 3 years
after adoption of the Joint Action; proposing no major changes
and amendment to authorise two Deputy Chief Executives instead
of one — one
strategic, one operational; agreed in principle by the steering
board, and in the 2008 budget — and a further review in
2010).
10.12 We also considered a Commission Communication
(and related draft legislation) on defence procurement, which
we recommended for debate in European Committee B. With the EDA
entering the next stage of its development, and clear indications
that, particularly during the French presidency of the European
Union in the second half of this year, the future of European
Security and Defence Policy would be put under the microscope,
we also recommended that the Head of the Agency's Report and the
guidelines for 2008 be debated at the same time, to enable the
House to consider the wider framework, and how the EDA might best
contribute.[41] That
debate took place on 10 March 2008.[42]
10.13 Our most recent Report dealt, first, with information
provided by the then Secretary of State for Defence (Mr Des Browne)
prior to the 26 May EDA Steering Board meeting about the topics
that it would discuss:
— the
launch of a second Joint Investment Programme on research into
innovative concepts and emerging technologies (the UK had already
indicated that would not participate on this occasion);
— a proposal to postpone the setting of
the EDA three year financial framework for one year. The then
Secretary of State recalled that the Council had failed three
times to reach agreement on the level of growth in the financial
framework. As the Agency had not changed their approach, he judged
that the Board would again not find consensus. The proposal, which
he fully supported, represented "a pragmatic way forward,
allowing Member States to take a decision on the 2009 budget in
November"; officials would be working with the Agency "to
suggest ways of changing their approach to facilitate a more productive
discussion on the three year framework in future years";
— updates on European Defence Research
& Technology strategy, the European Defence Technological
and Industrial Base strategy and the code of conduct on
defence procurement, which the then Secretary of State welcomed;
— Norway's participation in the code
of conduct on defence procurement, which the then Secretary
of State also welcomed;
— helicopter availability, about
which the then Secretary of State said that he had long been concerned;
and
— a proposal to set up a cell to look at
the procurement of commercial satellite communications;
it being not yet clear to the then Secretary of State that a procurement
cell was the best solution, he supported further work on this
project to investigate whether it could achieve better value for
money for the UK.
10.14 That Report also considered a report by the
Head of the Agency describing its key ongoing activities and progress
made on its major initiatives, including the implementation of
the long term strategies and details of specific projects (the
Agency's work on helicopter availability, Unmanned Aerial Vehicles
(UAVs) and a Joint Investment Programme on Force Protection).
They were commented upon fully by the then Secretary of State
for Defence, who noted that no new policy implications arose from
this report, and that the UK would "continue to engage positively
with the EDA to ensure that it is an effective tool in helping
to improve military capability in Europe."
10.15 For our part, we said that, so far, with significant
UK involvement, the EDA appeared to be sticking to its brief;
we also recalled that when we had considered the previous Report,
we noted that the Government had worked hard to try to ensure
that the Agency learned first to walk, though impulses to run
faster were still apparent, which applied in particular to some
other Member States' budgetary ambitions, and looked forward to
hearing more in due course on the outcome of the discussions to
which the then Secretary of State referred in his 19 May letter.[43]
The Head of the Agency's Report on key activities
in 2008
10.16 As before, the report highlights progress made
on the Agency's major initiatives, provides details on the implementation
of existing policies and developing policy/conceptual work and
provides information on specific projects such as the Joint
Investment Programme on Innovative Concept and Emerging Technology
and the Agency's work on increasing helicopter availability
for ESDP Operations.
The Government's view
10.17 The
Minister for International Defence and Security
(Baroness Ann Taylor)
begins her first Explanatory
Memorandum of 26 November 2008 (and the two others considered
below) with the same
general remarks as did the then Secretary of State (10.14 above).
She then comments as follows on each of the main parts of the
Report:
"Capability Development Plan (CDP)
"The CDP is designed to allow the EDA to set
a long term vision for European defence capability and capacity
needs, thereby informing nearer-term decisions on industrial,
technological and investment issues. In July 2008 the EDA's Steering
Board endorsed the initial Capability Development Plan (CDP) as
a living process to identify priorities for European capability
development and to bring out opportunities to pool and cooperate.
Member States selected a first tranche of twelve priority Actions[44]
and directed the EDA to prepare a detailed way forward for each
of them in view of generating concrete collaborative initiatives.
Work is in hand to develop a process to derive further actions
from the CDP and present them to the Steering Board at the beginning
of next year. The UK supports the work of the Agency on the CDP
and has been actively involved throughout this year. We will continue
to engage with the Agency on this key strategy as it is used to
prioritise the work programme over the coming years.
"European Defence Technological & Industrial
Base Strategy
"The EDTIB Strategy adopted in 2007 sets out
important policy objectives and enablers to consolidate demand,
increase investment and competition and thereby better ensure
security of supply in the European Technological Industrial base.
Through the work strands that are underway, Member States have
identified Future Air Systems as a priority sector for consideration.
Member States are currently considering their requirements in
this area with a view to reporting back to EDA next year. EDA
propose to undertake analysis of these responses in order to identify
commonality with a view to reporting possible actions for consideration
in late 2009. Furthermore in support of this work Member States
have agreed a voluntary Code of Conduct on Offsets which enters
into force on 1 July 2009. The Code is aimed at mitigating the
adverse impact of Offsets on cross border competition and the
European DTIB. EDA has also embarked on work to identify and agree
a number of specific measures to support and encourage defence
related Small and Medium-Sized Enterprises and non-traditional
suppliers. The UK continues to support and engage on EDA's EDTIB
work strand.
"European Armaments Cooperation Strategy
"The European Armaments Cooperation Strategy
aims to facilitate better multinational cooperation between Member
States by the development of common requirements. In October 2008
the Steering Board endorsed the "European Armaments Cooperation
Strategy" to promote and enhance more effective European
Armaments Cooperation in support of ESDP through generating, promoting
and facilitating cooperative programmes. The UK supports this
strategy and will be working with the Agency throughout 2009 on
the practicalities of implementing this strategy.
"European Defence Research and Technology
"The European Defence Research and Technology
Strategy is aimed at enhancing more effective research collaboration
in science, technology and demonstrators in order to deliver in
time the right technologies in support of military capabilities
for short, medium and long term need. This strategy was adopted
at the EDA Steering Board on 10 November.
"Code of Conduct on defence procurement
"The Agency has reported a positive assessment
of the implementation of the Code of Conduct on defence procurement
and an observation that subscribing Member States have adapted
their procurement practices to the CoC's provisions. There is
however a need to increase cross-border bidding by industry. To
facilitate this improvement EDA has undertaken to promote with
Industry the portal for advertising Industrial sub contracts.
"EU-wide forum for Military Airworthiness
Authorities
"The Member States agreed to the creation of
an EU-wide forum for Military Airworthiness Authorities with an
associated Roadmap for its creation. The aim of is to get "a
joined" up approach in respect of common Airworthiness regulations,
processes and procedures such that for future collaborative programmes
there will be a much reduced cost and time to undertake development,
certification and preservation of airworthiness than has been
the case up to now. In support Industry would like to work to
one set of European "rules" thus reducing the burden
on them when trying to satisfy multiple AW Authorities' different
requirements. This is a UK inspired EDA project in which we will
continue to take a leading role.
"Joint Investment Programmes
"The Agency has continued work on the first
Joint Investment Programme on Force Protection and has established
a second Joint Investment Programme on Innovative Concepts and
Emerging Technologies (ICET). The UK decided not to participate
in the first Joint Investment Programme due to duplication with
ongoing national work. We have decided not to participate in the
second Joint Investment Programme on ICET as experts don't judge
this subject a priority for UK defence research funding.
"Helicopter Availability
"The Agency has established a Project Group
on Helicopter training in order to develop and implement the concept
of a Helicopter Tactics Training Programme (HTP) to enhance aircrew
skills. This should help support deployment of helicopter crews
on current operations. The EDA is also pursuing a work strand
on helicopter upgrades, collating experiences from Member States
and Industry over current equipment upgrades and shortfalls; a
detailed report will be provided by spring 2009. The UK strongly
supports this initiative; this is a product of the UK French summit
held earlier in the year.
"European Air Transport Fleet
"This project aims to increase the availability
of strategic airlift available in Europe by creating a fleet of
strategic transport aircraft (A400M). The idea is for Member States
with small number of A400M to pool together to create a transport
fleet sharing basing and other common costs. The initiative also
aims to get other Member States without strategic lift to club
together to collectively buy or lease additional A400M. A declaration
of Intent was signed by a number of interested Member States at
the EDA Steering Board on 10 November, indicating their intention
to participate in the establishment of a future European Air Transport
Fleet in order to increase the EU's strategic transportation capabilities.
The UK supports this initiative to increase the amount of available
airlift in Europe, however we have decided not to participate
in the initiative.
"Maritime Area
"The Agency has established two ad hoc collaborative
projects in the Maritime areas: one to consider the assessment
phase of a "Maritime Mine Counter Measures" (MMCM) system,
the other one on "Maritime Tactical Unmanned Aerial Systems".
In the preparation for the EDA Steering Board the Maritime Tactical
Unmanned Aerial Systems project was renamed Future Unmanned Aerial
Systems in order to encapsulate land requirements and broaden
the scope of the project. The UK has decided that we will not
participate in either of the projects in this area. We will keep
the work under review and look to participate if the projects
meet the UK capability requirements in the future.
"Multinational Space-based Imaging System
(MUSIS)
"Six Member States have announced their intention
to bring into EDA their cooperation on a Multinational Space-based
Imaging System (MUSIS) for surveillance, reconnaissance and observation.
The UK is not involved in the MUSIS project as it relates to Member
States who have current space based imaging systems that will
need replacement. We will keep this project under review as it
develops.
"Other Programmes Mentioned
"The UK participates in many of the EDA's programmes
to varying degrees, ranging from maintaining a watching brief
of progress to active participation where the projects align with
our own UK objectives."
10.18 Finally, the Minister notes that the Head of
the Agency delivered this report to the Council on 10 November
2008 and will submit his next report to the council in May 2009.
Council guidelines for the European Defence Agency's
work in 2009
10.19 The Minister's second Explanatory Memorandum
of 26 November 2008 examines the Guidelines for the EDA's work
in 2009 which were adopted by the Council, "in Minister of
Defence composition", on 10 November 2008. Those guidelines,
in which the Council "welcome the important results achieved
by the European Defence Agency (the Agency) in 2008, as presented,
particularly with regard to its 2007 guidelines", concentrate
on the EDA's strategic framework — the Capability Development
Plan — and the three endorsed strategies —
the European Defence Technological Industrial Base Strategy, the
European Defence R&T strategy and the Armaments strategy.
The Government's view
10.20 The Minister comments upon the Guidelines as
follows:
"Capability Development Plan
"The Council recognised the Capability Development
Plan (CDP) as the strategic tool for military capability development
that will give direction to the Agencies work programme for 2009.
It agreed the Agency should focus on taking forward the 12 priority
Actions[45] to deliver
capability orientated programmes based on common military requirements.
The UK supports the further development of the initial 12 priority
actions as a way of prioritising the work programme for 2009 and
beyond. We support the Agency using the CDP as a basis for a three
year work programme that connects capability priority and resources.
"European Defence Research & Technology
(EDRT) Strategy
"The Council agreed that the Agency should focus
on consolidating R&T efforts in Europe by implementing the
two Joint Investment Programmes, stimulating the launch of further
Category B projects[46]
and exploring possible links between the Capability Development
Plan priority actions and the potential R&T priorities identified
in the EDRT Strategy. The UK supports this work and will engage
proactively with the Agency as we did in the development of the
R&T strategy.
"Defence Technological & Industrial Base
Strategy
"The Council guides the Agency to strengthen
the European Defence Technological & Industrial Base by increasing
transparency and competition in the market place through implementing
a new Code of Conduct on Offsets and increasing the role of Small
to Medium sized Enterprises (SME). They also recognise the importance
of investigating the industrial capabilities that will need to
be maintained in Europe, firstly concentrating on Future Air Systems.
Finally the Council recognise the efforts of the French Presidency
on the European Defence Industrial Base and recommend that their
work is explored further by the Agency in consultation with the
Commission. The UK recognises the importance of a consolidated
approach towards the European Defence Industrial base. We support
the Code of Conduct on Offsets and the work to increase the role
of SMEs. We recognise the need to reduce the scope of the work
on EDTIB and focus initially on Future Air Systems.
"OCCAR[47]
"The Council invites the Agency to conclude
an Administrative Arrangement with OCCAR (Organisation Conjointe
de Coopération en matière d'ARmement). The UK supports
this arrangement as a way of increasing armaments cooperation
by facilitating the transfer of projects from EDA to OCCAR once
the participating Member States agree. The UK believe that OCCAR
has the requisite skills and competencies to manage multinational
armaments programmes."
European Defence Agency 2009 Budget and Three
Year Financial Framework
10.21 The Minister explains in her third Explanatory
Memorandum of 26 November that this document was produced by the
Presidency in French with no official translation available and
attaches, for the Committee's information, a copy of a letter
from Head of the EDA to the Council asking approval for the agreed
budget.
The Government's view
10.22 The Minister says that the Council noted that
there would be no three year financial framework and agreed a
one year budget for 2009 of €30 million. She continues as
follows:
"The head of the Agency wrote to all Member
States in July with his thoughts on the budget for 2009. This
started the process of budget negotiations with Member States
through a number of official level meetings. The original estimate
by the Head of the Agency envisaged a 25% increase in the budget
from 2008. This growth aspiration was not shared by Member States
and these figures were revised downwards from €40M to €30M
which is €2M less than the potential fund available for 2008.
We, however, understand that the money spent in 2008 will be less
than the funds available due to the immaturity and lack of consensus
over the work on integration of UAVs onto non-segregated airspace.
As you will recall from last year's budget funds €6M (Earmarked
Revenue) was made available for work on integration of UAVs onto
non-segregated airspace, however, the Agency have only undertaken
€1.5M of work on frequency allocation to support this work.
"Because of the immaturity of the request for
Earmarked Revenue last year, in this year's budget negotiations
officials have reviewed the maturity of the new proposals for
Earmarked Revenue in 2009 and judged that non merited Earmarking
of funds. This is the primary reason for the difference between
the original budget request of €40M and the final agreement
of €30M."
10.23 Finally, the Minister says that agreement on
the 2009 budget was finalised at the 10 November General Affairs
and External Relations Council.
Conclusion
10.24 The Government continues to pursue its pragmatic
approach of broad, active participation, "ranging from maintaining
a watching brief of progress to active participation where the
projects align with our own UK objectives", of maintaining
budgetary discipline and of encouraging the Agency to focus on
where it can best add value.
10.25 We again report these developments to the
House because of the widespread interest in the development of
a European defence industry and strategy and in ESDP generally,
and are drawing this chapter of our Report to the attention of
the Defence Committee.
10.26 We shall also continue to retain the documents
under scrutiny pending the response from the Minister for Europe
to the questions raised by our consideration of the Report on
European Security and Defence Policy during the French Presidency,[48]
which are related to the activities discussed in these present
documents.
39 For full background on the EDA and its activities,
see http://www.eda.europa.eu/. Back
40
Stg Co Deb, European Standing
Committee B, 22 June 2004, cols. 3-24. Back
41
See headnote: (28212) and (29268) HC16-xi (2007-08), chapter 1
and (29341-3) HC16-xi (2007-08), chapter 2 (6 February 2008). Back
42
See http://www.publications.parliament.uk/pa/cm200708/cmgeneral/euro/080310/80310s01.htm
for the record of this debate. Back
43
See headnote: (29701) HC-xxv (2007-08), chapter 15 (25 June 2008). Back
44
Network Enabled Capability, Increased Helicopters' availability,
Counter-Improvised Explosive Device, Third Party Logistic Support,
Chemical-Biological-Radiological and Nuclear Defence, Medical
Support, Intelligence/Surveillance/Target Acquisition/Reconnaissance
Architecture, Military Human and Cultural/Language training, Comprehensive
approach/military implications, Maritime Mine Counter Measures,
Computer Network Operations, Counter Man Portable Air Defence
Systems Back
45
Network Enabled Capability, Increased Helicopters' availability,
Counter-Improvised Explosive Device, Third Party Logistic Support,
Chemical-Biological-Radiological and Nuclear Defence, Medical
Support, Intelligence/Surveillance/Target Acquisition/Reconnaissance
Architecture, Military Human and Cultural/Language training, Comprehensive
approach/military implications, Maritime Mine Counter Measures,
Computer Network Operations, Counter Man Portable Air Defence
Systems. Back
46
Category A projects or Programmes are ad-hoc collaborative efforts
are proposed by one or more participating Member States (pMS)
or the Agency's Chief Executive and presume general participation
of all 26 pMS unless they decide to opt-out. An example of this
type of collaboration is the current Joint Investment Programme
on Force Protection. Category B Projects or Programmes are ad-hoc
collaborative efforts established by one or more pMS and, in principle,
are open to participation by all pMS; however, in practice, Category
B projects or programmes tend to involve a smaller number of pMS
that decide to opt-in. Back
47
The Organisation Conjointe de Coopération en matière
d'ARmement was established by an Administrative Arrangement
on 12th November 1996 by the Defence Ministers of France, Germany,
Italy and the UK. Its aim is to provide more effective and efficient
arrangements for the management of certain existing and future
collaborative armament programmes. The four founding Nations went
on to sign a Treaty, the "OCCAR Convention", which came
into force on the 28th January 2001. Belgium and Spain joined
OCCAR in 2003 and 2005 respectively. The Netherlands, Luxembourg
and Turkey are also participating in a programme, without being
members of the organisation. For further information on OCCAR,
see http://www.occar-ea.org/. Back
48
See (30250) 16686/08 in chapter
8 of this Report. Back
| 
