Documents considered by the Committee on 23 March - European Scrutiny Committee Contents

12   European Defence Agency










EDA draft budget 2011

Council Guidelines for the Agency's work in 2011

Head of Agency's Report to the Council

Legal base
Deposited in Parliament15 March 2011
Basis of considerationEMs of 23 February 2011
Previous Committee ReportsHC 428-iii (2010-11), chapter 20 (13 October 2010); also see HC 5-iv (2009-10), chapter 3 (15 December 2009); (30175) —; (30176) 15442/08; and (30212) —: HC 19-ii (2008-09), chapter 10 (17 December 2009); also see (29701) HC 16-xxv (2007-08), chapter 15 (25 June 2008); and (28212) and (29268) HC 16-xi (2007-08), chapter 1 and (29341-3) HC 16-xi (2007-08), chapter 2 (6 February 2008)
Discussed in Council9 November 2010 Foreign Affairs Council
Committee's assessmentPolitically important
Committee's decisionCleared


12.1  The European Defence Agency (EDA) 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".


12.2  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.

12.3  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."

12.4  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;
  • to work, in close cooperation with the Commission, on steps towards an internationally competitive market for defence equipment in Europe.

12.5  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."


12.6  The EDA is an Agency of the European Union. The High Representative of the Union for Foreign Affairs and Security Policy (HR; Baroness Ashton) is Head of the Agency and chairs its decision-making body, the Steering Board, 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.

12.7  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.

12.8  Unanimity is required for decisions on role, goals and targets; QMV for internal operations.


12.9  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),[69] LoI (Letter of Intent) and NATO. The Agency has a special relationship with Norway (through an 'Administrative Arrangement')."[70]

12.10  The Committee was fully engaged in the development of the EDA, culminating in a debate in June 2004 in European Standing Committee B.[71] There, the then Secretary of State stated that its principal purpose would be to improve Member States' military capabilities.

12.11  The then 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). The House has thus been kept well-informed of developments during the EDA's formative years.

12.12  As previous reports note, a recurrent feature of the Agency's history thus far has been a failure by the participating Member States to reach agreement on the level of growth in the financial framework, with the UK favouring annual budgets rather than a three year framework; while others continued to hanker after a more expansive approach, the UK has pursued a pragmatic approach of broad, active engagement, participation in some projects but not all, maintaining budgetary discipline and encouraging the Agency to focus on where the Agency could best add value.

The Agency's Financial Framework 2011-2013 and the Agency's 2011 budget

12.13  The document notes that the Foreign Affairs Council in Defence Ministers' composition decided on 9 November 2010 to postpone by one year the decision to adopt a three year financial framework for the Agency and agreed instead to a one-year budget for 2011; that budget to be the same as in 2010, of €30.5 million.

The Government's view

12.14   In his Explanatory Memorandum of 23 February 2011, the Minister for International Security Strategy at the Ministry of Defence (Mr Gerald Howarth) says that no new policy implications arise from this document, and continues as follows:

"The EDA's budget for 2011 came as a result of the decision by the EDA not to pursue a three-year financial framework for agreement. Although the adoption of a three-year financial framework has never been achieved for the Agency, participating Member States will look to agree a financial framework for 2012-2014. In the interim, a one-year budget has been agreed for 2011. The UK was successful in achieving a budget freeze for the EDA for 2011 of €30.5m, the same as for 2010. The precise breakdown of the budget is still to be determined by the Council. The EDA's current proposal is that the functional budget (running costs) should be set at €22m, which includes the establishment of three key new posts to help deliver priority projects such as Helicopter Training. This is €100k less than for 2010 and would leave €8.5m for the operational budget (project preparations; feasibility studies).

"Throughout negotiations, the UK consistently argued that the EDA had to be realistic about its budget requirements, particularly in light of the financial challenges on defence spending that were faced by many of the participating Member States. We considered the Agency's proposal for a budget increase of around 4% to be unreasonable. We could only accept freezing of the 2011 at 2010 levels (€30.5 million). We were successful in achieving this objective. We will continue to work towards agreeing a three-year work programme and budget for the Agency starting with the period 2012-2014."

Council Guidelines for the Agency's work in 2011

12.15  The Foreign Affairs Council in Defence Ministers' composition welcomes the results achieved by the EDA in 2010 and "progress made in generating tangible defence capabilities"; acknowledges the Agency's important role in capability development in the promotion of defence cooperation "under the current constraints on defence budgets"; and, in laying down these guidelines, makes a variety of recommendations about the focus and direction of the Agency's work for 2011.

The Government's view

12.16   In his further Explanatory Memorandum of 23 February 2011, the Minister for International Security Strategy at the Ministry of Defence (Mr Gerald Howarth) draws attention to the concentration in the Council guidelines on the EDA strategic framework:

  • the Capability Development Plan (CDP) and its critical capability priorities;
  • the Agency's three endorsed strategies: European Defence Research and Technology (EDRT), European Armaments Co-operation (EAC) and the European Defence Technological and Industrial Base (EDTIB);

and what he describes as other important initiatives and programmes, such as the European Defence Equipment Market, Pooling and Sharing, the Single European Sky, Radio Spectrum, exploring synergies between military and civilian capability development and dual-use technologies, dialogue and improving co-ordination and co-operation with stakeholders.

12.17  The Minister says that "he is content that the Council has set the right focus and direction for the Agency's work in 2011."

Head of Agency's Report

12.18  The report highlights the progress made on the EDA's major initiatives and programmes during 2010, including European Defence Technological and Industrial Base (EDTIB), European Defence Research and Technology (EDRT), European Armaments Co-operation (EAC), the Capability Development Plan (CDP) and certain capability development projects and programmes, such as work on Counter-Improvised Explosive Devices (C-IED), the Helicopter Training Programme (HTP) and Maritime Surveillance (MARSUR). The report also provides an update on the Agency's interaction with other international organisations.

The Government's view

12.19   In his third Explanatory Memorandum of 23 February 2011, the Minister for International Security Strategy at the Ministry of Defence (Mr Gerald Howarth) says that the Secretary of State for Defence has recently agreed that the UK will remain in the EDA for a period of two years; the Government will "then review the status of our membership"; and "will work closely with our key Allies to improve the EDA's effectiveness and performance."

12.20  The Minister then comments on aspects of the Report as follows:


"The European Defence Technological and Industrial Base strategy sets out important policy objectives and enablers to consolidate demand, increase investment and improve competitiveness. Work has continued on Future Air Systems and on the Ammunition sector as two pilot cases for the Agency and its Member States. The UK supports the EDA's work to develop a rationalised, more efficient and responsive EDTIB, and improved transparency and competition in the European Defence Equipment Market (EDEM).


"The EDA is working to improve synergies between the Agency's and Commission's work on R&T, with the aim of developing the European Defence Technological and Industrial Base (EDTIB) and improving European competitiveness.


"The EDA's participating Member States have made previous agreements on: a best practice guide to help in the early stages of co-operation projects undertaken in the Agency; an online tool for matchmaking national projects as co-operative opportunities; and a common skills framework for European armaments staff. The EDA has begun to apply these agreements to its work during 2010. There has, however, been minimal progress towards achieving an Administrative Agreement between the EDA and OCCAR. An agreement would enable EDA projects to be transferred to OCCAR for management and delivery. The UK remains supportive of such an agreement being established.


"The CDP is designed to align future capability trends with current shortfalls based on European Defence Planning Process outcomes. The CDP brings together the plans and programmes of Member States and lessons from operations to produce a product that helps inform them on the critical capability shortfalls. Following the establishment of the top 12[72] capability development priorities in June 2008, the CDP has continued to guide the EDA's work programme. The EDA's work with the EUMC/EUMS and participating Member States on updating the CDP started in 2010 and will finish in 2011. The UK supports the work of the Agency on the CDP process and is content for it to be reviewed regularly to ensure that it remains an effective tool to guide the EDA's activities.


"In April 2009, the EDA Steering Board in Defence Ministers formation approved the launch of the C-IED Level 2 Exploitation Capability project. A level 2 capability is the ability to conduct forensic analysis in a forward operating base. Implementation of the project is progressing, which will see a level 2 capability demonstrator deployed to Afghanistan in mid-2011. We are content with the project and its progress, which should improve the C-IED capability of other Member States, thereby improving the possibility for greater burden sharing on operations.


"The UK is the lead framework nation for the synthetic training programme, which will provide mission-essential tactics, training and deliver 50+ aircrews over the next two years, trained to the standards needed to cope with high threat and extreme environmental conditions. The project has clear benefits for operations in Afghanistan and elsewhere.


"The Wise Pen (five retired Admirals) report has highlighted the importance of a comprehensive approach to Maritime Surveillance. Participating Member States identified that the work on Maritime Surveillance would require greater co-ordination with EU and Commission activities to provide greater clarity and coherence. The report has been a catalyst for promoting co-operation and efficiencies in the maritime domain and for developing synergies between all relevant stakeholders.


"Throughout 2010 the EDA and participating Member States have been preparing a replacement for the Council Joint Action of 2004 on the Agency's statute, seat and operational rules. The change is necessary in accordance with the provisions of the amended Treaty on European Union (TEU) and as a planned periodic review of the document. The UK's position has been for the replacement document to retain the existing agreed Joint Action text as far as practicable on the basis that it is acceptable to Member States and has so far proved fit for purpose. The Agency remains hopeful of submitting a draft Decision to Council for endorsement soon.


"The Agency has continued to explore and develop relations with third parties, including with the European Commission, the European Space Agency, NATO, the LOI group and with the US and Switzerland. The UK encourages the EDA to explore potential synergies between civil and military capability development and to improve co-operation and co-ordination of activities with other organisations — with particular emphasis on recognising work already being undertaken by NATO — to avoid the duplication of effort."


12.21  We consider the previous Head of Agency report elsewhere in this Report, on the basis of a Supplementary Explanatory Memorandum from the Minister containing the substantial commentary that, with the Government's Strategic Defence Review then underway, he felt unable to provide last July.[73] At that time, all that he was able to say was that for the time being the Government would continue to participate in the Agency but, as part of the work on the Strategic Defence and Security Review, was reviewing all aspects of UK defence engagement with international institutions, including the EDA, to ensure that it matched the UK's priorities and interests. We accordingly note that, for the time being at least, the Government has concluded that the Agency and the UK's priorities and interests are synchronised, and look forward to scrutinising in good time the Council Decision that will replace the "founding" Council Joint Action of 2004.

12.22  We use the words "in good time" deliberately. In the case of these three documents, we received the Minister's EM three weeks before we received the documents. The documents themselves were adopted by the Foreign Affairs Council all of four months ago. We do not consider that this is consistent with the original undertaking given to the House (see paragraph 12.11 above). We therefore expect the Minister to take whatever steps are necessary to ensure that, when the next Head of Agency Report is produced, it is deposited in the normal way (i.e., before his EM) and, secondly, it is deposited swiftly after the relevant Council meeting.

12.23  In the meantime, we clear the present documents from scrutiny.

12.24   In addition, we again draw them to the attention of the Defence Committee.

69   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 Back

70   For full background on the EDA and its activities, see  Back

71   Stg Co Deb, European Standing Committee B, 22 June 2004, cols. 4-24. Back

72   "NetworkedEnabledCapability(NEC);Counter-ImprovisedExplosiveDevices(C-IED);Increasedavailabilityofhelicopters;Intelligence,SurveillanceandReconnaissance(ISR)Architecture;Chemical,Biological,RadiologicalandNuclear(CBRN)Defence;Medicalsupport;ComputerNetworkOperations(CNO);MilitaryHumanIntelligenceandCultural/LanguageTraining;CounterManPortableAirDefenceSystems(C-MANPADS);ThirdPartyLogisticSupport(TPLS);ComprehensiveApproach-militaryimplications;MaritimeMineCounter-Measures(MMCM)."


73   See chapter 11 of this Report. Back

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