23 European Defence
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12773/13
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COM(13) 542
| Commission Communication: Towards A More Competitive and Efficient Defence and Security Sector
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| Legal base | —
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| Document originated | 24 July 2013
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| Deposited in Parliament | 29 July 2013
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| Department | Defence
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| Basis of consideration | EM of 22 August 2013 and Minister's letter of 2 August 2013
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| Previous Committee Report | None
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| Discussion in Council | December 2013 European Council
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| Committee's assessment | Politically important
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| Committee's decision | Not cleared; further information requested; Opinion sought from the Defence Committee under Standing Order No. 143(11)
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Background
23.1 The Commission begins this Communication with two quotations.
"The world needs a Europe that is capable of deploying military
missions to help stabilise the situation in crisis areas….
We need to reinforce our Common Foreign and Security Policy and
a common approach to defence matters because together we have
the power, and the scale to shape the world into a fairer, rules
based and human rights' abiding place."[81]
"The Council reiterates its call to retain and further develop
military capabilities for sustaining and enhancing the CSDP. They
underpin the EU's ability to act as a security provider, in the
context of a wider comprehensive approach [and] the need for a
strong and less fragmented European defence industry to sustain
and enhance Europe's military capabilities and the EU's autonomous
action".[82]
The Commission Communication
23.2 Against this background, the Commission Communication, accompanied
by its staff working paper,[83]
argues that, in a world faced with numerous complex, inter-related
and unforeseeable security challenges, which do not respect national
boundaries; where the US is shifting its focus to Asia; and where
the traditional dividing line between internal and external security
has broken down, Europe has to assume greater responsibility for
its security at home and abroad. The Commission says that:
"To punch its weight, the EU needs to develop a credible
CSDP. This evolution must be fully compatible with NATO and its
principles."
23.3 The Commission notes the cuts in defence budgets and decline
in defence R and D: but also the nearly 1.4 million jobs in Europe
that depend directly or indirectly on the defence industry. Thus,
the Commission says:
"The European Defence Technological and Industrial Base (EDTIB)
constitutes a key element for Europe's capacity to ensure the
security of its citizens and to protect its values and interests.
Europe must be able to assume its responsibilities for its own
security and for international peace and stability in general.
This necessitates a certain degree of strategic autonomy: to be
a credible and reliable partner, Europe must be able to decide
and to act without depending on the capabilities of third parties.
Security of supply, access to critical technologies and operational
sovereignty are therefore crucial."
23.4 Against this background, the Commission proposes a number
of high-level actions to improve the competitiveness of the EDTIB.
It stems from the work of the Commission's Defence Task Force,
which was established in November 2011, and with which the Commission
says both the European Defence Agency (EDA) and the European External
Action Service (EEAS) "have been fully associated".
It is intended to be the Commission's contribution to the defence
industry element of the December 2013 European Council discussion
on defence.
23.5 The Commission says that it intends "to
take action in the following strands":
- "Further deepen the internal
market for defence and security. This means first of all to ensure
the full application of the two existing Directives.[84]
Based on this acquis, the Commission will also tackle market
distortions and contribute to improving security of supply between
Member States;
- "Strengthen the competitiveness of the EDTIB.
To this end, the Commission will develop a defence industrial
policy based on two key strands:
— "Support
for competitiveness — including developing 'hybrid standards'
to benefit security and defence markets and examining the ways
to develop a European certification system for military airworthiness.
— "Support
for SMEs — including development of a European Strategic
Cluster Partnership to provide links with other clusters and support
defence-related SMEs in global competition.
- "Exploit civilian military
synergies to the maximum extent possible in order to ensure the
most efficient use of European tax payers' resources. In particular
by:
— "concentrating
its efforts on possible cross-fertilisation between civil and
military research and the dual-use potential of space;
— "helping
armed forces reduce their energy consumption and thereby contribute
to the Union's 20/20/20 targets.
- "In addition, the Commission
suggests actions which aim at exploring new avenues, driving the
strategic debate in Europe forward and preparing the ground for
more and deeper European cooperation. In particular by:
— "Assessing
the possibility of EU-owned dual-use capabilities, which may in
certain security areas complement national capabilities and become
effective and cost-efficient force multipliers;
— "Considering
launching a preparatory action for CSDP-related research focusing
on those areas where EU defence capabilities are most needed."
23.6 The Commission invites Heads of State and Government
to discuss this Communication at the European Council in December
2013, together with the report prepared by the High Representative
of the Union for Foreign Affairs and Security Policy, on the basis
of the following considerations (the Commission's emphasis):
— "Decisions
on investments and capabilities for security and defence should
be based on a common understanding of threats and interests. Europe
therefore needs to develop, in due course, a strategic approach
covering all aspects of military and non-military security. In
this context, a wider political debate on the implementation of
relevant provisions of the Lisbon Treaty should be held;
— "The
Common Security and Defence Policy is a necessity. To become effective,
it should be underpinned by a fully-fledged Common European
Capabilities and Armaments Policy as mentioned in Article
42 of the TEU;[85]
— "To
ensure coherence of efforts, CSDP must be closely coordinated
with other relevant EU policies. This is particular important
in order to generate and exploit synergies between the development
and use of defence and civil security capabilities;
— "For
CSDP to be credible, Europe needs a strong defence industrial
and technological base. To achieve this objective, it is crucial
to develop a European Defence Industrial Strategy based on
a common understanding of the degree of autonomy Europe wants
to maintain in critical technology areas;
— "To
maintain a competitive industry capable of producing at affordable
prices the capabilities we need, it is essential to strengthen
the internal market for defence and security and to create
conditions which enable European companies to operate freely in
all Member States;
— "Facing
severe budget constraints, it is particularly important to allocate
and spend financial resources efficiently. This implies inter
alia to cut back operational costs, pool demand and harmonise
military requirements;
— "To
show real added value of the EU framework, what is needed is to
identify a joint project in the area of key defence capabilities,
where EU policies could fully be mobilized."
23.7 Subject to the Council discussion, the Commission
intends to create a detailed roadmap with concrete actions and
timelines, and to establish specific consultative mechanisms with
Member States, in conjunction with the EDA and EEAS, in order
to prepare and implement this roadmap.
The Government's view
23.8 In his Explanatory Memorandum of 22 August
2013, the Minister for International Security Strategy at the
Ministry of Defence (Dr Andrew Murrison) says that the Communication
does not alter Government policy, and that there are "many
proposals which the Government supports and encourages as they
are consistent with the Government's growth agenda." These
include, he says:
"the Commission taking 'specific measures to
ensure that the [Defence and Security Procurement] Directive is
correctly applied and fulfils its objective', which should encourage
greater opening of defence markets; the use of EU structural funds
to encourage less efficient industry to leave the defence market;
the proposals relating to the support of defence SMEs such as;
'the Commission will adapt existing tools [including Commission
research funding and financial grants] designed to support SMEs
to the needs of defence-related SMEs"; and the aspiration
to increase the synergies between the EU civil research programme
and defence research."
23.9 However, the Minister says, some of the proposed
actions in the Communication "cause concern", which
he divides into the following four broad categories:
a. "Those that could impinge on Member
States' sovereignty, for instance 'the Commission intends
to support a pre-commercial procurement scheme to procure prototypes…'
and 'the Commission will consider the possibility to support
a Preparatory Action for CSDP Research, focusing on those area
where EU defence capabilities would be more needed'. While
the exact scope of these proposals remains unclear, the
Government has made it clear to the Commission that we would oppose
any measures by the EU to develop and, of more concern, to own
high-end military or dual-use capabilities such as Remotely Piloted
Air Systems (RPAS), high-resolution satellite imagery or military
satellite communication equipment;
b. "Those related to the external market
and exports, such as 'The Commission will establish a dialogue
with stakeholders on how to support European industries in third
markets…It will also explore how EU institutions could promote
European Suppliers in situation where only one company from Europe
is competing…'. The Government would not wish to see
the Commission involved in external market matters which would
constrain our ability to promote and pursue defence export opportunities.
We would also question the idea of the EU supporting a 'European
supplier' in an export situation — this would be virtually
impossible to enact without implementing some regulation around
a 'European Economic Operator' and could have a negative impact
on UK companies supporting non-European Allies in export opportunities;
c. "Those which suggest the potential
for duplication of effort, including those measures
where we would consider that Member States, NATO or EDA currently
have the lead and therefore see that the Commission may create
a role for itself in competition with, or duplicating, the role
of these other, better-placed organisations. Examples would include:
the Commission exploring with the EDA options to establish 'a
mechanism to draft specific European standards for military applications
on request from Member States', which could duplicate the
NATO standardisation work; the Commission establishing
'a European certification system for military airworthiness',
which could duplicate work being undertaken with the EDA;
or 'the Commission has put forward a proposal for an EU
space surveillance and tracking (SST) support programme in 2013.
Building on this proposal, the Commission will assess how to ensure,
in the long term, a high level of efficiency of the SST service',
where we would rather see them draw on the existing Member
State infrastructure in place;
d. "Those which imply unnecessary regulatory
interference in the defence market. While the Commission
has ruled out legislation in the near term, there remains a risk
that it could interfere in the defence market through promoting
regional specialisation, or by the issue of new guidance on defence
procurement. Similarly, its proposal to issue a green paper on
controls of defence assets (mergers and/or foreign investment)
risks new Commission controls."
23.10 The Minister also takes issue with the proposed
action whereby "the Commission will work with the EEAS
on a joint assessment of dual-use capability needs for EU security
and defence policies. On the basis of this assessment, it will
come up with a proposal for which capability needs, if any, could
best be fulfilled by assets directly purchased, owned and operated
by the Union", saying that this:
"presents a 'red line' for the UK. Not only
does this impinge on the Member States' sovereignty, it also suffers
from duplication of efforts already in place. Pooling & Sharing
and NATO Smart Defence have both been established to enable Member
States to co-operate, identify capability gaps, prioritise and
work together filling these gaps and delivering a 'European Solution'.
The Government does not believe that there is, or should be, a
role for the EU in this area."
23.11 The Minister goes on to say that the Government
has engaged proactively with the Commission's Task Force and has
also "worked closely, on a bilateral basis, with our Letter
of Intent (LOI)[86] partners
and through the EDA, to shape Commission thinking"; and that
"the European Defence industry has also lobbied strongly."
23.12 Looking ahead, the Minister says:
"The UK continues to work closely with industry,
including through the ADS association in particular, in addition
to engaging with Member States, to establish their views on these
issues;
"This is not a proposal for legislation, therefore
no impact assessment has been made. This is the first Communication
on this subject and we will continue to engage with the Commission,
Allies and the EDA to ensure UK interests are protected while
the proposed actions and resulting road maps are developed;
"The Commission intends to discuss these proposals
at the Council Meeting in December 2013; and
"In the lead up to this discussion the Government
intends to work with Member States and the Commission to ensure
that our areas of concern are properly addressed, and that UK
interests are fully taken into account when taking forward any
of these actions."
The Minister's letter of 2 August 2013
23.13 This letter, from the Minister for Europe (Mr
David Lidington), is in response to one sent to him by the Committee
shortly before the summer recess, asking him to provide information
about the proposals that the 27-28 May Foreign Affairs Council
asked to be prepared for the December European Council on: increasing
the effectiveness, visibility and impact of the CSDP; enhancing
the development of defence capabilities; and strengthening Europe's
defence industry — matters, we said, that should be subject
to scrutiny prior to the December European Council.[87]
Conclusion
23.14 The Minister's letter is relevant not only
to this Commission Communication but also to the 2012 Annual Report
on CFSP (which we consider elsewhere in this Report) and to the
High Representative's review of the EEAS (ditto).
23.15 In the first instance, we wish to hear more
from the Government:
— first,
in September, regarding Baroness Ashton's formal proposals for
the December European Council discussion on defence (pace
the Minister, we can see no reason why this document should be
classified: on the contrary, it should be open to the widest discussion);
and
— secondly,
about the discussion of these issues at the 6-7 September "informal"
Foreign Affairs Council; the full FACs in October and November;
and European Council President Van Rompuy's recommendations, which
the Minister for Europe says are due in November.
23.16 Looking further ahead, it would seem likely
that this Commission Communication (and the EEAS review) will
warrant debating before the December European Council. Although
some of the specific proposals might be welcome, other proposals
and calls for "a strategic approach covering all aspects
of military and non-military security" and for "a wider
political debate on the implementation of relevant provisions
of the Lisbon Treaty" are potentially more controversial.
Before taking a definitive view we would welcome the Opinion of
the Defence Committee on the significance of the Communication,
in accordance with Standing Order No. 143 (11).
- In the meantime, the document remains under
scrutiny.
81 European Commission President Jose Barroso's "State
of the Union 2012 Address", 12 September 2012 , available
at http://europa.eu/rapid/press-release_SPEECH-12-596_en.htm. Back
82
19 November 2012 Foreign Affairs Council Conclusions on Military
Capability Development. See http://www.consilium.europa.eu//uedocs/cms_data/docs/pressdata/EN/foraff/133560.pdf. Back
83
SWD(13) 279. Back
84
On defence and sensitive security procurement (2009/81/EC) and
on intra-EU defence transfers (2009/43/EC). Back
85
Article 42 TEU is reproduced at the first Annex to this chapter
of our Report. Back
86
France, Germany, Italy, Spain and Sweden. Back
87
Which is reproduced at Annex 2 to this chapter of our Report. Back
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