Select Committee on European Union Thirty-Seventh Report


Letter from Rt Hon John Reid MP, Secretary of State for Defence, Ministry of Defence to the Chairman

  I was very pleased to receive a copy of the House of Lords European Union Committee report on the Current Developments in European Defence Policy. I welcome the Committee's views on this important topic and attach a memorandum with the Government response to the conclusions within the report.

26 April 2006

Government Response

  1.  This memorandum constitutes the Government's response to the House of Lords European Union Committee's report, Current Developments in European Defence Policy (27th Report of Session 2005-06, HL Paper 125, published on 3 March 2006). The Government welcomes the Committee's report as a valuable contribution to the development of European defence policy. Unless otherwise stated, references are to paragraphs in the Committee's report.

[Para 30] We welcome the Government's agreement to submit the Steering Board papers and other documents relating to the EDA, including the Head of Agency's Report to the December 2005 European Council. These documents are invaluable to our scrutiny of the EDA and should continue to be submitted at the earliest opportunity.

  2.  The Government welcomes the Committee's recognition of its efforts to assist the Committee's scrutiny of EDA business through the submission of EDA related documents. The Government aims to continue the practice of submitting EDA Ministerial Steering Board papers and other agreed documents to the Committee at the earliest opportunity.

[Para 31] We are disappointed that the three-year Financial Framework for the EDA has not been agreed and believe that it is important for the Agency's forward planning that an agreement is reached soon. The Government should take all necessary steps to ensure that participating Member States agree medium-term goals for the EDA, that appropriate resources be found and that a Financial Framework be set for 2007-09.

  3.  Agreement on a three year financial framework for 2007-09 is not required until the General Affairs and External Relations Council (GAERC) in November 2006. In the intervening period the Government will continue to engage in dialogue with other participating member states in order that a mutually acceptable outcome will be achieved at the GAERC. It will, however, maintain that the Agency should be primarily a catalyst for nations co-operating together rather than controlling a substantially larger budget in order to fund projects centrally.

[Para 32] Given the central coordinating role of the EDA it is important that all participating Member States fully participate in projects which have relevance to their defence needs and capabilities. Having encouraged the establishment of the EDA the Government has a particular role to play in helping to ensure that it becomes an effective and useful organisation.

  4.  The Government recognises its role in helping to ensure that the EDA becomes an effective and useful organisation. It will continue to influence the Agency's development through the EDA Steering Board as well as supporting the work of the various Integrated Development Teams, Project Teams and Capability Technology Boards. It is the Government's policy to participate as fully as possible in EDA projects, where this will provide benefit to the UK but not all projects will be aligned with the UK's needs in terms of capability and/or timing. It is for this reason that the Government believes that the majority of projects within the EDA should be Category B projects. This would allow participating member states to opt into those projects where they see benefits rather than all participating member states funding projects through one central fund.

[Para 33] We reiterate the conclusion in our earlier Report that the EDA needs, initially, to concentrate on a few achievable tasks and welcome the Government's emphasis on ensuring that projects undertaken by the EDA add value to that which could be achieved by the Member States individually. Where these criteria are met, the Government should support EDA initiatives in order that they are fully developed and ultimately achieved.

  5.  The Government agrees with the Committee's conclusion that the EDA should initially focus on a few achievable tasks, which add value to that which could be achieved by member states individually. Where these criteria are met, for example with the EDA initiative for a Code of Conduct on Defence Procurement, the Government has demonstrated its willingness to support actively the development of an initiative.

[Para 34] The Government must do all it can not only to encourage Member States to subscribe to the Code of Conduct on Defence Procurement, but also to abide by its provisions. Having played an instrumental role in the development of the Code, it is imperative that the Government lead by example and demonstrate full compliance with its provisions.

  6.  The Government was one of the main proponents of the Code and as such continues to support the Agency, through the EDA Steering Board, to encourage maximum member state participation. It is also clearly the Government's aim to demonstrate full compliance with the Code's provisions and play a leading role in the development of its implementation procedures.

[Para 35] We agree with the Government that the forthcoming Commission Communications on the European defence equipment market must be subject to rigorous scrutiny. Accordingly, they should be deposited for scrutiny along with a detailed explanatory memorandum outlining the Government's position at the earliest opportunity.

  7.  The Government wholly supports the Parliamentary Scrutiny process and will ensure that any communications issued by the Commission on its European defence equipment market initiative will be deposited for scrutiny along with an explanatory memorandum.

  8.  In point of clarification, paragraph 26 of the Committee's report suggests that the European Commission has decided upon two initiatives based on its Green Paper consultations ie a Communication on defence industries and markets and an Interpretive Communication relating to Article 296. The Interpretive Communication has indeed come about as a result of the Green Paper consultations but the Communication on Defence Industries and Markets is a separate work strand. While the European Commission's communication of 6 December (explanatory memorandum submitted for scrutiny on 28 February) did mention the need to address other aspects of an EDEM construction (eg security of supply, transits and transfers—similar to the item in the Commission's 2006 Work Programme) these were outwith the scope of this particular work.

  9.  Paragraph 27 of the report also indicates that the Committee is unclear how the Commissions initiatives fit with the EDA Code of Conduct. The Government believes that (as both the EDA and the Commission have consistently stated) these are complementary as the Code of Conduct addresses that part of the market where Article 296 is invoked while the Commission's work addresses that part of the market where Public Procurement Rules still apply.

[Para 36] Although the EDA is still in its early stages we are hopeful that it can play a significant role in the improvement of European military capabilities. However, full agreement needs to be reached between the participating Member States as to the extent of this role. The Government is well placed to, and accordingly should, encourage such agreement.

  10.  The Government believes the EDA will play a significant role in the improvement of European military capabilities. It will continue to fully engage with the Agency and participating member states to ensure that the Agency develops in such a way that it will be able to help deliver the capability member states will require in the future.

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