27th REPORT: CURRENT DEVELOPMENTS IN EUROPEAN
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
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
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
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 transferssimilar
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.