9th REPORT: THE EUROPEAN DEFENCE AGENCY
Ministry of Defence's Response
1. This memorandum constitutes the Government's
response to the House of Lords European Union Committee's report,
European Defence Agency (9th Report of Session 2004-05, HL Paper
76, published on 16 March 2005). The Government welcomes the Committee's
report as a valuable contribution to the development of European
security and defence policy. This memorandum sets out the Government's
response to the report's conclusions.
[Para 78] We recognise the instrumental
role the Government has played in the establishment of the EDA.
In order for the Agency to be successful, the Government must
now ensure that all relevant parties understand its role.
2. The Government welcomes the Committee's
recognition of the key role the UK has played in establishing
and shaping the EDA. Originally a joint UK-French initiative,
we have been instrumental in influencing the course of its development
and ensuring that it has been given a firm, capabilities-based,
foundation from which to take forward work on improving Europe's
defence performance. The Government will continue to support the
EDA's efforts towards the development of Europe's defence capabilities.
As the Committee points out, having helped shape the Agency, it
is important that we continue to influence its development and
ensure that there is a common understanding amongst the relevant
parties regarding its role.
[Para 79] We note that the ratification,
or otherwise, of the Constitutional Treaty by all Member States
has no immediate effect on the legal base of the European Defence
Agency.
3. The Committee is right to conclude that
the Constitutional Treaty has no immediate effect on the legal
base of the EDA.
[Para 80] We are concerned that procedures
for Parliamentary scrutiny of the ESDP in general are inadequate.
The Government should therefore explain how it will ensure adequate
Parliamentary scrutiny of Council and Steering Board decisions
relating to the EDA. The Government should agree with Parliament
the types of documents that will be deposited for Parliamentary
scrutiny.
[And Para 82] We will return to the issue
of the EDA's funding at the time the Council is due to determine
the three year budgetary framework for the Agency. We recommend
that the Government deposits in Parliament for scrutiny a detailed
analysis of the EDA's programme and resource needs at that time.
4. The Government recognises the importance
Parliament attaches to its scrutiny role and will continue to
work with the Committee to ensure appropriate arrangements are
in place for the effective scrutiny of EDA business. It understands
the Committee will be looking into scrutiny arrangements for the
Common Foreign and Security Policy, within which ESDP falls, later
this year and looks forward to assisting the Committee in its
deliberations.
5. In general, meetings of the GAERC which
include discussion of EDA business will be covered by the existing
arrangements established for the scrutiny of Council deliberations.
However, the Government now proposes that the following documents
specified in Council Joint Action 2004/551/CFSP of 12 July 2004,
together with any Government observations on them, should be deposited
for scrutiny:
— The EDA's report to the Council
on its activities during the previous and current year, to be
submitted in May of each year (Article 4.2a of the Joint Action).
— The Council guidelines issued
annually to the EDA in relation to its work programme for the
following year (Article 4.3 of the Joint Action).
— The financial framework issued
every three years by the Council to the EDA (Article 4.4 of the
Joint Action).
6. In addition to these documents, the Government
see scope for further improving the transparency of Ministerial
Steering Board meetings. It proposes that Ministers should write
to the Committee Chairmen before each Ministerial Steering Board,
setting out the issues on the agenda and the Government's position
on them, to be followed by a summary of the meeting shortly afterwards.
The Government recognises the need to ensure the Committees are
provided with these documents in good time, but highlights that
the timescales under which the EDA operates may mean that this
is not always possible.
7. Against this background, the Government
suggests that an informal working group is established, with officials
from the Committee, the House of Commons European Scrutiny Committee,
the Ministry of Defence, FCO and other relevant parties, to take
forward work on this important area and agree arrangements for
the Parliamentary scrutiny of EDA business. We suggest that any
such arrangements may need to evolve as the EDA itself develops.
[Para 81] The Council has set the EDA highly
ambitious tasks. We are concerned that the EDA should not be burdened
with expectations which it has not been given the resources to
fulfil. We urge the EDA to be very transparent in reporting on
its activities and spending.
8. The Government fully supports the importance
the Committee attaches to the EDA being transparent in reporting
its activities and spending. The proposals we have made for Parliamentary
scrutiny of Council and Steering Board decisions will promote
that transparency.
9. The Government is committed to ensuring
that the EDA is established and develops in a manner which will
enable it to fulfil its role of supporting efforts to improve
the EU's defence capabilities in the field of crisis management.
However, it also considers it is important to
ensure that the EDA's primary function is to support Member States,
which is why the operational budget for 2005 (some €3 million)
is relatively low.
(In point of clarification, the figures quoted
at paragraph 25 of the report should be in Pounds Sterling. To
be more precise, the UK contributed 17.28 per cent of the EDA's
budget for 2004 (based on assessments of Member States' gross
national income). This covered the period from its formal establishment
in July 2004 to the end of that year and equated to €308,775.51.
For the calendar year 2005, the UK contribution is 18.07 per cent,
equating to €3,596,803. This includes non-recurring costs
associated with the initial set-up of the Agency.)
[Para 83] Consideration should be given
to a rationalisation of the different bodies and, if the EDA is
proving to be successful, the possibility for mergers should be
encouraged.
10. The Government agrees that there should
be some rationalisation of the various bodies involved in European
defence cooperation where it is sensible and practical to do so.
At the very least, their activities should be coordinated.
11. The Government therefore welcomed the
decision made by Defence Ministers in November 2004 to close the
Western European Armaments Group (WEAG) by no later than the end
of June 2005, following the transfer of its activities to the
EDA. In the intervening period WEAG and the EDA have been working
cooperatively to manage the necessary transitional arrangements.
The Government also believes that it may be beneficial for the
Western European Armaments Organisation (WEAO) Research Cell to
be incorporated into the European Defence Agency. Discussions
are under way to enable this to take place by the first quarter
of 2006.
12. The Government agrees that the activities
of the Agency and the Organisation for Joint Armaments Cooperation
(OCCAR) complement one another. Clearly, both organisations need
to develop quickly, effective working relationships that recognise
their key areas of competence. This work is also under way.
13. Finally, the six nation Letter of Intent
(LOI) Framework Agreement is a separate treaty that aims to facilitate
cross-border industrial restructuring between signatory nations.
It is the Government's aim that, wherever practicable, the outputs
from the implementation of the Framework Agreement should be woven
into the procurement procedures of as many EU Member States as
possible. Initial work to facilitate this is under way between
the EDA and the LOI member states.
[Para 84] The improvement of European military
capabilities depends on the willingness of the Member States to
take action. Nonetheless, we have concluded that the EDA is well
placed to help in this process. The EDA's strength is the Steering
Board. The Agency might make a difference by:
— facilitating co-operation between
Member States;
— suggesting workable solutions;
and
— identifying problems, including
naming and shaming Member States.
14. The Government welcomes the Committee's
conclusion and agrees that the EDA's structure will help it succeed.
As the Committee points out, the EDA will play an important role,
not only in facilitating cooperation and suggesting workable solutions,
but also in attaining and maintaining standards.
[Para 85] We accept that the EDA may in
this instance have some advantages over the NATO framework. The
EU framework may prove more effective in mobilizing political
commitment and providing impetus for action. Communication and
co-operation with NATO will still be paramount to avoid duplication
of effort. We urge the Government to press this point in Council.
15. The Government is fully committed to
ensuring that ESDP develops in a manner coherent with NATO and
agrees that communication and cooperation between the EDA and
NATO will be important in avoiding unnecessary duplication. In
this respect, the Joint Action establishing the EDA explains that
"reciprocal transparency and coherent development" between
NATO and the EDA will be ensured through the existing framework
for capability development (the Capability Development Mechanism).
The Joint Action also envisages the development of Administrative
Arrangements for EDA—NATO cooperation. These arrangements
will be developed in due course, complementing the EDA—NATO
staff-to-staff contact that already takes place routinely.
[Para 86] We strongly believe that the EDA
needs to concentrate, initially, on a few achievable tasks. The
EDA will gain Member States' confidence by enabling an ESDP mission
to operate more effectively. Once trust in the Agency's capacity
to deliver has been built up, more strategic issues such as relative
defence spending or specialisation of forces can be approached.
16. The Government welcomes the Committee's
thoughts and agrees that the EDA will build up Member States'
confidence by narrowing the focus of its efforts on specific areas
where it can demonstrate its worth. The EDA's work programme for
2005 targets four flagship projects: Command, Control and Communications
(Capability Directorate), Armoured Fighting Vehicles (Armaments
Directorate), Uninhabited Air Vehicles (Research and Technology
Directorate) and the European Defence Equipment Market (Industry
and Markets Directorate). Whilst much of this year has necessarily
been consumed with recruiting staff and other administrative tasks,
the EDA has begun to examine these areas of work and will present
a progress report to Defence Ministers at the Steering Board meeting
on 23 May.
[Para 87] We believe that the United Kingdom
currently has the most open defence procurement market in Europe.
We are broadly in favour of the voluntary code of conduct approach
suggested by the Government to achieve greater transparency across
the Union. However, we recognise that this approach has disadvantages
as there is a great deal of uncertainty whether other Member States
will open their defence markets. Rigorous monitoring and peer
pressure will be key to this approach. If the voluntary approach
is not successful the Commission's proposals will have to receive
further consideration.
17. The voluntary Code of Conduct approach
has many of the potential benefits of a regulated market. For
example, it will improve transparency and has the potential to
increase competition and create more efficient defence equipment
markets. Such an approach should also enable implementation in
the near-term, and avoids the introduction of a further regulatory
burden on Member States and industry. Nevertheless, the Government
recognises the potential challenges associated with a voluntary
mechanism, in particular the risk of non-compliance. For this
reason, the Government has stressed the need to handle carefully
the introduction of a Code of Conduct and to ensure that it enjoys
the robust support of Member States.
[Para 88] We are of the opinion that the
EDA's priority should be the EDEM: an area in which the EDA may
come to play a prominent part. We ask the Government to deposit
in Parliament the EDA's 2 March 2005 report to the Steering Board
on how the EDA can best be involved in the EDEM.
18. On 2 March the Steering Board of the
European Defence Agency met in the formation of National Armaments
Directors (NADs). NADs discussed the EDA's report on the creation
of a European Defence Equipment Market, and reached decisions
on the EDA's input to the European Commission's Green Paper on
Defence Procurement and a programme of work for the EDA on the
European Defence Equipment Market issue. A copy of the report
and the Steering Board decisions is at Annex A, (not printed).
[Para 89] We accept that in some cases the
distinction between research for civilian and military security
purposes may be artificial. The security research concept will
need to be handled carefully to ensure that opportunities for
useful research are not lost because of institutional jealousies
and arguments about competence. Mr Witney offered a possible solution
whereby the Commission could allocate money for the EDA to manage,
even though the projects would have clear defence as well as civilian
implications. We hope that this pragmatic solution will be found
acceptable.
19. The Government sees the benefits of
cooperation on certain aspects of security research. However,
it continues to have strong reservations about the scope of the
proposed European Security Research Programme (ESRP). The Government
set out its position in a non-paper of 23 March, a copy of which
is at Annex B, (not printed).
20. It is imperative that there are effective
safeguards in place to ensure the ESRP has a clear focus on civil
security research. Whilst it is recognised that that there are
areas of "dual-use" technology, relevant to both civilian
and military applications, a suitable framework will be needed
to manage and scrutinise such dual-use proposals. Member States
must be able to monitor the work and so the Government has proposed
the establishment of a Regulatory Committee to ensure there is
adequate oversight of the Commission's implementation of the ESRP.
21. Furthermore, the Government has proposed:
(i) to use COREPER (the Committee consisting
of the Member States' Permanent Representatives to the EU) as
the only cross pillar body and ensure it refers up (to the General
Affairs and External Relations Council) or down (to Common Foreign
and Security Policy (CFSP) structures) issues with defence implication;
or
(ii) to use language similar to the Galileo
safeguard to the effect that any decision on ESRP which had defence
implications would be for decision by the Regulatory Committee
or the Council in accordance with Articles 17 and 23 TEU, which
make clear that all decisions under CFSP with military implications
shall be taken by the Council acting unanimously. The European
Defence Agency—at Member States' request—could provide
expert opinion on projects referred to Pillar II structures.
22. In either case, close co-ordination
with the European Defence Agency will be paramount. Indeed, the
Government will consider with an open mind any EDA proposal that
fulfils the criteria set out in the non-paper. The key issue is
the need for ESRP to ensure a clear focus on civil security research.
Subject to analysing any proposals in detail, including for compatibility
with wider UK policy on the EU's Research and Development activities,
it may be acceptable for civil security research, with a defence
dual-use, to be funded by ESRP and managed by EDA. However it
would not be acceptable for a primarily defence technology (such
as Uninhabited Air Vehicles, Chemical Biological Radiological
Nuclear defence, Network Enabled Capability technologies etc),
with a civil dual use, to be funded by ESRP (whether managed by
EDA or not).
Letter from the Chairman to Rt Hon John
Reid MP, Secretary of State, Ministry of Defence
Thank you for your response to our Report: "The
European Defence Agency" (HL, European Union Committee 9th
Report of Session 2004-05) dated 23 May 2005 which was considered
by Sub-Committee C at its meeting on 9 June.
The response was warmly welcomed by the Sub-Committee
who were grateful for your agreement to submit a number of documents
relating to the EDA for scrutiny by Parliament. We would ask that
you also submit the EDA's annual November report in which the
Agency will outline its suggested budget and draft work programme
for the following year (Article 4.2b of the Joint Action). This
document would inform the Council's guidelines (Article 4.3 of
the Joint Action) which is one of the documents which you propose
to submit for scrutiny. In our Report we recommended that the
EDA be "very transparent in reporting its activities and
spending" (para 81). It would therefore be helpful to have
the EDA's own proposals made public by being deposited for scrutiny.
This would facilitate scrutiny of the Council's guidelines by
allowing for a comparison of the two documents.
22 June 2005
Letter from Rt Hon John Reid MP to the
Chairman
Thank you for your letter dated 22 June 2005
concerning the deposition of an additional European Defence Agency
(EDA) document for scrutiny by the House of Lords Select Committee
on the European Union.
I am very pleased to hear that the Government
response to your Committee's report on the EDA was warmly received.
The Committee's report was welcomed by the Government and is a
valuable contribution to the development of European Security
and Defence Policy.
As you know the Government has undertaken to
deposit, for scrutiny, a number documents related to the EDA,
which are specified in the Council Joint Action 2004/551/CFSP
of 12 July 2004. In addition to this the Government is happy to
deposit the EDA's annual November report (Article 4.2b of the
Joint Action) as requested. I hope that this will be helpful to
the Committee and will assist in improving transparency of EDA
activities.
28 June 2005
Letter from the Chairman to Rt Hon Dr
John Reid MP
Thank you for your letter dated 28 June 2005
in which you undertake to deposit the EDA's annual November report
(Article 4.2b of the Joint Action). We are grateful for this undertaking
and look forward to receiving the report in November.
7 July 2005
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