EDA Striving for Common Defense Market, But Success Still Years AwayJul 07, 2005 09:47 UTC by Defense Industry Daily staff
Nick Whitney, chief executive of the EU’s European Defense Agency, is calling for a radical overhaul of how member states spend their defense budgets, stressing interoperability and the need to avoid duplication. He believes there is a growing awareness by the 25 member states that their combined EUR 180 billion, or USD $218 billion annual defense expenditures could be used more efficiently. Strategic airlift, logistics, and communications are seen as particular weaknesses.
According to the International Herald Tribune, Whitney, a former senior official at Britain’s Ministry of Defense who now works under EU foreign policy chief Javier Solana, has set four main tasks for the Union:
# More transparency in bidding for military contracts and procurement arrangements, which currently do not apply EU internal market rules. Disputes between members who wish to exclude non-European countries and those who wish to open their competitions to global bidders are also a current sticking point.
# Reduce the number of national armored fighting vehicle programs from 22 to perhaps 12. He also wants to reduce the number of tanks from about 20,000 to 10,000.
# Interoperable communications for joint deployments.
# More collaboration on research and development, and more spending in the area. The USA currently outspends Europe in this area by a 5:1 margin.
DID has covered Europe’s next-generation infantry programs, all of which revolve around new C4ISR capabilities. Barring integraton of these modernizing efforts, communications interoperability is likely to be a significant challenge unless an EU program arises along the lines of America’s troubled JTRS.
An article in National Defense Magazine notes that the kind of integration Whitney seeks is still years away. In addition, there are other organizations besides EDA jockeying for similar roles within the European framework. Organisation Conjointe de Cooperation en matiere d’Armement (OCCAR) also known as the European Joint Organization for Armaments Cooperation, became a legal entity in 2001. It is acting as a multi-national agent on collaborative projects for its member countries, and has been managing the Airbus A400M military transport aircraft, the German-French Tiger helicopter program, the French-Italian surface-to-air anti missile system family, and the French-German Roland radar-guided surface-to-air missile.
EDA, whose role is solely advisory with no procurement powers, recommended that OCCAR manage programs, but OCCAR oversight so far is limited only to programs funded by its members: France, Germany, Italy, the United Kingdom, Belgium and soon Spain. The EDA would have to figure out how to handle projects that involve other EU members outside of OCCAR. The U.S. State Department also has yet to come up with a policy for how to deal with OCCAR-managed programs, which has upset U.S. contractors seeking to compete for A400M work, for example.
Meanwhile, the six leading European arms manufacturing countries: France, the United Kingdom, Germany, Italy, Spain and Sweden – are trying to implement the provisions of the European Security and Defense Policy (ESDP) framework agreement known as the letter of intent. The goal is to simplify transnational transactions, while ensuring governments retain some form of control. They are likely to continue to work among themselves, however, rather than delegate to the EDA.
It isn’t clear which agency will end up managing common defense procurement programs. Given the economic situations in Europe and the political interests involved in defense jobs, progress is likely to be slow.
Nevertheless, if Europe moves forward with a common defense procurement agency, then the U.S. State Department, which is responsible for issuing export licenses for military items sold to foreign customers, will have to adjust its practices to be able to deal with a multinational entity rather than just with a single country. National Defense Magazine also reports that the EDA is raising hackles across the Atlantic, however, which could result in defense trade barriers on both sides instead.
See also: EU Institute for Security Studies (May 2005) – Defence Procurement and the European UInion: The Current Debate [PDF]