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Back on July 7, 2005, DID covered the ongoing efforts of the EU’s European Defense Agency head Nick Whitney to create a radical push for greater integration in Europe’s defense industry, and greater cooperation on transnational defense procurement programs. Today’s story covering the FREMM frigate program may appear to be a cautionary tale; nevertheless, our updated story covering the flurry of European defense integration studies and proposals clearly indicates the political-bureaucratic interest in the general concept.

Now, European Union defence ministers have agreed on a new plan that appears to advance Whitney’s aims on the bureaucratic front. Discussions will begin on Nov. 21, 2005 re: attaching a code of conduct to this agreement – and that’s precisely where things are likely to get interesting.

Agence France Presse reports that The plan involves a voluntary system drawn up by the European Defence Agency (EDA) whereby defence contracts worth more than EUR 1 million (currently about $1.2 million dollars) would be advertised on a single electronic portal so companies across Europe could tender for them.

Accompanying this effort to improve transparency and reduce international transaction costs will be stricter European Commission enforcement. About half of the current European defense contracts can be exempted from open market rules under EU Article 296 ‘when their security interests are under threat.’ If the EC does indeed follow up and can put teeth in its enforcement, it may be able to combine increased transparency with greater contract openness by making it harder to use Article 296 for protectionist aims.

EDA head Nick Whitney, said the code of conduct would take about six months to implement. He also noted that countries could sign up to it “when they are ready.”

The Code of Conduct can be found here.

DID Op/Ed:

That last sentence is critical. Talk and paper do not a working international accord make. Nor will they solve the problems identified in our earlier article today, until and unless they are turned into action and backed by real spending as well as bureaucratic pressure.

One good bellwether is the EU’s air-to-air refuelling capabilities. The Lyneham meeting resulted in 10 countries issuing a statement announcing that they had agreed to create an ad hoc group, supported by the EDA, to consider possible new approaches to solving the air-air refueling shortfall. These forces are critical for effective power projection. It’s also worthy of note that the EDA release referred to “solving the EU’s shortfall,” which seems to point to an underlying agenda of rivalry with NATO.

EU countries and European NATO members have failed to deliver on more than a few signed defense commitments in the past, and the long term picture suggests that their difficulties will only increase. High welfare state costs, aging populations, slow economic growth, and the corresponding political imperatives to protect defense sector industrial jobs will make these integration efforts a tough row to hoe.

At the same time, many of these trends will also create imperatives toward defense cooperation, in order to reap some economies of scale and make even minimal defenses affordable. An increasingly dangerous world, coupled with a USA that is less and less inclined to subsidize Europe’s defense, may also create pressures of its own.

Time will tell.