Towards a more competitive and efficient defence and security sector

SMEs rest at the core of the Commission strategy. Small and medium enterprises suffer for the combination of all the elements mentioned above. The budget cuts and the industry migration to non-European markets, together with the creation of bureaucratic and regulatory cross-border barriers, could jeopardize those smaller business. A solution to this dangerous situation could be the creation of industrial clusters, gathering academia, research institutes, large companies and SMEs, better integrating the latter in the supply chain. SMEs would benefit from a greater number of contracts with giant enterprises and a wider access to niche markets. Additionally, the European defence industry as a whole would benefit from a higher negotiating weight in the international arena.

The current institutional debate is indicative of a renewed political interest on the topic of EDITB, but relevant details should not be underestimated. First of all, we will have to wait for the litmus test of the European Council, next December. Parliament has always been favourable to increased integration in the defence sector, as well as the Commission. Nonetheless, Member States willingness for more cooperation in the field is a precondition for any tangible result to be achieved. Secondly, even if Mr Tajani has shown he has properly understood the multifaceted nature of the issue, vagueness is the main feature characterising the actions listed in the notification of the Commission.

Third factor to be reckoned with is purely financial. An upcoming trend reversal in the decline of the national defence budgets is highly unlikely, while the Commission strategy requires specific funds to achieve its full implementation. The Commission tried to jump the gap by proposing the use of structural funds to support SMEs and invest in technological research as well as to promote industrial restructuring and retraining the workforce to cope with overproduction. Looking back to the 2007-2013 MFF, this appears to be a smart solution, as a large amount of funds were not used. Yet the Parliament itself, despite the support of several deputies, has highlighted a number of possible impediments.

Firstly, as the funds are generally intended for those European regions most affected by economic problems, it is pretty difficult to see in such areas funds being diverted from essential social needs to the defence sector. Second, the funding system operates according to a bottom-up mechanism through which companies presents their own projects and demand for investments; on the contrary, the defence consolidation would rather require a top-down action, driven by the EU, MSs and large enterprises. Moreover, defence companies would find something to sink their teeth into when competing with well-trained fund-busters civil sector companies. Finally, the proper allocation of funds would require the advice of the EDA , which instead can only act on behalf of the MSs and must manage its duties with a small budget, based on the “doing more and better – with less” principle (in this regard, some MEPs have suggested to fund the EDA through the EU budget).

To conclude, we must not forget a simple and basic issue. The EDITB, even before an economic project, is a political idea; it is the result of an economic and political context in which “industrial sovereignty” in the defence sector has become more and more difficult to preserve. In this perspective, a common European purpose should be preliminary to any attempt to further integration. The advantages are undoubtedly a lot: greater interoperability of forces, reduced dependency on foreign suppliers, holding industrial and technological leadership. All these features would together enable the EU to effectively and flexibly address the XXI century security challenges.

Defence cooperation perhaps cannot, by itself, represent a remedy to the fall of investments; but, as the Commission argued, “if spending more is difficult, spending better is a necessity”.

Photo: EADS expo at “Le Bourget Air Show” in Paris, last June. (© EADS.com)