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Progress towards the European Defence Agency

01 March 2004

European governments have since the early 1990s launched numerous initiatives to strengthen their armament cooperation. All these have been outside the EU framework because its member states have traditionally excluded armaments from the European integration process. They preferred to organise their cooperation in other forums. But there is now a fair chance that this will change as there is an increasing readiness to bring armaments into the EU framework.
This is a positive development, because it indicates a growing awareness of two facts: First, the widening gap between defence budget constraints and runaway development costs for complex weapon systems means EU member states will have to improve their armaments cooperation considerably if they want to maintain a competitive European Defence Industrial and Technological Base and equip their armed forces adequately. Second, the EU can add value to the reform of the armaments sector, as it has a broad range of CFSP and Community instruments and policies in those areas where action is most needed:
· <b>Procurement</b>. To be economically worthwhile, the growing need for interoperability should be translated into common equipment programmes with common technical characteristics and procurement schedules. To achieve this, Europe needs a common procurement system that allows the harmonisation of military needs and better programme management.
· <b>Research</b>. Europe notoriously spends too little on military research, and only a small proportion of this money is spent on European cooperation. Far better military research coordination is indispensable and the somewhat artificial distinction between civil and military research must be overcome to encourage potential synergies.
· <b>Market</b>. Different national regulatory frameworks are a major cause of inefficiency, so a European defence equipment market with a single set of rules and regulations for procurement, competition, transfers and exports would be a major step towards industrial cooperation but also greater inter-EU competition.
Three key documents are structuring the debate on reform and EU involvement in armaments: The Commission's Communication on a Defence Equipment Policy, adopted in March 2003, the Convention's draft Constitutional Treaty, and the June 2003 Thessaloniki Presidency Conclusions. The Commission's Communication focuses on research and market issues, and the Convention's blueprint and the Thessaloniki Summit's conclusions refer to the creation of a EU Armaments, Research and Military Capabilities Agency.
<i>The Agency's tasks have for some time been envisaged as: </i>
· Contributing to the identification of EU member states' military capability objectives and evaluating observance of their capability commitments;
· Promoting harmonisation of operational needs and adoption of effective, compatible procurement methods;
· Proposing multilateral projects to fulfil the objectives in terms of military capabilities, ensuring coordination of the programmes implemented by the member states and management of specific cooperation programmes;
· Supporting defence technology research, and coordinating and planning joint research activities, as well as the study of technical solutions to meet future operational needs;
· Contributing the identification and, if necessary, the implementation of any useful measure for strengthening the industrial and technological base of the defence sector and for improving the effectiveness of military expenditure.
These, at any rate, were the tasks as identified by the Convention on the future of Europe. The idea in mid-2003 was that if approved by the Intergovernmental Conference, they would become part of the new EU Treaty that is hoped will enter into force in 2007 or 2008. This schedule became confused, though, when the Thessaloniki European Council decided to task `the appropriate bodies of the Council to undertake the necessary actions towards creating, in the course of 2004 [emphasis added], an intergovernmental agency in the field of defence capabilities development, research, acquisition and armaments'.
This meant that one of the provisions of the new EU Treaty would be implemented even before it is ratified and entered into force. This approach seems legally and politically somewhat dubious, but it has created a considerable dynamic: Only a few weeks after the Thessaloniki summit, the Council established an ad hoc Preparation Group to develop a basic concept for the Agency's organisation and missions. The group presented its findings in mid-November in a report which the General Affairs and External Relations Council (GAERC) endorsed as the basis for the next steps.
According to the report, the Agency will aim at (a) developing defence capabilities in the field of crisis management, (b) promoting and enhancing European armaments cooperation, (c) contributing to identifying and, if necessary, implementing policies and measures aimed at strengthening the EDITB and (d) promoting, in liaison with the Commission where appropriate, research aimed at fulfilling future defence and security capabilities requirements.
In its initial stage, the Agency will act as a coordinating focus point for the existing network of armaments bodies and support the Council in the ECAP process. Once fully operational, the Agency will be responsible in particular `for the integration between operational aspects of capabilities and the capability acquisition and development ones'. In this stage, the Agency will `incorporate or assimilate the principles and practices of the relevant elements of pre-existing arrangements/groupings/organisations (OCCAR, Letter of Intent (LoI), Framework Agreement, WEAG/WEAO).'
The Agency's structure will consist of a Steering Board, meeting at the level of defence ministers or their representatives, and the head of the Agency will be the High Representative for CFSP. There will also be a chief executive and a core staff. Council decisions on the Agency will be taken at GAERC meetings by Defence Ministers, after preparation by EU Ambassadors meeting in COREPER and by the Political and Security Committee (PSC). The Commission will be fully associated with the work of the Agency, but the role of the National Armaments Directors is, in contrast, yet to be defined.
An Agency Establishment Team (AET) is now to prepare the operational setting up of the Agency. The AET will take forward work on the financial, legal and administrative aspects of the Agency's creation, and will specify its missions with a view to launch in 2004.
Given the poor record of previous European attempts to set up an armaments agency, the current project has gained impressive momentum. But, this is by no means a guarantee of success, especially as important divergences persist among member states on key issues like procurement philosophy or defence-industrial strategy. These divergences are particularly difficult to overcome in an intergovernmental decision-making process involving 25 governments and numerous administrations. Add to that bureaucratic inertia and the traditional reluctance of national defence establishments to surrender prerogatives to European bodies, and one gets an idea of the difficulties involved.
Given today's financial, military and industrial realities, Europe needs an Agency that is strong enough to have a real impact on the armaments sector. To achieve this, it should be developed along the following lines:
· The main objective of the Agency should be twofold: first, it should ensure that the capability needs of Europe's armed forces are met, wherever possible, through European cooperation in order to foster standardisation of military equipment and generate economies of scale. Second, it should enhance the efficiency of cooperation in order to exploit potential cost savings effectively.
· The focus of the Agency should be on the most important gaps, specifically the harmonisation of capability needs and military research. To link the two areas effectively, the Agency should develop a long-term approach to capability needs: It should analyse when and in which area a new need will arise, and which technological possibilities will exist then to meet the shortfall. Such a long-term approach is the only effective way to harmonise replacement schedules and military requirements. The Agency should analyse both EU and national planning, as capability needs for the EU-Headline Goal Force are merely a sub-set of national needs. The Agency, therefore, needs maximum information about all national planning to identify as many occasions for cooperation as possible.
· Working methods should go beyond the traditional intergovernmental schemes. The Agency should establish permanent working groups, bringing together procurement, research and military experts. Participation in these groups should be flexible, depending on the actual participation in a given project. In general, working methods should be as commercial as possible. This implies lean structures, flat hierarchies and a maximum of delegation of responsibilities to the actual management level.
· The Agency needs sufficient autonomy and political support. Governments should not intervene into the day-to-day business of the Agency. The latter should have, in particular, an autonomous research budget and be free to select contractors for its projects. The Agency needs strong political support to overcome possible resistance from national stakeholders, namely national procurement administrations and industry.
· Cooperation with other actors is key. The decision as to which capabilities are needed is first a political and then a military decision that lies beyond the scope of the Agency. The latter can only work efficiently if it gets the necessary input from military planners in member states. Second, the Agency should focus on capability- and project-related military research, and leave advanced and security-related research to other, more competent bodies. This in turn implies close cooperation, with the Commission in particular, to allow for potential synergies.
An Agency organised along these lines would not be a revolution in armaments affairs, but it could certainly generate new synergies and increase efficiency. However, one must not forget that even a strong Agency will not by itself be able to solve all the problems of Europe's armaments sector. Successful reform must be based on a comprehensive approach that includes: (a) The establishment of a European defence equipment market based on legally binding commitments and a common set of rules, and (b) a coherent research strategy that covers the whole technological spectrum of military, security and civil research.
Reforms in areas as complex as armaments are by definition cumbersome and time-consuming. Even if there were sufficient consensus and political will to act, measures could only be implemented progressively. Even if a basic structure is set up in 2004, it will take time for the Agency to become fully operational. Existing elements must be brought together, new bodies created, personnel recruited and so on. And once established, the Agency will need time to reach cruising speed and make its weight felt. In other words, establishment of the Agency will take a considerable period of time.