Report calls for new approach to defence

Date: 01/05/1997

By Rory Watson

EUROPEAN industry and governments must adopt a radical new approach towards their defence industries if the Union is to develop an effective common foreign and security policy and compete successfully against the United States.

British Socialist MEP Gary Titley argues that an overhaul of the present patchwork of arrangements is long overdue if the necessary economies of scale and specialisation are to be achieved.

His view is expected to be endorsed by fellow MEPs next month when the European Parliament examines how to boost the competitiveness of one of Europe's major industries.

The message comes as EU governments are preparing to finalise their plans for Union reform in the Intergovernmental Conference.

Titley believes that the IGC, which is due to complete its work in mid-June, could give a decisive boost to the development of a common European armaments policy by making this a clear objective in the revised treaty.

At the same time, governments are being urged to use the reform negotiations to develop a restrictive arms export policy by clamping down on existing loopholes.

Critics of the present arrangements believe that the lack of controls on exports can heighten regional tensions and result in EU troops facing an enemy armed by their own industries.

But Titley, whose wide-ranging report will be debated by MEPs during their mid-May plenary session in Strasbourg, argues that other changes are also vital and believes there is now a general readiness to tackle sensitive defence and armaments issues which were previously jealously kept out of the EU arena.

“The Franco-German paper on security and defence to the IGC was a very important development and helped stimulate discussion. There is a clear desire to open up the debate a bit more,” said Titley.

The Socialist MEP also wants EU governments to make treaty provisions allowing member states to take whatever measures they consider necessary to protect their defence industries the exception, rather than the rule as is the case now. This would go a long way towards extending the Union's single market measures to the defence sector.

Arguing that the distinction between civil and military research is becoming increasingly blurred, Titley is pressing for the EU's wide-ranging research programme to be extended to finance work on dual-purpose technologies and disarmament projects involving mines and the use of biological and chemical weapons.

If the Union is to restructure its defence-related industries and improve their competitiveness, it must first overcome a number of major hurdles identified by military experts.

The obstacles include the absence of transnational legal structures, different national specifications for defence equipment and the fact that cross-border mergers often require government consent which may be refused on grounds of national security.

The stakes involved are huge, particularly in Germany, France, Italy, the UK and Sweden, where 90&percent; of the Union's total production of defence equipment is based.

The sector's annual output is worth 50 billion ecu to the EU - equivalent to 3&percent; of total industrial output. It provides jobs for 600,000 people and indirect employment for a further 400,000 in the supply and service industries.

At the same time, it is operating in an increasingly difficult environment as the peace dividend takes effect and public expenditure is squeezed. Between 1985 and 1994, total military spending fell by 5.3&percent; and EU manufacturers are facing tough competition from their US counterparts.

According to European Commission research, 75&percent; of the major conventional weapons bought by EU countries come from the US.

Not only does American industry benefit from the political and military power of the US and the depreciation of the dollar, but it also enjoys economies of scale because it is less fragmented and compartmentalised than its European competitors.

While there are four combat tank programmes in Europe, there is only one in the US. Similarly, the Union operates 16 infantry combat vehicle projects, while the US has only three.