Common European Defense market still years away.

• Author: Tiron, Roxana
• Position: Up Front

The newly created European Defense Agency is positioning itself to play a pivotal role in guiding European Union countries towards a common military equipment market.

But the Union, which has hit a barren period in cooperative programs, has a massive task ahead, despite the European Commission's efforts, asserted several of the continent's defense officials.

The European Commission is the political institution that governs the EU. Its four main roles are to propose legislation, to administer and implement policies, to enforce laws and to negotiate international agreements, mainly those relating to trade and cooperation.

Each member state, however, manages its own defense budget. This fragmentation poses a "major problem for all member states with defense industries," stated a defense procurement policy paper published last year by the Commission of the European Communities. The paper explored options for the creation of a common European defense equipment market, or EDEM.

Following budgetary reductions and the restructuring of armed forces, even wealthy nations, such as the United Kingdom, Germany and France no longer can afford the high cost of the research and development for new weapon systems. Ultimately, this predicament affects the competitiveness of the European defense industry, noted the commission.

Creating the EDEM will require an extensive review of procurement policies. At press time, a four-month consultation phase--in which stakeholders had a chance to comment on the commission's idea for more coherent regulations--was reaching its end.

At the core of the debate is an article allowing European states to diverge from the common market in the interest of national and "essential security interests." Most defense contracts are grounded in national procurement laws. Not only are laws complex, but they also differ from country to country, said Burkard Schmitt, with the Paris-based EU Institute of Security Studies. The result is a "complex regulatory framework that lacks transparency, is highly inefficient and hinders fair intra-European competition," he wrote in an editorial.

Manufacturing and selling in a national market is no longer sustainable in a global economy, Nick Witney, EDA chief executive, said on the website Euractiv, a portal dedicated to EU affairs. "The demand side needs to increasingly come together on the continental scale for the supply side to respond to that demand in a continental-scale market," he added.

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