European Defence Industrial Policy
Communication on the European Defence and Security Sector adopted on 24 July 2013
The Communication sets out Commission proposals to strengthen the internal market and support the competitiveness of the defence and security industries.
The Commission's defence industrial policy is designed to promote competition, innovation, support SMEs and provide a strong industrial base for the Common Security and Defence Policy (CSDP).
At the heart of this policy is the Defence Package, designed to set out a modern policy and legislative framework to improve competitiveness, introduce greater transparency and cut unnecessary red tape. The strategy includes two directives aiming to simplify the transfers of defence-related products within the EU and coordinate procedures for contract awards in the fields of defence and security.
Following the adoption of the Defence Package and the transposition of the legislation, the Commission established a Task Force on Defence Industries and Markets. Its objective is to examine what more the Commission can do to support Member States to help improve the competitiveness of the defence industry and strengthen the internal market.
Why is more competition necessary?
- The European defence market is highly regulated at a national level. Europe's defence-related industries (primarily the defence part of sectors such as aeronautics, space, electronics, land systems and shipbuilding) largely operate outside the internal market.
- Fragmented markets create red tape, hamper innovation and lead to duplication of defence programmes and research – undermining our global competitiveness and the effectiveness of the CSDP.
- Reduced defence budgets and escalating development costs make it too expensive for any single European country to maintain a comprehensive national defence industrial base.
The defence industry is mostly concentrated in six Member States (France, Germany, Italy, Spain, Sweden and the UK) although companies producing ancillary equipment and systems are found all over Europe. More than 1.350 SMEs play an important role in the European defence sector and are of critical importance to the supply chain.
The defence sector can provide an important contribution to regional economic development. In order to introduce the concept of smart specialisation and regional policy funding to European companies and research centers the European Commission and the European Defence Agency carried out a workshop on 28 January 2013. For more information see the agenda, the presentations and the proceedings of the event.
The European defence equipment market is technology and research-intensive (electronics, IT, transport, biotechnology and nanotechnology – with many important spin-offs in civil sectors, e.g. satellite navigation).
Data on the industry can be found on the European Defence Agency website.