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Defending Europe’s defence industry - 24/07/2013

Italian coastguard vessel displaying EU logo © EU

Action plan to boost competitiveness of Europe’s defence and security industries.

At a time when Europe faces new security challenges, individual countries are struggling to equip their armed forces adequately. Recent operations in Libya highlighted important shortfalls in key military capabilities.

The European commission is proposing an action plan to make the defence industry more efficient and competitive.

Strategic importance

Keeping people safe is the main reason for strengthening defence capacity, but the industry is also important economically. It employed around 400 000 people in 2012, creating another 960 000 jobs indirectly, with a turnover of €96bn.

Yet Europe is facing increased competition in the defence market. Brazil, Russia, India and China (the "BRIC" countries) are steadily stepping up spending.

Cutting costs

Defence equipment is often extremely expensive, while defence budgets are being cut – along with other public spending. Between 2001 and 2010, EU defence spending fell from €251bn to €194bn. Cuts have particularly affected research – crucial for staying ahead of new threats – where spending fell by 14% between 2005 and 2010.

Increasing cooperation at EU level would help to lower costs. EU countries have 16 different types of frigate between them. If all countries had the same model, for frigates and other equipment, they could develop economies of scale.

Commission proposals

The action plan is designed to strengthen EU cooperation in defence equipment, increase competitiveness, and foster new links between civil and military research – for example on chemical, biological, radiological or nuclear detection, and remotely piloted air systems.

Other initiatives include helping small businesses within the defence sector to share facilities, promoting in-demand skills, and ensuring the supply of crucial raw materials.

Defence policy remains in the hands of individual EU countries. But, they cooperate through the EU foreign and security policy to develop civilian and military capabilities – for more effective conflict prevention and crisis management. Defence falls under this policy.

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