Address by Carlo Magrassi, EDA Deputy Chief Executive-Strategy at the ESF Conference "New Development in ESDP", European Parliament, Brussel, 5 October 2010
Thank you very much for inviting me to
today’s Conference, which takes place at an interesting moment in time.
On the one hand the Lisbon Treaty is in
place. Expectations are high on the further development of the Common Security
and Defence Policy and on the role of the European Defence Agency, the only Agency
specifically mentioned in the Treaty.
On the other hand Member States are facing serious
defence budget cuts, resulting from the global economic crisis. Only a few
European Defence Ministries have escaped the inevitable. The overwhelming
majority is facing cuts in the order of 5 to 10 percent. Some even have to cope
with cuts up to 50 percent.
So, how can we square the challenges of the
second decade of CSDP with the decrease of resources in the years to come?
There are three answers: “cooperate, cooperate
and cooperate”.
How can we improve European defence
cooperation? How can we get better capabilities with less money? These are the
key questions.
I would like to provide answers from three
different angles. I believe that all three are equally important in order for
Europe to have the military capabilities at its disposal, needed for tomorrow’s
operations.
These three elements are:
One: to increase speed and depth ofEuropean military capability development;
Two: to consolidate and reform Europe’s
defence industrial base; and
Three: to deepen the coordination between
the defence and the civilian security sector.
More European defence cooperation
Let me start with the first point: the need
to further increase European military cooperation. Some will say that the
current situation offers great opportunities to cooperate more and to invest
more together, as national budgets might in some cases become too small for
purely national solutions. Of course, this is true. European cooperation should
be the solution to the problem.
But there is also a clear risk related to
the impact of the economic crisis. Member States might fall back in their
traditional behaviour of finding purely national solutions, perhaps driven by
protecting national industrial interests.
This would be very detrimental to the aim
of improving European capabilities, because it will reinforce fragmentation –
which is in essence Europe’s defence problem.
The consequences will be continued lack of
interoperability and standardisation, duplication of even scarcer resources, and
less instead of better capabilities.
So, the logical choice is quite clear:
let’s harmonise our military requirements –
thus ensuring that we improve interoperability and standardisation;
let’s combine our investment in research
& technology, when there is a need for R&T;
let’s construct together cooperative
armaments programmes, but not make the same mistakes of the past which led to
higher costs and longer delivery schedules; and
let’s increase market competition and
strengthen the industrial base in the true European sense.
You will not be surprised: these are
exactly the agendas of the European Defence Agency and we are making good
progress in all these areas.
And they are delivering.
Quite a number of Common StaffTargets or Common Staff Requirements have
been developed or are about to be delivered in capability areas like CBRN
protection, space situational awareness, camp protection – just to name a few.
These form the basis for the next step, namely
to prepare collaborative armaments programmes for which groups of Member States
in various composition sign up, in line with the Agency’s characteristic of
working on the basis of géométrie variable.
But improving capabilities is not just
about developing new equipment. Our Helicopter Training Programme, fully up and
running this year after a pilot phase in 2009, delivers immediate output. Some
360 air crews have been trained so far in life exercises and through
theoretical training. They are now flying in Afghanistan, a clear prove of how
EDA even contributes to the operational output of NATO.
Another example is the project on
Countering Improvised Explosive Devices or road-side bombs, the killer number
one factor in crisis management operations. By the middle of next year a
forensic laboratory to investigate the artifacts left after a CIED explosion –
an essential step to improve knowledge needed for preventing future incidents –
will be deployed to a real theatre of operations. The project is led by France,
with the participation of several other Member States. It is paid for by EDA
and the lessons learned will be made available to all Member States.
In R&T we have broken with the past,
when multinational projects were based on the principle of juste retour with
money staying within national borders, spent by national R&T entities, for
national purposes.
The Joint Investment Programme formula is
based on true European cooperation, where money is shared, contracts are
awarded on the basis of competition by multinational R&T consortia and the
results are available to all contributors to the Programme. Thus, participation
also becomes attractive for smaller states. With a small contribution one gets
a massive return in terms of results.
The first Joint Investment Programme on
Force Protection is nearing its end and producing tangible results, for example
with regard to sniper detection or body protection. Other JIPs are up and
running.
The JIPs are programmes with a large amount
of participants. For example, 19 Member States plus Norway participate in the
JIP-Force Protection.
The Agency is also running projects of
smaller groups in areas like Software Defined Radio, Future Transport
Helicopter, the Multinational Space-based Imagery System (MUSIS) or Maritime
Mine-Counter Measures.
In the area of air traffic insertion of
Unmanned Aerial Systems the MIDCAS project, with participation of five Member
States led by Sweden, aims at delivering a UAV demonstrator by 2012 equipped
with sense and avoid technologies, needed for flying unmanned aircraft in air
space together with civil manned air traffic. Once developed this will make
Europe world-leader in these sense and avoid technologies.
Another important area of work is
Airworthiness, covering all technical, regulatory and certification measures
needed to make aircraft “fit to fly”. For military aircraft currently national
military authorities define and certify airworthiness of helicopters and
fixed-wing aircraft. Scientific research has shown that up to 25 percent of the
costs of new aircraft are spent on airworthiness.
Imagine what we could have saved with the
NH-90 helicopter, of which some 600 have been ordered by eight European
countries for a total value of around € 20 billion euro – of which now up to €
6 bn is spent for national military airworthiness purposes.
European Defence Industry
This brings me to my second element, needed
for improving Europe’s military capabilities: the supply side.
Industry and Market issues are crucial in
EDA’s activities.
Why? Fragmentation of defence structures in
Europe stretches all the way from the demand to the supply side. National
chains of requirements, via national research & development to national
production lines in industries to a large extent still characterise the
situation.
We will not succeed in creating more
standardised and interoperable European defence capabilities by only
harmonising requirements, although this is an absolute prerequisite. Without a
true European Defence Technological Industrial Base the current situation is
likely to continue, where we have seven different armed helicopters, three main
battle tanks, three different fighter aircraft and so on.
So, what have we done so far?
In fact, in the Industry & Market area
the Agency booked its first results. Already in 2005 the Ministerial Steering
Board approved the Defence Procurement Regime. It aims at creating a more
transparent and competitive European Defence Equipment Market, which has been
closed off under article 296, now art. 346 of the Lisbon Treaty.
The Code of Conduct on Defence Procurement
has been active since 1 July 2006, with 26 subscribing Members – 25 EU Member
States plus Norway. Defence procurement contracts with a value of € 1 million
or more are placed on the Electronic Bulletin Board on the EDA website,
accessible to any potential supplier in the world.
Some 560 contracts have been published so
far. The total value is about € 22 billion. Of the 337 contracts awarded under
competition over 31 percent have been awarded across national borders.
We are still far away from full
competition, but a big change has been realised.
Last year we activated our newest Code of
Conduct on Offsets or compensation orders, a practice widely applied in a large
number of European countries for defence procurement contracts.
The Offsets Code will not end the use of
offsets, which is a vital economic tool for those Member States with an active
offset policy. But gain, it will create transparency in an area which so far
has been surrounded by secrecy and lack of openness.All offset policies of the subscribing
Members are placed on our website. Every offset arrangement has to be reported
to the Agency. In a few years’ time we will have a data base on the use of
offsets with all kind of detailed information, which will provide the baseline
for next steps.
To complement EDA’s market efforts, the
Agency is conducting the Level Playing Field exercise which is based on a
political Declaration of the Ministers of Defence from last year.
This initiative aims at contributing to the
establishment of fair and equitable conditions for all European defence
industries while acknowledging the specificities of the defence sector.
Through this exercise we will be able to
assess the measures taken so far in view of their mitigating nature and to
judge where additional initiatives would be needed to realise a truly European
Defence Equipment Market as a key feature of a genuinely European Defence
Technological and Industrial Base.
This leads me straight to the industrial
dimension.
On the industrial side the Agency has
launched two pilot projects to investigate the potential for preserving and
developing key industrial capabilities: the Ammunition Sector and Future Air
Systems.
Member States have tasked the Agency to
work on identifying the key industrial capabilities to be preserved or
developed in Europe and conversely where we can reasonably plan to source our
future needs from the wider world market.
This work is strategic. It will cover, over
time, all defence capabilities but it has started with a key sector: aerospace.
We will develop the methodology and identify how best to implement effective
solutions.
Future Air Systems is the proof of concept.
EDA is working with all stakeholders in creating a European approach to the
aerospace industrial base - one that recognises that it is more than a
disparate range of national capacities.
Europe’s military aerospace industrial base
has long been a driving force for technical innovation, wealth generation and
business growth. It is formed by many world class companies supported by a
strong supply chain rich in innovative SMEs. The question is how we can ensure
today’s industry remains strong and prosperous in future. A future with less
investment?
Our objective is to agree with all
stakeholders a roadmap and a plan of actions to ensure Europe can count on this
key industry for it future military requirements.
This work – encouraging targeted investment
in the industry – will be challenging but it is vital both for governments and
industry that we succeed.
Ammunition is a cross-cutting sector for
the European armed forces affecting among others the performance of platforms
and interoperability in the field, with an estimated annual production value
(not including missiles) of 24 bn USD for the year 2010.
EDA’s work on Ammunition is addressing the
sector from both the demand and the supply side taking into consideration the
industrial dimension and the market conditions as well, with a view to propose
measures to improve the effectiveness of Member States’ military expenditure in
this sector. Thus, it is interesting not only for Member States with
considerable industrial capabilities but also for those acting only as a
customer.
Civil-military synergies
I come now to my third element: closer
cooperation between the defence and civilian security side.
From the outset EDA has linked its
activities in areas of dual use technologies to those conducted on the civilian
side. Software Defined Radio, for which EDA-funded and Commission-funded
studies have been conducted, is a primary example. The objective is clear: we
should realise civil-military interoperability, thus we need standards and
concepts which are interchangeable.
Unmanned Aerial Systems is another example
of close coordination – again serving the aim of making dual use technologies
available to both communities serving defence purposes of civilian activities
for border control, environmental purposes or disaster relief.
In 2009 we have proposed to bring the
interaction with the European Commission but also with the European Space
Agency to a higher level. In November that year Ministers of Defence approved
the “European Framework Cooperation for Civilian Security, Space and Defence-related
Research” or EFC in jargon language.
The EFC aims at systematically
synchronising research investment under the EDA umbrella, by the Commission and
by ESA.
The Agency is now preparing a first
coordinated defence contribution to the EFC, a new Joint Investment Programme
on CBRN Protection, aimed at developing some key technologies in this area.
CBRN protection is an excellent area for
civil-military research coordination. Civilians can equally be exposed to
chemical, biological and radiological threats as the military might be.
We are currently also preparing, together
with all EFC stakeholders, the next area for cooperation which I believe is of
particularly importance in terms of CSDP capabilities, civil-military
cooperation and Europe’s global competitiveness. This is the area of Unmanned
Aerial Systems, where we are preparing a Joint Investment Programme to address
the remaining technological challenges for UAS Air Traffic Insertion, as well
as exploitation of their capabilities to support seamless flying of UAS in
Europe by 2015. We aim for the launch of this UAS programme by the Defence
Ministers at their Steering Board meeting November.
On 1 July this year EDA organised, together
with the Commission, a conference on UAS. In addition to building a community
to address this issue and to raise awareness on the many dimensions of the UAS
area, the conference came up with a recommendation to establish a High-Level
Group for bringing coherence to European UAS cooperation.
The close coordination with the Commission
is not limited to research. Our Wise Pen Team’s think piece on Maritime
Surveillance has clearly indicated that connecting military and civilian,
national and multinational assets is the crucial step to take in order to
realise a European wide maritime surveillance federation of networks.
The Wise Pens, contracted by EDA, have been
able to bring military and civilian actors together at the European level, who
previously lived in separated worlds.
The newest step on civil-military synergies
is the elaboration of a civil-military work plan for CSDP capability
development, politically launched by the Council in November last year.
In capability areas like communications,
transport, protection, logistics and intelligence civilian missions fill their
requirements currently by ad hoc solutions, every time repeating slow and
time-consuming procurement procedures.
A more systematic approach to civilian
capability development in these ‘hard ware’ areas is urgently needed. Once they
have been defined we can connect them to military requirements in order seek
synergies.
Final remarks
Let me conclude with a few final
observations.
Firstly, it is impossible to question the
logic of European cooperation in the defence area. Operationally it makes sense
– so that the soldiers of different nationalities can work more closely
together instead using standardised and interoperable assets. Financially it
makes sense to stop wasting scarce euros through intra-European duplications.
However, turning such logic into political
will and practical output is quite another challenge. The powers resisting
multinational solutions are still strong. I believe we have no other choice of
underlining the added-value of working together. Naturally, the more concrete
results are produced, the more convincing the argument becomes.
Secondly, also under the Lisbon Treaty
European defence remains intergovernmental. Our shareholders are the Member
States. Thus, it is crucial to work very closely with decision-makers in the EU
capitals, from the Ministerial level all the way down to the experts. Without
them there will be no capabilities for CSDP.
This is the reason why the Agency has set
up a wide range of networks with direct participation from the capitals. This
is why we have a governance structure – the Steering Board – consisting of
Ministers of Defence, but also meeting in the formation of Capability
Directors, R&T Directors and National Armaments Directors. This is why we
have projects and programme teams with the national experts at the table.
And it is the combination of political
top-level steering and bottom-up expert work that is the condition for success.
Without the political involvement commitments will be very difficult to get, in
particular when money is involved. Without the experts’ contributions the essential
building blocks would be missing for successful programmes. So, we need both.
Thirdly, seeking civil-military synergies
is an excellent objective, both for spending the scarce euro optimally but also
to increase civil-military interoperability.
But what we need is more concerted action
on the civilian side. This is not EDA’s responsibility, but of course it
becomes EDA business when we want to connect military and civilian CSDP
requirements for capability development.
The problem is that on the civilian CSDP
side there is no process to systematically develop capability requirements –
there are only ad hoc procurement solutions, as I stated before.
We will not be able to connect civilian and
military requirements for capability development in areas like communications,
intelligence and others, unless the civilian side will state the requirements
for civilian CSDP missions.
Fourth and last remark: one can only be
optimistic about the future of European defence cooperation. There is simply no
other choice that to do more together, to spend less money more smartly
together and to create bigger economies of scale.
Europe will only be able to play its role
in the world, spreading the Union’s principles of freedom, democracy, human
rights and many others as defined in the European Security Strategy when it has
all the tools as its disposal.
Without adequate military capabilities –
one tool amongst others but an essential one – Europe will not succeed in
fulfilling its role.
