EU to speed up defence market liberalisation

A public consultation has been launched with a view to moving up a gear on liberalisation of EU arms markets, the European commission announced on Monday.

Brussels has taken a new step towards opening up EU defence markets by announcing a public consultation aimed at defining a European approach to the armament industry.

“Opening the internal market for defence products would boost our economy and increase the competitiveness of the European defence-producing companies,” said commission vice-president Günter Verheugen.

One option could be to propose a new legal instrument “for lifting obstacles to trade within the EU thanks to the coordination of export rules concerning armaments”.

The EU arms industry is worth €70bn and accounts for 770000 jobs across Europe.

But the creation of a single market of defence equipment has been hampered by national red tape and administrative hurdles to trade.

Member states are traditionally reluctant to hand over any defence role to Europe.

And EU internal market exemptions have justified restrictive national measures to free movement on the ground of national security.

But the commission considers exemptions do not overlap on Brussels legislative power to enable the smooth functioning of the internal market.

“Defence sector is sensitive in member states but the case law of the European court of justice shows that the principle of free movement also applies to defence,” said a spokesman.

The European Defence Agency last November adopted a code of conduct designed to boost cross-border competition.

The commission believes that a free defence market will secure military supply within the EU and provide guarantees for the protection of national security.

Traceability and certification of defence-producing companies will be organised at EU level to ensure re-exports to third countries are regulated.

The commission aims to define guidelines for a general communication on the defence industry by the end of 2006.

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