By Gemma Lougheed - 6th December 2005
The European Commission has presented a plan aimed at opening up the EU’s heavily protected €82 billion defence procurement market.
In a bid to make the EU’s defence procurement market more open and efficient, national governments will be forced to allow more competitive bidding for defence contracts.
So far, under EU law, procurement of military equipment is not subject to normal European competition rules.
Pending the outcome of an impact assessment on the proposals for future initiatives to improve cross-border competition, the commission will adopt an ‘Interpretative Communication’ to be adopted next year.
European Commissioner for Internal Market, Charlie McCreevy, indicated that a specific directive must be vigorously pursued.
“The response to the consultation is clear. Action to clarify and improve EU law on defence procurement is imperative,” said McCreevy.
“We must now put our foot on the gas. The future of Europe’s defence industry is at stake.”
“To deliver real benefits we are almost certainly going to have to go beyond a code of conduct and an interpretative communication."
This is a move Brussels strategy to create an EU defence equipment market and is seen as an important factor in the development of a European security and defence policy.
In line with the principle of ‘better regulation’, any proposed directive will be accompanied by an impact assessment which will assess its possible costs and benefits.
The EU's total defence budget currently stands at €180 billion per year.
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