[A-List] EU integration struggles: arms procurement

[Michael Keaney]

UK set to spurn plan for EU defence procurement
By Jean Eaglesham
Financial Times: December 9 2002

The UK will this week reject joint proposals by France and Germany for a
European Union defence-procurement agency, arguing instead for an
alternative that would develop and vet countries' defence capabilities.

The proposals, which the UK will champion at the European Convention on the
future of Europe, are part of British lobbying over the fledgling European
security and defence policy (ESDP).

Britain intends strongly to resist the ParisBerlin idea of Europe-wide
procurement. A defence-procurement agency would be controversial in the UK
because the opposition Conservative party would lambast the government for
ceding power over defence spending to Brussels. The UK also believes that a
fortress-Europe approach could damage Britain's defence industry.

The UK has a more open procurement policy than most European countries. If
switching to a Europe-wide agreement led to protectionism, the US might
retaliate by barring European companies from its defence contracts. This
would deprive the UK defence industry of one of its most important markets
and access to advanced technology.

The UK's idea is a recognition that the EU might fail in its attempts to
raise defence spending closer to that of the US. Only last week Germany
announced a series of defence cuts. Instead, the UK wants to focus efforts
on filling gaps in capability, such as the longstanding shortfall in airlift
capacity, and on vetting the quality of equipment.

"The agency is our 'Big Idea' - we want it to be seen as something that
would stimulate member states to improve their capabilities while ensuring
those improvements are robust and effective," a senior defence official
said.

"We need to focus on outputs, not inputs . . . Yes, we want to maximise the
amount of euros spent, but also to see every euro spent wisely." The
official added: "The capability agency wouldn't compromise British
procurement policy. We want the defence industry strengthened and more
competitive, but not at the price of cutting off from the US."

The agency would incorporate an independent audit function - a control on
spending used in the UK but not for Nato. "It gives confidence that when you
have a helicopter, the helicopter will fly," an official said.

Government insiders accept that this week's discussions are only the initial
stage in a long process.

However, attempts to complement the European Union's economic power with a
coherent defence arm - launched by Mr Blair and Jacques Chirac in St Malo in
1998 - have become mired in disagreement.

The goal of establishing a 60,000-strong European rapid reaction force is
looking optimistic. "Political will is required in some countries to meet
it," a government insider said.

Part of the solution rests with Turkey, which is seeking agreement at
Copenhagen on an accession date to join the EU. Without such a date, Ankara
will use its leverage as a longstanding Nato member to continue blocking the
"Berlin Plus" arrangement designed to give EU members access to Nato assets.

But progress on the ESDP also depends on bridging the strategic gulf between
Britain, and France and Germany. While the UK insists the ESDP must be
complementary to Nato, Paris and Berlin proposed last month that a "European
Union of Security and Defence" could provide collective security and be
independent of the transatlantic alliance.

The UK government insists that, for all the differences with France and
Germany, it remains committed to the ESDP. Insiders claim that the gap
between London and Paris can be bridged.