28th Mar 2017

EU moves closer to common arms market

  • The European arms industry is not competitive enough, experts say (Photo: NATO)

The European Union came closer to a common market for its arms industry on Saturday (1 July) when a new code of conduct came into force aimed at opening up member states' arms industries to cross-border competition.

"For the first time ever, European countries have committed to procure defence equipment from each other if the offer is the best available, instead of automatically contracting with a national supplier," said EU foreign affairs and security chief Javier Solana in a statement.

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"There is a common realisation that none of us can any longer afford to go it alone in the business of defence," Mr Solana added.

Out of the 25-member bloc, 22 countries signed the voluntary code of conduct which obliges participants to publish tenders for planned defence equipment contracts on an internet site - run by the European Defence Agency (EDA) - and with European companies allowed to compete for most types of contracts over €1 million.

Three countries did not sign for different reasons - Denmark because it has a permanent opt-out on security and defence matters while Hungary and Spain said they might join later.

The union's total defence spending is around €180 million a year - excluding non-EDA member Denmark.

The European arms industry has so far been protected from regular EU legislation for the bloc's internal market, as the area has been considered a crucial matter of national security - something EU countries have traditionally guarded well.

Article 296 of the current EU treaty excludes war material from competition rules, while the draft EU constitution proposes a common weapons market and procurement agency, including common rules for sale of all weapons and military equipment.

But despite the constitution having been put on ice, governments have started to cautiously open up their defence markets due to falling defence budgets and the pressures of the single market, which allows the free movement of goods across national borders.

Brussels hopes that letting companies compete across national borders within the bloc will make the European arms industry more competitive on the international market.

Head of the EDA agency Nick Witney said in a statement that "the agency will do everything it can to support the member states in this bold but essential new initiative."

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