A NEW DEAL FOR EUROPEAN DEFENCE

1. A NEW DEAL FOR EUROPEAN DEFENCE Towards a more competitive and efficient European defence and security sector DG Enterprise and Industry Defence, Aeronautics and Maritime Industries

2. Context Future of Europe's defence industry European Council in December 2013

3. Challenges for Europe's defence industry •  Market Fragmentation and Contraction •  Lack of new programmes •  Industrial Overcapacity and Duplication •  Falling R&D investment

4. EDA Data 2011

5. Source: CEPS Policy Brief No 297, July 2013

6. Source: RAND Europe analysis of HIS Jane's data

7. Security challenges  Identified deficiencies in CSDP capabilities  New security threats  Need for Europe to assume greater responsibilities in Security & Defence

8. AREAS OF ACTION

9. Deepen the Internal Market for Defence & Security  Defence Procurement Directive 2009/81  Persisting distortions and • discriminatory practices  State aids  Security of supply important • for defence and supply chains  Intra EU Transfer directive 2009/43 facilitating • transfer of defence products in the internal market

10. Deepen the Internal Market for Defence & Security Actions  Ensure market efficiency: market monitoring & guidance for correct application  Tackle Market Distortions: offsets phasing out & state aid monitoring  Mutual assurance for supply between MS  Optimisation of transfer regime  Green Paper on defence industrial capabilities

11. Strengthen the competitiveness of the EDTIB  Standardisation/ Certification  Raw Materials  SMEs: COSME, EEN, regional strategy  Skills: Sector Skills Alliances, ESF

12. Standardization Use of national defence standards:  Hinders co-operation and interoperability  Increases cost for the industry Actions  Promote Hybrid standards for dual use  Explore the establishment of mechanism to draft European military standards

13. Certification Certification cost  50% more development time  20% increase in development cost Action Explore options for involving EASA in certifying airworthiness of military aircrafts

14. Raw Materials Raw materials  Indispensable in many defence applications  Critical for competitiveness of the industry  Supply risks Actions  Screening of raw materials  Targeted actions if necessary

15. SMEs  Difficulties in accessing markets in other MS and third countries, R&D, financing Actions  European Strategic Cluster Partnership  COSME, EIF, Structural Funds for dual use  Entrerprise Europe Network  Defence industrial integration into regional smart specialisation strategies

16. Skills  Impact of restructuring  Securing critical skills and competencies Actions  Promote skills through Sector Skills and Knowledge Alliances  Retraining by ESF/EGAF  Structural and Investment Funds to help regions affected by restructuring

17. Exploit civilian/military synergies •  Research: Pre-Commercial Procurement, Preparatory Action for CSDP related Research •  Dual use capabilities •  Space: SST, SATCOM/MILSATCOM, High Resolution •  Energy: Energy Efficiency, Renewable Energy and Alternative Fuels, Energy Infrastructure

18. Research Technologies dual in nature  Security theme of FP7, KETs Synergies and spill-over effect Actions Pre-commercial procurement of dual use prototypes  Preparatory action on CSDP related research

19. Dual Use Capabilities Actions  Interoperability of information service sharing between civilian and defence users  Establishment of civil-military cooperation group  EU-owned/leased dual-use capabilities

20. Space  Space technologies and infrastructures by nature are dual use (high costs of separation) Actions  Space Surveillance and Tracking system  Act to overcome fragmentation in security SATCOM, next generation MILSATCOM  Imaging capabilities for CSFP/CSDP, next generation of high resolution imaging

21. Energy  Armed Forces are the biggest public consumers of energy in the EU  Largest public owner of free land  Dependence on fossil fuels  Security of energy supply  Strategic Energy Technology (SET) Plan

22. Energy Actions  Applicability of EU energy concepts to the defence sector  Comprehensive energy concept for armed forces  Guidebook on renewable energy and energy efficiency  Exchange information with SET-PLAN Steering Group  Guidance in implementation of 2012/27/EU  Support GO GREEN project and possible expansion

23. Strengthening the International Dimension  Mrestricted access to third markets  Offsets requirements imply loss of technological advantage  Dual-use export control policy Actions  Mitigate offsets requirements  Promote European companies  Dual Use export control review

24. The Way ahead •  Integrated approach across the civ-mil dividing line •  Consultation Mechanism with national authorities •  Roadmap: actions and timelines

25. Thank you for your attention!