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The Cost of Non-Europe in Common Security and Defence Policy

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The Cost of Non-Europe in Common Security and Defence Policy The Cost of Non-Europe in Common Security and Defence Policy STUDY Author: Blanca Ballester European Added Value Unit European Parliamentary Research Service European Parliament PE 494.466 Cost of Non-Europe Report CoNE 4/2013 European Common Security and Defence Policy PE 494.466 1 CoNE 4/2013 Cost of Non-Europe Report AUTHOR Blanca Ballester, European Added Value Unit ABOUT THE PUBLISHER This paper has been drawn up by the European Added Value Unit of the Directorate for Impact Assessment and European Added Value, within the Directorate–General for Parliamentary Research Services (DG EPRS) of the Secretariat of the European Parliament. To contact the Unit, please e-mail [email protected] LANGUAGE VERSIONS Original: EN This document is available on the Internet at: http://www.europarl.europa.eu/committees/en/studies.html Manuscript completed in December, 2013. Brussels © European Union, 2013. DISCLAIMER The opinions expressed in this document are the sole responsibility of the author(s) and do not necessarily represent the official position of the European Parliament. Reproduction and translation for non-commercial purposes are authorized provided the source is acknowledged and the publisher is given prior notice. ISBN: 978-92-823-4597-9 DOI: 10.2861/28157 CAT: BA-31-13-270-EN-N PE 494.466 2 CoNE 4/2013 European Common Security and Defence Policy This Cost of Non-Europe Report has been drafted by the European Added Value Unit of the Directorate for Impact Assessment and European Added Value, within the Directorate-General for Parliamentary Research Services (DG EPRS), at the request of the Secretary General of the European Parliament. Abstract This ‘Cost of Non-Europe Report’ is one of a series of papers produced by the European Added Value Unit which explore the potential efficiency gains that could be achieved by more effective and coordinated common action at European level in specific policy sectors. Other reports already published look at the situation in respect of the interaction of EU and national development policies, common energy policy, and aspects of the single European market. This report considers in detail the current situation in the field of EU Common Security and Defence Policy (CSDP), introduced by the 2001 Nice Treaty and later strengthened by the 2007 Lisbon Treaty. The text was prepared in the run-up to the December 2013 European Council meeting, which was partly devoted to this issue. The report identifies significant efficiency losses and potential economies of scale still to be realised in the CFSP field, notably as a result of way that national military structures and defence purchasing in Europe currently lead to unnecessary duplication and/or a lack of interoperability of capabilities in certain respects. The report cautiously estimates the cost of non-Europe in this area to be some 26 billion euro a year. PE 494.466 3 CoNE 4/2013 Cost of Non-Europe Report Abbreviations ASD AeroSpace and Defence Industries Association of Europe CFSP EU Common Foreign Security Policy CSDP EU Common Security and Defence Policy BG Battle group EADS European Aeronautic Defence and Space Company EDA European Defence Agency EDTIB European Defence Technology Industrial Base EUROFOR European Rapid Operational Force JDAM Joint Direct Attack Munition NATO North Atlantic Treaty Organisation NORDEFCO Nordic Defence Cooperation Organisation OHQ Operational Headquarters PSC Permanent Structured Cooperation R&D Research & Development R&T Research & Technology SEEBRIG South-Eastern Europe Brigade SME Small and Medium-sized Enterprise TEU Treaty establishing the European Union UKNLAF UK Netherlands Amphibious Force UN United Nations PE 494.466 4 CoNE 4/2013 European Common Security and Defence Policy Contents List of figures...............................................................................................................6 List of boxes.................................................................................................................6 Executive summary.....................................................................................................7 Introduction.................................................................................................................9 I. Increasing the effectiveness, visibility and impact of the CSDP ....................10 1. Political and strategic context .......................................................................10 2. Budget.............................................................................................................11 3. Resource efficiency ........................................................................................16 II. Enhancing the development of defence capabilities.......................................20 1. Integration of military structures .................................................................20 2. Funding of missions ......................................................................................25 3. ‘Pooling and sharing’ and ‘Smart Defence’ .................................................29 4. Integration of units ........................................................................................33 5. Regional cooperation.....................................................................................34 6. Cooperation with NATO ..............................................................................36 7. Cooperation with the UN..............................................................................39 8. Options for the future....................................................................................41 Capacity building.............................................................................................41 Future Funding of CSDP Operations...............................................................41 Future development of the EDA .......................................................................43 III. Strengthening Europe's defence industry .......................................................45 1. Industries and markets..................................................................................46 2. Inefficiency of defence markets ....................................................................49 Acquisitions on national markets......................................................................50 Defence Procurement........................................................................................51 Offsets..............................................................................................................57 Barriers to the transfer of defence goods ............................................................58 Duplication in development, production and purchasing ..................................60 3. Improving defence markets..........................................................................62 Supporting SMEs.............................................................................................62 Collaborative industrial projects .......................................................................65 Single European Sky ........................................................................................66 Research...........................................................................................................68 Peace activities and conflict resolution ..................................................................70 Unleashing the potential of the Lisbon Treaty .....................................................72 Assessing the cost of non-Europe ...........................................................................74 Conclusion .................................................................................................................82 References..................................................................................................................84 PE 494.466 5 CoNE 4/2013 Cost of Non-Europe Report List of tables Table 1: Funding of costs through Athena ........................................................................... 28 Table 2: Aerospace and Defence Industries: Key characteristics (2011) ............................. 46 Table 3: Sales in billion €, per sector ..................................................................................... 47 Table 4: Aerospace industry global overview – major markets (2011)............................... 47 Table 5: Values of contracts in million Euro under Directive 2009/81............................... 54 Table 7: Cost of aeronautical military equipment................................................................ 61 Table 8: Turnover (€m) by size of enterprise: Weapons and ammunition industry, 2006.... 63 Table 9: SMEs’ estimated share of EU production of defence equipment, based on Trade Association membership............................................................................................. 64 Table 10: Macroeconomic expenditure comparison EU-US (in €) ...................................... 76 List of figures Figure 1: Defence expenditure as % of GDP......................................................................... 12 Figure 2: Defence expenditure as % of GDP and as % of Overall Government Expenditure (2012)................................................................................................................. 13 Figure 3: Total defence expenditure...................................................................................... 14 Figure 4: Defence
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