DOCUMENT 786 31st October 1978 ASSEMBLY OF WESTERN EUROPEAN UNION TWENTY-FOURTH ORDINARY SESSION (Second Part) A European armaments policy REPORT submitted on behalf of the Committee on Defence Questions and Armaments by Mr. Critchley, Rapporteur ASSEMBLY OF WESTERN EUROPEAN UNION 43, avenue du Prllsldent Wilson, 75n5 Paris Cedex 16 - Till. 723.54.32 Document 786 31st October 1978 A European armaments policy REPORT 1 submitted on behalf of the Committee on Defence Questions and Armaments 2 by Mr. Critchley, Rapporteur TABLE OF CONTENTS DRAFT RECOMMENDATION on a European armaments policy EXPLANATORY MEMORANDUM submitted by Mr. Critchley, Rapporteur I. Introduction II. The problems III. The approach tfr solutions IV. The international organisations A. The rOle of NATO B. The independent European programme group C. The role of WEU D. The Panavia Tornado - A case study in collaborative procurement V. The view from national capitals A. Belgium B. France C. Federal Republic of Germany D. Italy VI. Conclusions VII. Opinion of the minority APPENDICES : I. The ten action areas under the NATO long-term defence programme on which task forces have been established II. Structure of IEPG III. Future equipment programmes IV. Joint production - Collaborative projects as a proportion of national defence equipment procurement V. Procurement, research and development, and research as a percentage of defence budget 1. Adopted in Co=ittee by 7 votes to 6 with 3 Handlos, Hardy, Konen, de Koster, Lemmrich, Maggioni, abstentions. Menard, Pawelczyk (Alternate : Buchner), Pecchioli, Peronnet, Hermann Schmidt (Alternate: Vohrer), Schol­ 2. Members of the Committee : Mr. Roper (Chairman); ten, Tanghe, Whitehead (Alternate: Banks). MM. Bonnel, Roberti (Vice-Chairmen) ; MM. Ahrens, Baumel, Bechter (Alternate: Bozzi), van den Bergh, N.B. The names of those taking part in the vote are Boldrini, Boucheny, Critchley, Dejardin, Fosson, Grant, printed in italics. 1 DOCUMENT 786 Draft Recommendation on a European armaments policy The Assembly, Aware that the growing cost of modern armaments technology and current economic trends can lead to unilateral disarmament through inflation in the countries of the Alliance ; Stressing the need for the joint production of armaments in order to provide interoperability and standardisation of military equipment ; to ensure the survival of a viable European armaments industry ; and lastly a. two-way street in armaments with the United States; Considering that limited but as yet too slow progress in these directions is now being made in the independent European programme group, in the NATO Conference of National Armaments Directors, and Military Agency for Standardisation, in all of which all WEU countries participate ; Believing that only if the European armaments industry as a whole is restructured on a viable and competitive commercial and industrial basis will adequate progress be made ; Welcoming the stuay of the European armaments industry being undertaken by the Standing Armaments Committee, RECOMMENDS THAT THE CouNCIL I. Urge that efforts to achieve joint production, interoperability and the standardisation of defence equipment in the European countries of the Alliance be concentrated in the independent European programme group ; 2. Call for the restructuring of the European armaments industry under the aegis of the European Community, relying on its responsibility in the fields of industrial and customs policy and research ; 3. Ensure that once the present study of the European armaments industry is completed, full use be made of the resources of the Standing Armaments Committee to assist in the foregoing tasks ; 4. Request the governments concerned to arrange for the IEPG to submit an annual report on its activities to the Assembly. 2 DOCUMENT 786 Explanatory Memorandum (submitted by Mr. Critchley, Rapporteur) I. Introduction already signed between Messerschmitt-Bolkow­ Blohm and McDonnell Douglas in September 1. There are two vital objectives of the North 1977, with a view to the development of a new Atlantic Alliance which are subject to chronic fighter aircraft. The result of such transcon­ delays, if not frustration, for lack of effecti>:e tinental collaboration would be the disappearance unity between its European members. One IS of the independent European firms from the the standardisation and interoperability of arms market. The threat that faces the European equipment, the other is the establishment of a aircraft industry can best be understood when two-way street between Europe and North Amer­ we look at the difference between American and ica whieh is needed not only to provide a more European civil and military aircraft manu­ cos't-effective use of resources and increased facturers. There are nineteen eompanies within standardisation of weapons systems but also for the European Community as compared to only the psychological and political purpose of creat­ eight in the United States. The nineteen com­ ing a better balance in the Alliance between the panies have to share a substantially lower United States and its European allies. These turnover of 7.4 billion units of account in the frustrations and delays are a great impediment Community, as against 17.6 billion in the United to the build-up of the defensive strength of the States. This can only mean that both military Alliance, which the ever-growing weight of the and civil aircraft industries in Europe are badly Warsaw. Pact's offensive capability has made planned from the point of view of competition ; necessary. their research and development activities overlap thus reducing effectiveness ; costs are dispropor­ tionately high, while the benefits of economy of U. The problems scale cannot be exploited. The result is that both the civil and military aircraft industries are 2. It is, of course, an essential feature of threatened unless military ·procurement policy the Atlantic Alliance that it is an association is used to promote increased collaboration across of independent, democratic states, within which national frontiers. are divergent trends of public opinion, in con­ 5. Apart from the danger of American trast to the political conformity to the l\farxist dominance of the European armaments indus­ ideology and the control of the CPSU, the Com­ tries, one of the greatest threats that faces the munist Party of the Soviet Union (commonly western Alliance is the danger of "disarmament called Russia in the West), which characterise through inflation". At a time of low economic the Warsaw Pact. The lack of political unity growth, governments are reluctant to direct between the NATO countries is reflected in every further scarce resources to defence even though sphere of activity, diplomatic, strategic and weapon costs are growing fast and even though financial ; and it is an astounding tribute to the weapon effectiveness offers Alliance members validity of voluntary co-operation between free the best hope of counteracting the ever-increasing societies that NATO has held together as well offensive capability of the Warsaw Pact forces. as it has for nearly thirty years. But it is in Greater efficiency in weapon supply and a the field of arms procurement and manufacture, rationalisation of the equipment procurement with the rapidly rising costs of weapons, that process are therefore of paramount importance the lack of an jntegrated European programme for western security. As Elliott R. Goodman has is most marked and its disadvantages most written : " ... some observers look hopefully to a evident, both in regard to the Soviet bloc and new arms technology that promises to provide to the industrial and financial strength of the inexpensive but extremely effective weapons. United States. Their general adoption might make it possible 3. Indeed, if any real'progress is to be made for Europe to avoid being priced out of the weapons market, while also reducing the United along the two-way street in view of the constant 1 development and sales-drive of the great Amer­ States Defence Bill." ican armament corporations, then there is no 6. Mr. Goodman cites the increased accuracy time to lose. Given the time-scale in the design of precision-guided munitions and the example and production of weapons systems, decisions of their effectiveness in the Arab/Israeli war of will have to be taken by 1980 if new equipment October 1973 as evidence of the greater cost­ is to enter service by the nineties. effectiveness of future defensive short-range 4. If no progress is made towards rationalisa­ tion within Europe, large European arms or {. Elliott R. Goodman : "The puzzle of European aircraft manufacturers will enter into joint agree­ defence : the issue of arms procurement", Survey, ments with American companies, such as that su=er{autumn 1976, page 219. 3 DOCUMENT 786 battlefield weapon systems. However, he concedes research and development and longer production Richard Burt's argument that "both long-range runs. The European members of the Atlantic and all-weather precision-guided munitions now Alliance would without countervailing measures under development will cost far more than pre­ be even more likely to increase their dependence sent generation systems." 1 on the United States, thereby perpetuating the imbalance in the arms trade between Western Wasted money Europe and the United States. 7. .Another unhappy consequence of the Tke European defence equipment market separate national procurement and production of land, sea and air armaments, which tend to 10. The manufacture and procurement of air­ be increasingly sophisticated and costly, is the craft, though the most costly, is, of course, only duplication of expenditure on research. Thomas part of the whole operation of supplying the A. Callaghan, the "doyen" of writers on this manifold defence requirements of the European subject, estimates that in 1974 Europe spent Atlantic allies. They constitute (incLuding France) $2.5 billion on research and development, while a very substantial market, amounting to nearly the United States spent $7.6 billion. As the $40 billion in 1976, compared with the arms United States research and development pro­ expenditure of $77 billion of the United States.