EU seeks to boost Europe's defense industry

The European Commission unveiled on Wednesday a series of proposals aimed at boosting Europe's defense industry which has hindered by shrinking military budgets and persisting fragmentation. The defense and security sector is a major industrial cluster in Europe directly employing 400,000 people and indirectly generating another 960,000 jobs in Europe, with a turnover of 96 billion euros (about 126.7 billion U.S. dollars) in 2012, according to the Euopean Union (EU). However, from 2001 to 2010, EU defense spending declined from 251 billion euros to 194 billion euros, largely as a result of the financial crisis. The problem of falling defense budgets is worsened by the fragmentation of European markets, with over 80 percent of investment in defense equipment being spent nationally. "Maintaining and developing defense capabilities to meet current and future challenges in spite of severe budget constraints will only be possible if far-reaching political and structural reforms are made. The time has come to take ambitious action," the European Commission, the EU's executive body said in the 17-page paper. The paper set out proposals to further deepening internal defense market; to strengthen the competitiveness of Europe's technological and industrial base; to exploit synergies between civil and defense sector in research area. The commission said it would monitor the openness of member states' defense markets and regularly assess how the new procurement rules were applied. It also promised to crack down on discriminatory practices and distortions affecting the defense market in Europe. In addition, the commission said it would study what capabilities with both a military and a civilian use were needed for EU security and defense policies. "On the basis of this assessment, it will come up with a proposal for which capability needs, if any, could best be fulfilled by assets directly purchased, owned and operated by the (European) Union," the paper said. The paper is set to be discussed at the EU summit in December that is dedicated to defense issues. Aferwards the commission will work on a detailed roadmap with concrete actions and timelines. (1 euro = 1.32 U.S. dolllars)