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Hellenic Republic Ministry of National Defence

Defence Minister Dimitris Avramopoulos’ speech at the European Commission conference on European Defence Industry

•    This conference follows the European Council Conclusions adopted on December 2013.

•    On the long term, the European vision should be heavily based on the strengthening and the implementation of a solid, coherent, viable and self-sustained Common Security and Defence Policy (CSDP) that will stand not as a redundant luxury but as a crucial necessity, imposed by the unpredicted volatility of the global geopolitical upheavals.   

•    To launch a new strategic era between policy and defence industry support.

•    Governments have realized that the last European Council was not the end of the “defence journey” but the beginning of a new European Defence future.

•    The directive 2009/81/EC has generated a growing concern among EU because it abolished the Domestic Industrial participation (EBS) and Offsets on which many small and medium-sized enterprises (SMEs) depended.

•    Measures should be taken to protect SMEs while big industries should be encouraged to award subcontracting work to SMEs.   

•    European countries should cover their needs mainly from the European internal market.

•    The Greek Presidency has set as one of its priorities the promotion of their role and their unimpeded access to the defence market.

•    Greece is firmly committed to work during its Presidency in line with the European Council’s conclusions in order to promote the EU’s autonomy in the field of Defence.


Text of the speech:


Mr. President, Mr. Vice President, Commissioners, Ladies and Gentlemen,

It is a great pleasure and honour for me to participate in such an important conference about the European Defence Industry.

Let me start by highlighting that this conference follows the European Council Conclusions adopted on December 2013. I consider that the Council’s deliverables are setting the general framework for implementing the Common Security and Defence Policy initiatives.

In today’s rapidly changing developments, our values and interests have been continuously challenged and we need to be able to respond to these challenges. Thus, I fully support President Barroso’s position that “We will not have the weight we need in the World without a common Defence Policy” and I will go even further by stressing out that on the long term European vision should be heavily based on the strengthening and the implementation of a solid, coherent, viable and self-sustained Common Security and Defence Policy (CSDP) that will stand not as a redundant luxury but as a crucial necessity, imposed by the unpredicted volatility of the global geopolitical upheavals.   

This means that when developing our Common Security and Defence Policy (CSDP), we have to foresee all the necessary actions needed in order to offer not only political support but also the institutional and legal basis to facilitate the parallel development of the defence industry sector, which will provide the tools for the interactive synergy between policy and supporting means.

This is exactly what we are doing here today. We are here to confirm the Council’s political support to the Defence Industry sector and to welcome new aspects, new ideas and new perceptions from the stakeholders. We also expect to receive the collective expertise of all participants and -if necessary- to ransform it to specific actions that have to be taken beyond.

Despite the current financial constraints, it is of my profound belief that we are standing in front of a great opportunity, stemming from our solid intention to work closely in order to develop a healthy and competitive defence industry sector. It is time to perceive the emerging changes and overcome any identified institutional or entrepreneurial malaises to schedule our further actions and to launch a new strategic era between policy and defence industry support.
   
 
Decreasing defence budgets and increasing international competition makes even clearer that member-states cannot afford to go alone. Heads of State and Government have realized that the last European Council was not the end of the “defence journey” but the beginning of a new European Defence future.
 

Of course, the economic crisis and the consequent cuts of the defence budgets exacerbated the situation. A crucial question is, therefore, how we will achieve the revitalization of the defence industry sector in an environment of financial constraints. I am fully convinced that the role of European Defence Agency is to this direction of great significance -and I have to praise for this Mrs Claude France Arnould for her inspired direction and management- setting the primary focus on programmes, certification and standardization and policy framework for cooperation.

Stronger capabilities for the European defence are of the utmost importance to all of us and Research & Technology is at the core of strengthening our capacity to respond to crises. Increased collaboration in Research & Technology prevents duplication of national investments and leads to economies of scale.

The directive 2009/81/EC introduces specific EU Legislation and the principles of the internal Market into national defence markets. This directive is today the regulatory backbone of a European Defence Equipment Market. Additionally, this same directive enhances EU-wide competition and fosters cooperation.

Nevertheless, this directive has generated a growing concern among EU because it abolished the Domestic Industrial participation (EBS) and Offsets on which many small and medium-sized enterprises (SMEs) depended. This constitutes a threat to the viability of small and medium-sized enterprises. It should be noted that the industrial base of smaller Member States is composed of such businesses.

Hence, the Small and Medium Enterprises’ (SMEs’s) technological shortfall derived from their inability to invest substantial funds in the field of research worsened significantly their efforts to compete the major manufacturers in both the European and international arenas.
Therefore, measures should be taken to protect SMEs while big industries should be encouraged to award subcontracting work to SMEs.   

The promotion of international synergies aiming to a niche market on a “win-win” base, the coverage of operational needs from the internal European productivity and the research and development through a totally innovative approach of creating products customized to the market needs, could be part of the answer to the aforementioned question.

The increased competitiveness that may not be based on benchmarking policies but on a strategy of differentiation, could also be an important factor for launching new holistic entrepreneurial strategies. These strategies could eliminate waste and optimize the usage of de-fragmented resources to all stages of production, prevent duplication of efforts while offering an optional main driver for optimal expectations. Industries should also ensure the security of the chain of supply based on an overall EU strategy for raw materials.

All these practices require the creation of a genuine internal market that will not only ensure, but also will promote and safeguard fair access to all EU companies avoiding exclusions and discriminatory practices. European countries should cover their needs mainly from the European internal market. Of course, we do have in mind that defence requirements were -and will be even more- demanding, since they deal with the sensitive issue of security, and nations prefer the best solutions to this end.

We must not leave aside the Small and Medium Enterprises which could be considered as the heart of EU defence innovation. The Greek Presidency has set as one of its priorities the promotion of their role and their unimpeded access to the defence market. Given that growing defence markets are situated mostly outside the EU borders, we should re-evaluate the efficiency of existing EU “tools” in order to ensure and further promote the outward looking SME’s policy.

Certainly, we must not underestimate that any imminent fluctuation on the defence industry sector will immediately be reflected on the great number of employees working in the defence industry sector.

In my opinion, we must combine ambition with realism when shaping the CSDP agenda for the forthcoming years. Now, it’s time for action and fast deliverables in order to maintain the momentum already gained.

I would like to send a message to all the participants: Greece is firmly committed to work during its Presidency in line with the European Council’s conclusions in order to promote the EU’s autonomy in the field of Defence.

The challenges of this Conference are significant and I am confident that you will achieve your objectives. I wish you productive discussions and successful results.