Résidence Palace Brussels 18 July 2003

Address by Ernst A. van Hoek at the Conference On Transatlantic Defence Industrial Cooperation Challenges and Prospects Some time from now, historians will probably study the question if the process of European co-operation and integration would have started at all, without the transatlantic co-operation that has dominated the international world order in the last half of the 20th century. Clearly, in the aftermath of World-war II, the creation of NATO, the start of European co-operation in the field of coal and steel and the personal commitment of visionary leaders like General de Gaulle, Chancellor Adenauer and of course Robert Schuman have changed the course of European history for the better. Descending from these political giants to the mundane matter of armaments co-operation is a big step down. I will try to give some considerations to the challenges and the prospects of this armaments co-operation, in particular from the perspective of a European, and more in particular even, from the perspective of the WEAG view. I will end with coming back to these transatlantic aspects. Starting with a little bit of a history: what is the history of armament co-operation in NATO and in Europe. At a colloquy that was held in February this year in Paris a first attempt was made to gain an oversight and analysis of the last 50 years of such co-operation. Even if we all in general agree that armaments co-operation is a good thing to do, such feelings, if not underpinned by analysis and by larger strategic aims, become hollow. The real benefits in economic or military terms have only marginally been analysed. Many of the co-operative armaments projects that we know have been undertaken on bi- and tri-lateral basis. Large projects / programmes of successful co-operation are indeed very limited: in NATO AWACS could be cited as a good example. Hawk (Air Defence) is another, but limited to some eight nations. I will not dwell on the successes of NATO frigate programmes, and I am sure you can put others in the same category. Recent programmes that could be mentioned are the NH-90 and the A400M; the latter still has to prove its success. It is interesting to note that both NH-90 and A400M have their roots in the IEPG/WEAG co-operation. One could speculate that co-operation in the field of armaments is successful as long as it stays in the pre-competitive domain. The moment industrial interests, regional interests get involved the co-operation often gets hampered and stagnates. In Europe co-operation between nations has been stimulated first in the IEPG and later in WEAG. The success ratio is rather limited. The problem of getting larger co-operation structures operational has led to smaller groupings of nations co-operating together in more limited scenarios: OCCAR and LOI are examples thereof. The question can be posed: has armaments co-operation under a forum such as WEAG any future? The answer to such a question by necessity is a varied one: it depends on how the participants in the relevant forum, WEAG in this case, see the future. What are the ambitions of the nations involved, what are the political and economical boundary conditions. In the coming couple of minutes I will try to give you some background on this, and I will develop at least my view on this. WEAG has a relatively short history. WEAG started in the early nineties as a successor to the IEPG (Independent European Programme Group), which was a forum where the European members of NATO would seek to enhance their co-operation in the field of armaments, with the aim to strengthen the European pillar under NATO. With the creation of WEAG the NATO roots were a little bit lost and the own European identity emphasised. A weakness of WEAG has always been that armament and armament co-operation does not exist in its own right, but that it has a function in a larger operational picture. The operational element, planning, training, mission management, has never been part of WEAG. The speculation that the WEU, of which WEAG became a part, could remedy this missing element was ended when the WEU functions were transferred to the European Union. This transfer left WEAG on its own, as a leftover in a skeletal WEU. If armaments co-operation in its own right has only at the best a limited meaning, we can still agree that at least the development of a European Defence Technological and Industrial Base seems to make sense, in line with the original IEPG / WEAG goals. A problem for the WEAG members is however that industrial policy is not their bailiwick; industrial policy is part of the EU first pillar, a matter for the European Commission, which had little or nothing to do with defence. Also, the European Union article 296 gives individual nations the right to keep defence industrial and market issues away from the Commission, and continues treating those on a national basis. Only in the last year these matters seem to change, and change fundamentally. This change has become apparent in a number of ways. As Nicole Gnesotto from the ISS, the previous WEU studies institute, mentions in the preface of the 59th Chaillot paper: Europe has started to fill the gap between the high road of intergovernmental co-operation for crisis management and the low road of market logic as a result of industrial restructuring. The chasm is characterised as the absence of a common European Armament policy. Attempts to fill that chasm have been undertaken by those governments that are most concerned to preserve a truly competitive European defence industry: the creation of OCCAR and the LOI initiative demonstrate this. It seems that now, with the acknowledgement that an ESDP is not only a possibility, but also an absolute requirement, the tables have been turned in a way that is irreversible. In his address to the Heads of States and Governments, titled: “A Secure Europe in a better World”, EU High Representative Solana has outlined a number of principles on which not only the CFSP but also the ESDP can be further developed. Time does not allow me to go deeply into that address, but let me in any case raise some of the points that are made in it. Security is not merely a matter for defence. Security can only be approached through a coherent process in which many instruments play a role; amongst those are defence capability as well as development of third countries, trade and the environment. This greater coherence is needed not only among EU instruments but should also embrace external activities of individual member states. For defence matters the address concludes that there is much duplication of defence assets across the European Union. Systematic use of pooled and shared assets would reduce overheads and, in the medium term, increase capabilities. Another aspect of this irreversible change is the decision to create a “European Capabilities Development, Research, Acquisition- and Armaments Agency”. For the rest of this text I will just indicate it as the “EU Capability Agency”. The creation of a European Armament Agency has been on the agenda of the WEAG since its beginning. For a variety of reasons this goal was not achieved, instead, as I indicated earlier, a more limited mechanism such as OCCAR was created. Perhaps, with the increased understanding that we have of the interrelations between armament, planning, training and so on, it is a good thing that we don’t have the impediment of an existing EAA while we want to construct the wider EU Capability Agency. That such a Capability Agency will be created is practical already a certainty, the intent to create it appears in the Convention as well in the declaration of Heads of States and Governments made in Thessaloniki. It is now high on the agenda of the Italian EU Presidency. As usual with these matters however, the devil will be in the detail, in the modalities, mandate and organisation of such an Agency. One thing is however also clear from a number of documents and statements: We have learned, at least to some extent, not to duplicate for a change. It is generally agreed that existing building blocks will be (re-)used for this new Agency. OCCAR, LOI and, most important from my perspective, WEAG will provide such existing building blocks. It is important that the Agency gets a flying start, it is important that we try to achieve that. Reason is that, as many have concluded, it is time that Europe gets its act together, and as is stated in many reports (i.a. the final CSIS report), the capability gap with the United States could become unbridgeable. Therefore, if we make building blocks available, they should fit as “plug and play” units. Preparing “Plug and Play Modules” has therefore become an important item on the agenda for the Netherlands Chairmanship of the WEAG during the years 2003 and 2004. What are the building blocks that WEAG can offer? The WEAG consists mainly of NADs, and under the NADs level three Panels: Panel I for Co-operative Equipment Programmes, Panel II for Co-operative R&T and Panel III for Procedures and Economic matters. There is general agreement that one of the most important assets is in the field of R&T. Panel II, which started in the beginning as a forum of WEAG R&T directors, has set up the EUCLID Programme. Modest in size, modest that is compared to national R&T expenditures and EU FP funds, it is still a unique mechanism, which has involved all the WEAG nations. In the 10 years that it has been running, a total turnover of more than 600 M € has been realised. While most NATO R&T work is in the realm of information exchange and network building, the EUCLID programme, up and above the network function has contract R&T as a product. Industry has from the beginning been part of this process and had a say in the programme structure. Early attempts to make R&T planning a matter for Panel II has not yet had the success that was envisioned. With the start up of the new EUROPA MoU however, with the element of transparency as one of its guiding principles, countries have pledged to make their plans on co-operative efforts available in the form of a R&T database. It is very significant that the major players in the R&T field, the six LOI countries, have agreed not to set up a separate tool for the six of them, but instead to use the tools that are available in this EUROPA MoU. When, in a year or so, this data base will be filled, the WEAG nations will have a powerful tool available for harmonizing their planning in Defence R&T. For the new Agency this will be major asset. Clearly, the discrepancy in membership between WEAG and the EU will have to be accommodated, that is, rights of in particular Turkey and Norway will have to acknowledged, and their access to technology in the creation of which they contribute, be guaranteed. Less visible as a worthwhile building block, but certainly one that should not be underestimated, is the Test-Facilities work. As Ministries of Defence had traditionally a large number of test facilities and proving grounds at their disposal, some 7 years ago Panel II decided to inventory all the test facilities and test installations that were used for Defence purposes. A catalogue was made and rules for mutual use of these facilities have been drawn up. With the rationalisation in the WEAG countries of infrastructure projects, the need to view such facilities on a Europe wide scale is evident. At the same time we see that technologies and the testing thereof is becoming more and more of a dual use nature. In the year 2000 an interesting MoU on testing of mine detection equipment was concluded, involving a number of WEAG nations, but also Canada and the United States and as a first: the European Union. This MoU, the ITEP MoU, has brought capabilities in this field, that have been around for years, and which are part of the European Union Joint Research Centres in the picture. It seems to me that, when we consider building blocks for the future Capability Agency, that not only the WEAG Test Facilities expertise should be made available, but we should also make an inventory of what is available in these Joint Research Centres that wouls support the Capability developments. Clearly, this would create large opportunities for synergy. This would also fit in initiatives that have recently been taken by the European Union, to start a preparatory action for a security research programme of the Union. A preparatory working party for setting this process in motion will meet next week. It is particular encouraging, and in line with the policy of providing building blocks, that WEAG participates in this. I see this as an acknowledgement that, even if the financial volume of our WEAG research is modest, that it has value to offer. Is R&T the only plug and play module that WEAG can make available? Although we have not finalised our inventory yet, it seems that there are other elements as well. Since many years now, Panel I has worked on the harmonisation of requirements and on setting up mechanisms for planning replacements: ERS (Equipment Replacement Schedule) and ERM (Equipment Replacement Meeting). Even if the last couple of meetings of Panel I did not generate spectacular results, we do have the system in place and we do have a suitable database. This database could be made available to NATO for similar purposes. I mentioned earlier the programmes NH-90, A-400M, I can add UAV’s and other systems to the list, they all had their origins in precisely this Panel I mechanism. So, even if the current content is perhaps modest, the mechanism is worthwhile, and could be another plug and play module. In our last Panel, Panel III, we can also identify such plug and play modules. To a large extent, the institutional matters dealing with the setting up of agencies and organisations, have their roots in this Panel III. The Panel has contributed to standardization efforts, complementary to NATO efforts, and linking it to civil European activities such as CEMS. If crossing borders in Europe in the civil field has become the most natural thing, you sometimes hardly recognise these borders, for military equipment this is not so easy. Panel III has given guidance to solving these matters, and also that is an element that could be given over just like that. In all cases, worthwhile networks have been formed, sometimes very similar to the existing NATO networks, sometimes complementary and occasionally just worthwhile in their own right. Destroying networks is easy, building them anew may take years. Also here, therefore, we think that WEAG has value to offer to these new European initiatives. Lastly, some words about the European capability that we are helping to build. Referring back to the address by Mr Solana, the European Capabilities don’t have to be a mirror image of the American Capabilities. Even if our ultimate goals in security are largely the same, our political ambition is somewhat different, as is the infrastructure underlying our respective societies. Still, following the agenda that is being developed this and the coming year, we believe that Europe can play the role that it should play and carry the corresponding responsibilities. Constructing the European Capability Agency goes in the right direction. We should not fall in the trap however to copy American approaches blindly. Thus, at both sides of the Atlantic Ocean, we should acknowledge that building fortresses is not the right way, and historically speaking, has never done any good (if fortresses were not conquered, they were taken by betrayal, or they simply collapsed from corruption at the inside). On the contrary, we should perhaps look at ways in which the European Union and the United States could complement each other, without blindly copying each other structures and mechanisms. As Solana has said: “No single country is able to tackle today’s complex problems entirely on its own”. And also: “Acting together, the European Union and the United States can be a formidable force for good in the world”. The WEAG, by making its assets available to the future European Capability house is willing and able to contribute to this. Thank you.