United Press International,
BRUSSELS: European Union defense ministers will take a small but significant step Monday towards opening up the bloc's notoriously closed defense industry market by agreeing to a voluntary code of conduct on equipment procurement.
European nations spend over $35 billion a year purchasing new defense goods, but there is very little cross-border competition or tendering for contracts because the EU treaty exempts the armaments industry from normal single market rules.
Until now, defense ministries have jealously guarded their right to hand lucrative contracts to national industries without having to justify their decision or open the tender up to normal procurement practices. But the pressures of the EU single market, which allows for the free flow of goods across national borders, coupled with dwindling defense budgets and a desire to pool more military capabilities at the European level, have forced ministers to tentatively open up their markets.
On Monday, at a meeting of the European Defense Agency's steering board in Brussels, all EU defense ministers with the exception of Denmark are expected to sign a code of conduct which will commit them to open up their arms industry markets to competition unless they declare that it is in their vital national interests not to do so.
“This will be a landmark decision,” European Defense Agency Chief Executive Nick Witney told journalists Friday. “The desire to inject competition into this hitherto protected market has been something that has been recognized as hugely beneficial for decades, but we haven't found a way to do it.”
Under the code of conduct, which would come into effect in July, EU member states would be obliged to post new tenders on an Internet notice board. European arms companies would then be free to compete for the contract.
To Read Full Article Click Here
