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European Defence: Bridging the capabilities gapWilliam Bach aa Undersecretary of State and Minister for Defence Procurement , Ministry of Defence ,Published online: 20 Mar 2008.
To cite this article: William Bach (2003) European Defence: Bridging the capabilities gap, The RUSI Journal, 148:6, 16-18,DOI: 10.1080/03071840308446940
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European DefenceBridging the Capabilities GapWilliam Bach
Lord Bach is Undersecretary of Stateand Minister for Defence Procurement,
Ministry of Defence. This article isbased on his address to RUSI's
'European Defence Procurement:Bridging the Capabilities Cap'
conference on 13 October 2003
It has become something of a cliche thatwe whose business is the defence of therealm face some very difficult and oftenbewildering challenges. This has beentrue, of course, since the old certaintiesof the Cold War passed into the domainof the historian. But what was previouslyperhaps implicit has been forced intostark relief by the events of the past twoyears. The international strategicsituation has changed beyond allrecognition. We are now presented withnew asymmetric threats that require amore flexible and agile response.
Industry, of course, plays a vital rolein ensuring that we have effective andflexible Armed Forces able to respond tothis new environment Just asgovernments must adapt, so mustindustry to the challenges, and indeedthe opportunities, provided by anincreasingly global marketplace.
NATO and EUIn the European context, we are alsowitnessing the seismic political changesresulting from the enlargement of NATOand the European Union. Both presentchallenges but must, in the end,strengthen both organizations. As theSecretary of State for Defence, GeoffHoon, made clear in his address to RUSIin June 2003, both NATO and the EU, intheir differing but mutually supportivecontributions to our security, willcontinue to play key roles in ourstrategic planning.
Both organizations need, of course,to adapt to changing circumstances. Wehave already made a great deal of
' progress. We have set the way ahead forNATO and agreed the reform of itsstructures and set in placeimprovements in its military capabilities.We have also achieved major milestones
within the EU. In addition to the policemission in Bosnia, the first military crisismanagement operations under the EU'sEuropean Security and Defence Policy(ESDP) have been launched inMacedonia and the Democratic Republicof Congo. We also agreed earlier thisyear the arrangements, known as BerlinPlus, whereby the EU may call uponNATO's planning and other capabilities.We now have a strategic partnership incrisis management between the twoorganizations which is transparent,complementary and mutuallysupporting, both operationally and inthe force development process. This is areal achievement.
The EU, however, cannot rest on itslaurels. Above all, its Member Statesmust improve their military capabilities.We have made progress on the HeadlineGoal of Member States being able todeploy up to 50,000 to 60,000personnel within sixty days for at leastone year. The EU now has operationalcapability across the full range ofPetersberg Tasks, as the crisismanagement operations that the EUcan undertake are known. But this islimited by recognized shortfalls at thehigher end of the operational spectrum.
It is critical that Member States nowtake action to meet these shortfalls byspending more on defence, or byfocusing expenditure on capabilities thatenable the EU to deploy forces rapidly.The latter will entail some painfuldecisions. But it is essential
Role of ESDPESDP has achieved much over the lasttwelve months but we and our EUpartners must now look to take itforward in the Inter-GovernmentalConference on the new EU
RUSI JOURNAL DECEMBER 2003
Defence andInternational Security
We believe the ESDP should remain focused on conducting crisismanagement outside the EU's borders and not seek to undertakecommon defence. That is NATO's responsibility
constitutional treaty. We believe theESDP should remain focused onconducting crisis management outsidethe EU's borders and not seek toundertake common defence. That isNATO's responsibility.
The EU should, however, be moreflexible in the types of crisismanagement tasks it can undertake. Inparticular, we would like to see ESDPtaking a more proactive role in widerconflict prevention. That is not to saythat the EU should have its own forces.National military forces, declared underthe Headline Coal, are offered to the EUon a voluntary, case by case basis byMember States. There is no standing EUArmy or rapid reaction force, nor any EUagreement to create one.
European Defence AgencyWhile the provision of military forcesmust remain a national responsibility,there is a key linking role where a moreconcerted pan-EU approach to thedevelopment of capabilities is required.For years the EU has considered thecreation of an armaments agency. Ourvision is, however, of an agency that isfocused primarily on developingmilitary capabilities, a EuropeanDefence Agency. The Agency wouldimprove defence capabilities bypromoting harmonized and co-ordinated efforts across all areas thatcontribute to operational effectiveness,including training and support. Inconjunction with the EU MilitaryCommittee it would produce coherentplans for capability development. Itcould also monitor whether plannedcapability developments are beingdelivered and evaluate against agreedcriteria those capability commitmentsgiven by Member States.
We see the Agency being created in2004 and headed by a senior politicalfigure, in the view of the UK the EU HighRepresentative or his successor. It wouldbe placed directly under DefenceMinisters who, collectively, would provideoverarching direction. The Agency wouldalso have a wider acquisition role,specifically a commitment to encouragingcost-effective procurement primarilythrough OCCAR. It would also promotethe establishment of an internationallycompetitive defence equipment market Itwould do this by encouraging the EU-wide adoption of rules and proceduresadapted from those negotiated on theLetter of Intent Framework Agreement, towhich I shall return later. But it mustremain focused on capabilities and, byincreasing co-operation and improvingcoherence, enable Member States tomake better use of their defence budgets.
The UK's priorities in all of this aretwo fold: enhancing capabilities andimproving interoperability.
The UK is an active participant instriving to fill the capability gapsidentified in the Helsinki Headline GoalThis has resulted in the EuropeanCapability Action Plan, where a number ofpanels were formed to address thecapability shortfalls of the EU forcerequired to carry out the Petersburg Tasks.This work is now being taken forward byProject Groups. Not all are involved inacquisition and, where they are, the workof these groups may go far wider thanprocurement ECAP work has the longer-term aim of fulfilling the Headline Goalcapability gaps by one of three means:
'role specialisation', with a particularcapability requirement being met bymeans of the national programme ofone participant;
co-operative acquisition, with anumber of participants agreeing toprocure (through bilateral ormultilateral arrangements) anequipment developed by one nation;
collaborative programmes based onan agreed, harmonized, militaryrequirement. Such programmes maybe managed through theOrganization for Joint Cooperation inArmaments (OCCAR) - of whichmore later. Alternatively nationsengaged in a particular collaborativeprogramme may choose to managethe project under separatearrangements outside of OCCAR.
Within all three areas there are favourableprospects for enhancing Europeancapabilities and improving interoperability.
IndustryBut if we in Europe are really seriousabout enhancing our capabilities, theEuropean defence industry needs to play its part We want to see a strongEuropean defence industry. But thenationality of its owners is no longer thefundamental issue. We should focusrather on where the technology iscreated, where the jobs are created andsustained, where the skills and theintellectual property reside, and where theinvestment is made.The UK has benefitedby adopting this approach and we believethat there are significant benefits for bothEuropean nations and Europe's defenceindustry in doing the same. It is importantthat the UK and other nations can call ona strong healthy European defencetechnological and industrial base.
That said, the European defenceindustry must be viewed in a globalcontext and against the backdrop of a
/ accept that Industry has been very sceptical about the pace andachievements of the Letter of Intent (Lol) Framework. We fullyrecognize the need to continue to drive it forward and look forwardto the Lol being able to start to deliver some real benefits over thenext couple of years
more demanding defence market Withinthis global environment it is primarily forindustry to decide how to organize itselffor commercial success. Thus it is rightthat the process of industrialrestructuring and consolidation in Europehas been led by industry based on theircommercial judgements. The formationof BAE SYSTEMS, European AeronauticDefence and Space company (EADS),Thales and Agusta-Westland are recentsuccessful examples in this context
Consequently it is important thatthe European defence industry has aforward-looking strategy that placesincreased competitiveness andefficiency as the drivers behind theprocess of European industrialconsolidation.The UK has benefitedfrom this by securing significant inwardinvestment such as the purchase ofRACAL by Thales.
It is unlikely that we have seen thelast of these rationalizations and it wouldbe premature to draw firm conclusions.However, I shall address briefly the areawhere government can play a positiverole in this process, namely, by removingartificial barriers to co-operation. This is akey part of the Letter of Intent (Lol)Framework Agreement signed in July2000 by France, Germany, Italy, Spain,Sweden and the UK.
Lol Framework AgreementOur expectation is that this agreementwill help to remove unnecessary obstaclesto armament and industrial co-operationand improve the efficiency of defencecompanies, which operate in two, ormore, of the Lol countries.
The Lol will result in a number ofimprovements including: simplifiedprocedures for the transmission ofclassified information and visits; greater
RUSI JOURNAL DECEMBER 2003
security of supply; and simplification ofthe export licensing regime. It will alsoassist in the provision of access to a widertechnology base through more efficientarrangements for multilateral co-operation on R&T and the harmonizationof military requirements.
Focussing for a moment on this lastelement - the harmonization of militaryrequirements (HMR) - the main task isto identify potential co-operativeequipment opportunities at the earliestpossible stage. All six nations currentlyparticipating in the Lol process haveagreed to adopt a structuredmethodology. In essence, this consists ofthe construction of a capability-basedmaster database and the formation of asix-nation HMR Board comprised ofsenior national capability representatives.The Board will select potential co-operative opportunities from thedatabase. The initial Master database hasnow been populated and our staffs areworking to analyze the results to identifypotential co-operation opportunities.Initial scrutiny is encouraging and hasrevealed coincidence in requirementsthat had not been previously identified.
I accept that industry has been verysceptical about the pace andachievements of the Lol. We fullyrecognize the need to continue to driveit forward and look forward to the Lolbeing able to start to deliver some realbenefits over the next couple of years.
OCCAROf course, the Lol is only one frameworkthat we are using to work closely with ourEuropean partners. We continue to workclosely with our French, German, Italianand, most recently, our Belgian colleaguesin OCCAR. I am very pleased to see thepositive steps that this organization has
taken in terms of establishing principlesfor the effective management of co-operative programmes. I am particularlyimpressed by the agreement to dispensewith the form of Juste Retour, where eachnation expects a work-share rigidly basedon its cost-share in a programme,whether or not all have the industrialexpertise and capability needed toactually carry out the work.
Too often in the past we have seenJuste Retour resulting in inefficiencieswhere supply chains have beenreplicated in a number of countries.OCCAR's agreement of a system of'Global Balance', where work-share canbe spread over a number of programmesand over a number of years, is a realstep forward. But, for it to workeffectively, it will require governmentsto adhere, in practical terms, to w...