Daily Management Review

The EU may issue stocks of defense companies


09/16/2016


European Commissioner for Single Market, Industry and Entrepreneurship Elżbieta Bieńkowska said that the European Commission will propose to issue joint stocks of European defense industry companies in September this year, reports Reuters.



U.S. Army Europe photo by Visual Information Specialist Markus Rauchenberger
U.S. Army Europe photo by Visual Information Specialist Markus Rauchenberger
This decision was taken in response to results of the British referendum on leave the EU, and is aimed at strengthening the European defense industry.

The union has been repeatedly suggested to step up cooperation in the EU defense industry, but there were only words and no actions so far. Some EU countries are too territorial when it comes to their own defense industry, including the UK, which has always opposed such proposals.

Now, after UK decided to leave the EU, ideas of convergence and financing of defense industries of the EU countries received a new birth. Among them is creation of a single headquarters for the joint command of the EU military and civilian missions.

According to Bieńkowska, the military budgets of the European Union countries are being reduced, while Russia has increased its military budget by 97%, and China – by 160%.

"We are considering a possibility of combining national budgets to finance common projects in the field of defense, and issue of joint EU stocks," she said, adding that on September 27, she would submit a proposal to EU defense ministers in Bratislava on a meeting, which will not include representatives of the United Kingdom.

The commissioner stressed that Britain never supported the idea, but given the Brexit decision, the idea can find its embodiment.

Bieńkowska, responsible for industrial scope of the new EU defense strategy, plans to create a single European defense fund to finance development of military technology. 27 euro-zone countries have already agreed with this.

According to her, at first financing can be carried out by the European Foundation for strategic investments. This will accelerate development of a number of defense projects.

The Foundation was created in 2015 specifically for financing of infrastructure, energy, research and development in the EU. It was assumed that the fund, which amounts to 21 billion euros, will be able to invest in the 15 trenches. Brussels wants to increase size of the fund, but it has yet to be approved by the EU Member States.

The European Commission has proposed to allocate EUR 90 million in the years 2017-2020 for joint research in the field of defense. The idea is awaiting approval by the States and the EU legislators.

Bieńkowska hopes that her proposals will contribute to development of joint EU defense capabilities, and will make it less dependent on imported technology. Some other ideas include developing a European drone, cyber technology and maritime surveillance. In addition, the participants proposed concessions on VAT for joint EU defense programs.

source: reuters.com






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