The European umbrella organisation for the Defence and Security Department, the federation of European Defense Technology Associations EDTA, has made the following recommendations to the European Parliament on European impediments to effectively implement increased investment in Defence in technology development and systems construction.
The war in Ukraine shows that defence technology and equipment is not a thing of the past, but of paramount importance for the security of the European Union and our member states. Germany is investing another €100 billion in their defence and other European Union member states are also increasing their budgets to the 2% GDP norm. However, the implementation of increased defence investments and work by industry is severely hampered by two restrictions imposed by the European Union.
The first rule is the exclusion of investments in military equipment by the European Investment Bank (EIB) and affiliates. This broad exclusion strongly encourages civilian banks and other financial institutions to adopt similar policies. It would be much more effective if this exclusion were limited to "controversial weapons", such as cluster munitions and chemical weapons, as enshrined in various multilateral treaties.
Another pressing issue is the intention of the European Commission's "Platform for Sustainable Financing" to declare investment in European defence socially unacceptable. Their report of 28 February 2022 again strongly advises private investors across the European Union against investing in defence-related companies. This increasingly hinders member states from engaging European industry in the implementation of their increased defence budgets. Given recent geopolitical developments, this trend should be quickly countered.
On both counts, the policy contradicts the intention in the European Commission's 15 February communication on the Commission's contribution to European defence, which notes on page 5:"ensure that other horizontal policies, such as sustainable financing initiatives, remain consistent with EU efforts to facilitate European defence industry access to financing and investment."
The EDTA recommended that the European Parliament take the necessary measures to enable the effective implementation of increased defence budgets by correcting the two restrictive policies mentioned above.
About the EDTA
The independent federation of European Defence Technology Associations (EDTA) consists of 11 engineering associations across Europe. The federation was founded in 1992 by the NATO-IEPG, then an armaments cooperation forum of the defence ministers of European NATO countries. The federation's membership currently adds up to more than 6,000 individual engineers and 400 companies. See www.fedta.eu for more information.
Contact
For more information, contact us at E: info@fedta.eu
