EC puts back proposal to make military tenders more accessible after German pressure
New rules designed to open up Europe's defence market have been delayed after eleventh-hour wrangling over the extent of the reform.
The European Commission's outgoing internal market commissioner, Frits Bolkestein, had been expected to publish a green paper (initial draft) proposing that more defence contracts should be opened up to competitive tender. Bolkestein's office says the delay is purely technical, but insiders say the commissioner has come under pressure from the German government to restrict the proposal.
All military products are excluded from EU competition rules, allowing countries to favour national suppliers. US companies, including Boeing and Lockheed Martin, have long lobbied for a change in the rules. The green paper is thought to define dual-use products such as IT or military transport capability. EADS is also pushing for a change in the rules to enable it to compete for contracts in countries such as Italy, where projects are often defined as being military to avoid open competition. The EC proposal could lead to more public finance initiative contracts in areas such as ab initio training and open tender processes for systems and transport aircraft.
Flight International has learned that an earlier Bolkestein draft extended the possibility for all defence procurement, including fighter aircraft, to be opened up for tender. However, Germany wants to restrict the preliminary text to goods, such as uniforms, not services or technology. By proscribing "goods", however, the German procurement agency is seeking to avoid later confrontation, the source says.
France was previously in favour of liberalising the defence industry, claiming economies of scale in European procurement could yield annual savings of around €6 billion ($7.3 billion). Paris has recently cooled its enthusiasm for defence reform, however - possibly due to its close relationship with Berlin.
JUSTIN WASTNAGE / BRUSSELS
Source: Flight International
