1. A NEW DEAL FOR EUROPEAN DEFENCE Towards a more competitive and efficient European defence and security sector DG Enterprise and Industry Defence, Aeronautics and Maritime Industries

2. Context Future of Europe's defence industry European Council in December 2013 2

3.  Market Fragmentation and Contraction  Lack of new programmes  Industrial Overcapacity and Duplication  Falling R&D investment Challenges for Europe's defence industry 3

4. 4 EDA Data 2011

5. Source: CEPS Policy Brief No 297, July 2013 5

6. Source: RAND Europe analysis of HIS Jane's data 6

7. Security challenges  Identified deficiencies in CSDP capabilities  New security threats  Need for Europe to assume greater responsibilities in Security & Defence 7

8. AREAS OF ACTION 8

9. Deepen the Internal Market for Defence & Security  Defence Procurement Directive 2009/81  Persisting distortions and  discriminatory practices  State aids  Security of supply important  for defence and supply chains  Intra EU Transfer directive 2009/43 facilitating  transfer of defence products in the internal market 9

10. Deepen the Internal Market for Defence & Security Actions  Ensure market efficiency: market monitoring & guidance for correct application  Tackle Market Distortions: offsets phasing out & state aid monitoring  Mutual assurance for supply between MS  Optimisation of transfer regime  Green Paper on defence industrial capabilities 10

11. Strengthen the competitiveness of the EDTIB  Standardisation/ Certification  Raw Materials  SMEs: COSME, EEN, regional strategy  Skills: Sector Skills Alliances, ESF 11

12. Standardization Use of national defence standards:  Hinders co-operation and interoperability  Increases cost for the industry Actions  Promote Hybrid standards for dual use  Explore the establishment of mechanism to draft European military standards 12

13. Certification Certification cost  50% more development time  20% increase in development cost Action Explore options for involving EASA in certifying airworthiness of military aircrafts 13

14. Raw Materials 14 Raw materials  Indispensable in many defence applications  Critical for competitiveness of the industry  Supply risks Actions  Screening of raw materials  Targeted actions if necessary

15. SMEs  Difficulties in accessing markets in other MS and third countries, R&D, financing Actions  European Strategic Cluster Partnership  COSME, EIF, Structural Funds for dual use  Entrerprise Europe Network  Defence industrial integration into regional smart specialisation strategies 15

16. Skills  Impact of restructuring  Securing critical skills and competencies Actions  Promote skills through Sector Skills and Knowledge Alliances  Retraining by ESF/EGAF  Structural and Investment Funds to help regions affected by restructuring 16

17. Exploit civilian/military synergies  Research: Pre-Commercial Procurement, Preparatory Action for CSDP related Research  Dual use capabilities  Space: SST, SATCOM/MILSATCOM, High Resolution  Energy: Energy Efficiency, Renewable Energy and Alternative Fuels, Energy Infrastructure 17

18. Research Technologies dual in nature  Security theme of FP7, KETs  Synergies and spill-over effect Actions  Pre-commercial procurement of dual use prototypes  Preparatory action on CSDP related research 18

19. Dual Use Capabilities Actions  Interoperability of information service sharing between civilian and defence users  Establishment of civil-military cooperation group  EU-owned/leased dual-use capabilities 19

20. Space  Space technologies and infrastructures by nature are dual use (high costs of separation) Actions  Space Surveillance and Tracking system  Act to overcome fragmentation in security SATCOM, next generation MILSATCOM  Imaging capabilities for CSFP/CSDP, next generation of high resolution imaging 20

21. Energy  Armed Forces are the biggest public consumers of energy in the EU  Largest public owner of free land  Dependence on fossil fuels  Security of energy supply  Strategic Energy Technology (SET) Plan 21

22. Energy Actions  Applicability of EU energy concepts to the defence sector  Comprehensive energy concept for armed forces  Guidebook on renewable energy and energy efficiency  Exchange information with SET-PLAN Steering Group  Guidance in implementation of 2012/27/EU  Support GO GREEN project and possible expansion 22

23. Strengthening the International Dimension  Mrestricted access to third markets  Offsets requirements imply loss of technological advantage  Dual-use export control policy Actions  Mitigate offsets requirements  Promote European companies  Dual Use export control review 23

24. The Way ahead  Integrated approach across the civ-mil dividing line  Consultation Mechanism with national authorities  Roadmap: actions and timelines 24

25. Thank you for your attention! 25