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European Union Plans Defense Research, Financing Support Steps

The European Commission plans to unveil measures to support the region’s defense industry this summer at a time when member states are curtailing military spending as part of austerity measures.

Five ideas have been identified to help support military contractors, including aiding small companies gain access to financing, Daniel Calleja Crespo, director-general at the Commission’s Enterprise and Industry directorate said. More proposals could be added, he said.

“It is important to have a strong industrial base,” Calleja Crespo said today at a European Defence Agency conference in Brussels. “We are ready to play a role.”

Since European rules limit the Commission’s mandate on defense issues, Calleja Crespo said funding support will concentrate on dual-use technologies such as satellite spending. The Commission will not finance large projects like developing new fighter planes, he said.

Major new equipment funding will require action by EU heads of state when they discuss defense issues at a December summit, Calleja Crespo said.

European Aeronautic, Defence & Space Co. Chief Executive Officer Tom Enders warned today that the region’s industry was at risk of eroding because of lack of support and called for programs to be started to sustain companies.

Drone System

Developing a new drone system should be one of the programs to be backed by Europe, Eric Trappier, Chief Executive Officer for French combat aircraft maker Dassault Aviation SA (AM) said at the event.

The commission will renew a push to open Europe’s internal defense trade to greater competition to make cooperate more closely, Calleja Crespo said. It will also try to find ways to help militaries cut energy consumption, one of the major costs for armed forces.

Steps to boost research and development spending are also being examined. “Europe needs to do more. Our gap to the U.S. has increased,” he said.

To contact the reporter on this story: Robert Wall in London at rwall6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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