U.K. May Resist European Union Measures to Reform Defense Market

The U.K. may balk at European Union efforts to impose new rules on the region’s defense equipment market to protect suppliers, Secretary of State for Defense Philip Hammond said.

A European Commission proposal put forward this summer represents “a significant potential expansion” of its role that may not be in the U.K. defense industry’s interest, Hammond said at the DSEi conference in London. Proposals not beneficial to companies, such as Europe’s largest defense company BAE Systems Plc (BA/), will be resisted, he said.

The European Union is looking to expand its involvement in defense industrial issues, traditionally left largely to member states, to maintain capabilities at a time many governments are cutting spending. Among the measures proposed include opening the internal market to greater competition.

“There is a tendency for proposals to come out of Brussels which talk about improving the competitiveness of European industry and what they really mean is imposing a dirigism on European industry,” Hammond said. The U.K. is not alone in resisting the EU push, he said.

One area the U.K. would resist would be an effort out of the European Union to centrally control how export markets are targeted. That is better left at national levels, he said.

An effort to force specialization of the defense industry across Europe also raises concerns, he said, as does the potential impact the EU’s push could have on British defense companies dealing with the Pentagon.

The European Union should push to create a larger, more competitive defense market, rather than looking for ways to narrow it, 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

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.