Following the arms industry's relatively low-tide period during the direct aftermath of the East-West conflict, the military expenditures rose significantly since 1998. Worldwide expenditures for military hardware rose 37 percent over the past decade. The main beneficiaries were arms industries of the states of the European Union, which is portrayed as the alleged civilian counterpart to the USA. In the five years between 2002 - 2006, the EU states, together, accounted for 30 percent of all weapons exports in the world, equaling the previously biggest exporters, the USA and Russia, each furnishing approx. 30 percent of the worlds arms markets. In 2005, with the sale of $7.8 billion in military equipment, the EU arms sales surpassed for the first time those of its two rivals, to become the world's biggest arms exporter. The leading dealers were the key powers, France ($2.4 billion) and Germany ($1.85 billion). In the global comparison of the five years (2002 - 2006), with arms exports valued at $9.2 billion, Germany pushed its way up to third place among the worlds arms dealers, bypassing France ($8.9 billion).
Struggle for Survival
In spite of their sales successes, European arms industrialists and policy makers see a strong need to catch-up in relation to their better organized rivals in the USA. It is said that there the available finances are much more efficiently applied. According to a European Parliament study, the United States spends twice as much money for arms as the EU, but since it concentrates on 27 defense programs, it is ten-times better equipped than the European countries, that are maintaining 89 defense programs, some being duplications. The remedy is supposed to come through the concentration of the European arms industry, that the German EU Industrial Commissioner, Guenter Verheugen, has referred to as a question of life or death, "If we continue, the fragmented European arms industry will not survive."
The European Defence Agency (EDA), a central authority, established in July 2004, to handle the development and procurement of combat hardware, will direct the consolidation of the European arms industry. The European arms market has enormous potential. This market, according to statistics furnished by the Federation of German Industries (BDI), has an annual volume of 37 billion Euros. At least half of this volume is attributed without public bidding within the individual states. The EDA is supposed to put an end to this practice, to open up the internal national markets to the large key European arms corporations. All EU nations, with the exceptions of Denmark, Spain, Romania and Bulgaria, have signed a code of conduct and agreed to report arms contracts worth more than a billion Euros to the EDA, to be electronically opened to EU-wide bidding. But this process, proposed primarily by Germany, is based upon a voluntary commitment. No provisions have been made for imposing sanctions in cases of violations. Therefore the countries have informed Brussels of only approx. 40 percent of the contracts.
The new EDA chief executive, who assumed office October 1, wants to tear down these "national barriers" once and for all. "We want to make nationally accorded arms contracts an exception," is how Alexander Weis, who previously was Berlin's defense ministry's director of the Arms Sector, explained his objective. 2008 is to be Europe's "Year of Armament" declared Weis and named his first projects. These are aimed at getting as many EU member governments as possible to participate in projects of the key states, Germany and France, enabling European armament ventures to be undertaken without reliance on the US rivals.
The German French joint venture, already under way, to construct 60 new heavy lift helicopters is one of these projects. The estimated high costs of developing the aircraft would force both countries to buy several systems components in the United States to maintain a reasonable price for financing the combat hardware. EDA chief executive Alexander Weis seeks to convince other EU states to order the aircraft. A total of 100 to 140 orders would make the complete development of the helicopter viable in Europe and the purchase of US military hardware unnecessary. The militarization of space, vehemently pursued by Germany, is the new EDA chief executive’s second initiative. Weis is pushing the EU to initiate concrete projects for advanced satellite surveillance in 2008. The existing German and French systems (Sar-Lupe and Helios 2) must be replaced between 2015 and 2018. The development costs should also be shared by other EU member states.
The German EDA chief executive is receiving support from the EU commission that plans to submit proposals for a common European arms market by the end of this year. One of these proposals will be in reference to Article 296 of the EU Treaty, explicitly excluding armaments from the EU’s internal market to allow national states to place contracts with their domestic industries, without EU-wide bidding. The Commission is demanding a more strict interpretation of this paragraph whose abrogation has for some time been demanded by Germany. In a second step, the EU Commission plans to establish a new simplified system of export licenses to facilitate the export of military hardware within the EU.
In Accordance with its Importance
With the liberalization of the market, the German arms industry is not only forcing access to bids on the contracts in other EU member states, but it is also demanding stronger political support. German arms producers allege that other EU member states' companies are benefiting from state subventions and assert that their own "influence in Europe" is not "adequately proportional". The Defence Industry Committee of the Federation of German Industries (BDI) is demanding that politicians cooperate with the industry to determine the "German military technology’s strategic positioning in the future Europe." As far as the future attribution of EU arms contracts are concerned, the BDI points to Germany’s financial contributions ("the most important financial contributor") and demands: "The German industry has to participate in the European community programs in accordance with its financial contribution and its importance."