Center for Strategic Decision Research

		Dr. Hilmar Linnenkamp Deputy Chief Executive European Defense Agency
Dr. Hilmar Linnenkamp (left), Deputy Chief Executive, European Defense Agency, with U.S. Dir of International Cooperation Alfred Volkman.

"...currently in Europe more than 20 different armored fighting vehicles are in the plans of member-states,
though not yet on the order books.  There are also 15 different versions being planned for equipping
the 21st-century soldier, which is not the best way forward, since these soldiers will need... to fight
together. It is economic nonsense, obviously, but it is also operational nonsense..."

In Berlin in 2006, the workshop focused on technology and technology transfer. Today, the subject is a little more general and I welcome talking about globalization and its good, bad, and ugly aspects.

THE NEED FOR EUROPEANIZATION

I’d like to start by saying that for European NATO member-states of the European Defense Agency—26 out of the 27 members (Denmark is not with us yet)—we can’t talk seriously about globalization until we have talked about Europeanization. That is because 26 or 27 Pentagons need to come together in Europe. For those of you from the United States, you know what it means to have a Pentagon and how difficult it can be to structure relationships between government and industry. Imagine how difficult it would be with a 26-member-state consortium of public administrations. So the global industrial base in my view requires a strong contribution from the European industrial base, which is exactly what I am going to talk about. 

          Traditionally, in Europe, governments and the member-state industrial bases are very close. It is normally quite a national affair to have governments act with their industries. There is even a legal precaution to protect this special relationship, the famous article 296 of the European Union Treaties. This important protective device supports not a  “Fortress Europe” but national closeness between member-state governments and their industries. 

          There is also national closeness between member-states and the equipment their armed forces use. But as General Joulwan and Al Volkman mentioned, we want to give our war fighters the best equipment possible as well as the best equipment for working together, which means standardized or common equipment. It is not heartening to see that currently in Europe more than 20 different armored fighting vehicles are in the plans of member-states, though not yet on the order books.  There are also 15 different versions being planned for equipping the 21st-century soldier, which is not the best way forward, since these soldiers will need to be able to fight together. It is economic nonsense, obviously, but it is also operational nonsense, because interoperability is going to be a big subject and logistical diversity is going to be very expensive.

EFFECTING INDUSTRIAL CONSOLIDATION

          Everyone knows that a lot of consolidation has taken place in the air force and in the air and space industry. But there has not been enough industrial consolidation. The European Defense Agency has been called on to change that, which will be difficult, but let me tell you about the work that the agency is now engaged in to create a truly European defense technological and industrial base. 

          When I spoke about this in 2006, it was still just a plan for getting the member-states together to merge their views on a European industrial base. Since then we have come together. For example, the armaments directors of all 26 member-states got together and defined some important characteristics of such a European base. We also invented the “Three Cs”: the armaments directors and the governments said that a European base needs to be capability driven, to serve the needs of the war fighter; it needs to be competent; and it needs to be competitive, because on the global market European member-state industries will not survive if they don’t work together. 

          This has nothing to do with creating a fortress, and I am grateful that Al Volkman has always understood that this is not the case. The idea is to make the European defense technological and industrial base stronger. In this way we will be both a better partner and a better competitor on the global market.

WORKING TOWARD THE THREE Cs

          Clearly a responsibility of the agency is to work toward the Three Cs.

Regarding capability, a major goal of the agency through mid-year 2007 is to create what we call a capability development plan, a plan that looks much further than the current European Union force planning mechanism. Although the Headline Goal goes until 2010 - 2010 is yesterday in technological and armament procurement terms, so we need to go well beyond that and try to consolidate and harmonize the requirements side of the armaments and defense technology business.

          Regarding the second C, competence, here we are making major efforts on the research and technology side, which was not the case in 2006. We have been able to create a fund that concentrates on force protection activities in research and technology. For the first time, European member-states have committed to putting money into a fund without knowing ahead of time where the money will end up. This is not a juste retour exercise, but a global balancing exercise, and is a small revolution in European affairs.

          Concerning the question of competition, I like very much the metaphor Al Volkman used when he spoke about creative destruction – a concept that the famous German-American Joseph Schumpeter invented. Competition needs to be strengthened on the European market. The borders between the member-states need to become lower - a point that the agency is working toward with the famous voluntary code of conduct for defense procurement in Europe. The member-states seem to be taking the code seriously, and we currently have roughly 10 billion on the “border crossing bulletin board” of the European Defense Agency. However, the proof of the pudding is in the eating, and we do not yet have many cross-border contracts. But this is still a young exercise and we are quite hopeful that cross-border contracts will increase and become a real step toward change in European defense procurement.

CONCLUDING REMARKS

All in all, I think that the contributions of the European NATO member-states are bringing about not a bad and not an ugly but a good globalized defense market by strengthening their own base. Europeans are taking the needed major step towards Europeanization, which must precede globalization.