More hiccups for the EU?

"Protectionism" between EU member states is damaging the competitiveness of Europe's defence industry and is threatening to impact on its long-term survival, the vice-president of the European Commission, Gunter Verheugen, has warned.

"What was true in so many other sectors of the economy is also true of the European defence industry, whose long-term survival will not be served by systematic recourse to Article 296 of the EC Treaty which allows member states to derogate from treaty rules requiring open public procurement where they can demonstrate that their essential security interests are at stake."

During a keynote speech on 18 July, he also criticised the "unnecessary burdens" in the European defence equipment market which he said will lead to "inefficiencies in the defence-related industrial sector".

Inefficiencies in European procurement processes and market fragmentation come on top of the widening spending gap between the EU and US.

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