IndustryResearch & Innovation

What industrial policy for Europe’s defence and space

Europe`s freedom, prosperity and unity depends on its ability to defend a political vision of freedom and rule of law, the idea of a social market economy, and being on equal terms with competitors from East and West.

Further integration is paramount to maintain the Union`s position in today’s global order and requires increased common efforts by the Member States in areas that have been neglected in the past.

New momentum could be witnessed recently with the Treaty of Aachen, by which Chancellor Merkel and President Macron underlined their support for increased European defence integration.

I consider it as very important that the area of defence and space is becoming a focal point of European politics because it will leverage our position as important political actor as seen from the global perspective and as a provider for world leading space technology and defence solutions.

Our future European industrial policy in the area of defence and space must be built on fair competition, robust public-private cooperation, reliability and predictability for European enterprises as well as dedicated political and financial support by the Member States and the European Union alike.

Pre-requisite for such a policy are clear rules for the internal market, intelligent governance support at EU level and synergetic capacities for administrative support to help with funding programmes offered by the EU.

Looking at external competitors and their heavily state-subsidised undertakings, Europe needs to bundle its economic intelligence to safeguard the interests and the competitiveness of European industry.

We must design a framework for strategic industrial diplomacy, promoting European champions in the global market, guaranteeing a fair level playing field and in parallel stress the need for cooperation with other nations for large-scale programs such as space exploration.

Eventually, we require a global market strategy to break into new markets and realise business opportunities outside of the European Single Market.

Industrial policy must also guarantee adequate opportunities, in particular for small and medium-sized enterprises (SMEs), to be competitive along the entire supply chain, offering complementary services and engaging in innovation processes. The EU has to ensure that SMEs receive large administrational and technical support to develop their capacities.

A further key element of the agenda must be the continuation of large scale European Public- Private Partnerships. For example, we need fixed agreements on rocket launches in Europe to ensure competitiveness since other countries are significantly subsidising such activities in their countries to push European competitors out of the market. A final aspect that one has to highlight is security. Space leadership as well as a strong and resilient European defence industry strengthen our independence and reduce our reliance on foreign technologies.

We need a Europe that takes greater responsibility for its own security, to respond and protect itself against technologically advanced external threats.

We must in this regard pay special attention to the topic of cyber security, establishing a EU Cyber Competence Centre to develop technology strategies and IT-capacities to defend critical infrastructure for the benefit of all Member States.

In financial terms this must translate into growing contributions from the EU Budget. While the proposal by the Commission for the next Multiannual Financial Framework (MFF) foresees EUR 16 billion for the Space programme and the European Parliament even calls for EUR 16.7 billion, it might be worth a discussion to establish an even higher budget to keep up with significantly bigger investments made by China and the USA.

However, we should simultaneously engage in strategic partnerships with third countries to position ourselves as equal players.

The European Defence Fund (EDF) is a novelty and the Commission proposes a budget of EUR 13 billion for the years 2021-2027, of which EUR 4.1 billion should directly finance collaborative research projects.

Collaboration across borders must be the common denominator in the field of research as studies by the parliament estimate the cost of non-Europe in the area of Common Security and Defence Policy to be some EUR 26 billion a year, much due to duplications of research activities and a lack of economies of scale for the industry.

The EDF plans another EUR 8.9 billion funding to complement the investments of Member States by co-financing the costs for prototype development as well as testing and certification, triggering far-reaching research and innovation actions.

EU funding must unfold the huge potentials and synergies lying covered in this area to push forward the European defence agenda, while creating high quality jobs, strengthening EU competitiveness and the defence performance of all Member States.

As the chairwoman of the Sky and Space Intergroup, the future development of Europe`s space strategy is a special priority for me. Building satellites without the help of third countries is of strategic importance for all of us.

European citizens, businesses, public institutions and military forces depend increasingly on reliable satellite infrastructure and connectivity capacities.

The monitoring of climate changes in the agriculture sector, weather surveillance, localisation support and navigation, search and rescue support are just a few examples that illustrate how accustomed we all have gotten to such services.

Furthermore, offering up- and downstream services with the help of European satellites will allow companies to offer a growing number of services and provide start-ups with room for innovative ideas. Our common goal must be that such services are offered by European companies, decreasing the presence of foreign providers.

Concluding the guidelines for the EU`s industrial policy for defence and space it becomes evident that these sectors actively contribute to the strategic autonomy and technology independence of the Union, displaying Europe`s ability to lead.

Any future industrial policy must underline this and accompany Europe`s quest to remain a free, prosper and united continent.