The Business Of Defense In Developing The Defense Industry Presented by: Dr. Kovács Date: 7 March 2024 Have A Great EDTIB! - European Union → Brokering Cooperation - Member States → Protecting Their Industries - Industry Players → Taking What They Can Get - EDTIB → Fragmented As Can Be - EDEM → Dysfunctional Improving the EDTIB; Creating the EDEM - 2007 - Strategy for the EDTIB - European Defense Package: • Directive 2009/81/EC on the coordination of procedures for the award of certain works contracts, supply contracts and service contracts by contracting authorities or entities in the fields of defense and security • Directive 2009/43/EC simplifying terms and conditions of transfers of defenserelated products within the Community • European Defense Equipment Market (EDEM) The Defense Procurement Directive - Treaty on the Functioning of the European Union, Article 346 • 1. The provisions of the Treaties shall not preclude the application of the following rules:  (a) no Member State shall be obliged to supply information the disclosure of which it considers contrary to the essential interests of its security;  (b) any Member State may take such measures as it considers necessary for the protection of the essential interests of its security which are connected with the production of or trade in arms, munitions and war material; such measures shall not adversely affect the conditions of competition in the internal market regarding products which are not intended for specifically military purposes. • 2. The Council may, acting unanimously on a proposal from the Commission, make changes to the list, which it drew up on 15 April 1958, of the products to which the provisions of paragraph 1(b) apply. The Transfers Directive - Common licensing rules for cross-border transfers - Integrate supply chains, increase security of supply - CERTIDER Protectionism - EU Member States want it - Defense industrial players need it - ...is there even a problem here? - Efficiency? Interconnectedness? - Protectionism and fragmentation - Solution: funding Funding Cooperative Spending - Collaborative defense equipment procurement: 11% - EDIRPA: €300 million (by end of 2025) - EDF: €8 billion (2021-2027) - EPF + ASAP - Not a problem of funding, but one of capacity Protectionist Procurement - There is money, but its spent in the same old ways... - Offsets trending - Not corruption, but protectionism - US Buy American Act - EU Buy ??? Act