DOCUMENT A/1931

9 May 2006

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Security research in Europe - reply to the annual report of the Council

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Document A/1931

19 June 2006

Security research in Europe -
reply to the annual report of the Council

REPORT¹

submitted on behalf of the Technological and Aerospace Committee
by José Mendes Bota, Rapporteur (Portugal, Federated Group)

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RECOMMENDATION 782²

(i) Considering that research and technological development (RTD) are two determinants of national and European economic growth;

(ii) Expressing its support for national and European initiatives to make the European Union an area of innovation and technological progress in the coming years;

(iii) Noting that, despite declarations adopted to that effect, the commitments made by the member states of the European Union since 2000 to increase the share of European GDP allocated to RTD to 3% per annum have not yet been honoured;

(iv) Noting the scattered and fragmented nature of national and European security and defence RTD, the duplication of effort and the few promising cooperative projects in this area;

(v) Stressing that security and defence RTD, at national level, is a strategic priority with direct consequences for political, economic and military autonomy and sovereignty;

(vi) Considering, therefore, that the primary responsibility for this area falls to states;

(vii) Noting, however, that in a context of low economic growth, the high cost of security and defence RTD limits the scope of action taken by national governments, calling for the development of intergovernmental cooperation on the basis of joint projects;

(viii) Noting, nevertheless, that current levels of cooperation are insufficient to meet the security and military capability requirements set out in European declarations on internal security in the European Union and the ESDP;

(ix) Appreciative of the initiatives taken by the European Commission since 2004 with a view to establishing a European security research programme;

(x) Noting that, in the current international context, the threat posed by terrorism, particularly radical Islamic terrorism, is ever present in Europe and attacks have again recently taken place in Turkey;

(xi) Supporting the measures taken by European governments and the European Union following attacks in Istanbul in 2003, in Madrid in 2004 and in London in 2005;

(xii) Noting that the continent of Europe has also suffered from forms of man-made or natural devastation jeopardising the security of its peoples, such as environmental pollution and natural disasters (frequent flash floods, storms, large-scale fires and epizootic disease);

(xiii) Considering that any approach to questions regarding Europe's internal security must take account of the diversity of the threats, not focus on any single one;

(xiv) Considering that such approaches can no longer be the responsibility of any one country but must be a joint effort by European countries, EU and NATO members, candidates and partners;

(xv) Considering that, from the outset, civilian and military resources must be brought into synergy to combat the various kinds of threats to the security of countries and peoples;

(xvi) Considering that security and defence RTD is an essential tool in the search for permanent solutions to improve and strengthen overall security;

(xvii) Considering that while governments define priorities and general guidelines for national and European security and defence, they need a solid Security and Defence Technological and Industrial Base (SDTIB) if they are to achieve their aims;

(xviii) Stressing the decisive role played by national or transnational companies and research centres in the field of technological and industrial innovation;

(xix) Noting that, despite the restructuring, mergers and consolidation that have occurred in the European security and defence industrial sector over the last 10 years, the European SDTIB is still at the outline stage;

(xx) Considering that, despite recent initiatives by the European Commission, particularly the Green Paper on Defence Procurement and the inclusion of a "Security and Space" chapter in the European Union's Seventh Framework Programme (2007-2013) on Research, Technological Development and Demonstration, security and defence RTD must remain the responsibility - albeit the shared responsibility - of member states, who alone are responsible for the security of their national populations;

(xxi) Considering that Community action should continue to be governed by the principle of subsidiarity and not seek to substitute or marginalise nation states;

(xxii) Considering in that connection that it is important for there to be close coordination between the activities of the European Security Research Advisory Board and those of the European Defence Agency in security and defence research and technological development (RTD) so as to avoid any conflict of responsibilities or unnecessary duplication;

(xxiii) Considering that, for their part, member states should invest more wisely in security and defence RTD and do so in a spirit of mutual cooperation, in order to avoid unnecessary duplication and dispersal of budgetary resources;

(xxiv) Considering that the European Defence Agency must be the primary - although not the sole - framework for developing a European defence industrial strategy and a European security and defence RTD strategy;

(xxv) Supporting, in that connection, the commitment made in Innsbruck by the majority of EU member states involved in the EDA to setting up a common research fund for the Agency, the amount, administration and supervision of which is yet to be decided;

(xxvi) Considering, following the same train of thought, that the Agency has to have the necessary human and material resources and a budget adequate to allow it to be the means of implementing such strategies, in such a way as to strengthen its hand vis-à-vis the European Commission, and the resources and influence it wields, in order to achieve a better balance between their two roles;

(xxvii) Welcoming the research and technology (R&T) work undertaken by the WEAO Research Cell from October 2004 to December 2005 as discussed in the second part of the fifty-first annual report of the Council and, in particular, the signing of contracts to a total value of 149 million euros, representing by far the highest-value project portfolio WEAO has held since it was set up;

(xxviii) Noting that the transfer of WEAO activities, particularly in the area of research and technology, to the European Defence Agency (EDA) has again been delayed through lack of progress in concluding administrative arrangements between the EDA and Norway and Turkey,

1. Cooperate to a greater extent on security and defence research and technological development projects and programmes;
2. Ensure that the distribution of national security and defence RTD budgetary resources is such as to encourage the promotion of cooperative programmes, including with non-European countries with recognised capabilities in those areas, and in particular allies and friends such as the United States, Canada and Israel;
3. Support the Commission's subsidiary action in the area of security research, in particular, by making provision in law for increased flexibility in the transfer of technology, information and expertise between countries and companies within the European Union;
4. Develop the European Defence Agency's ability to act in the area of security and defence RTD and provide it with the financial means to launch strategic programmes, determined jointly by the participating member states;
5. Extend the Agency's remit to space matters with security and defence implications, as the European Commission has done by including a "Security and Space" chapter in the European Union's Seventh FPRD (2007-2013);
6. Initiate a debate on the advisability of establishing a European Defence Science and Technology Council and envisage establishing a European Technological Innovation Agency in the security and defence field, under the aegis of the European Defence Agency;
7. Ensure that WEAO is not dissolved before the EDA has concluded satisfactory arrangements with Norway and Turkey guaranteeing those two countries conditions for cooperation equivalent to those that they currently enjoy within the WEAO framework;
8. Increase investment in cooperative programmes in cryptology, robotics, net-centric architectures and systems and nanotechnology with security and defence implications;
9. Formulate a European industrial security and defence strategy to support small and medium enterprises (SMEs) in the sector, encourage cross-border cooperation between SMEs and allow them to develop independently to reduce the risk of control being taken by third parties from outside Europe, in the event of technology not being transferred on a reciprocal basis;
10. Ensure that in the framework of transatlantic cooperation in security and defence research European nations' legitimate interests are taken into account and that greater reciprocity and a better balance is achieved in terms of technology transfer;
11. Keep the Assembly informed of developments on national, European and international security and defence RTD programmes in which European countries and companies participate.

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EXPLANATORY MEMORANDUM

submitted by José Mendes Bota, Rapporteur (Portugal, Federated Group)

1. The terrorist attacks on the United States on 11 September 2001 placed internal security questions at the forefront of the concerns of the governments of most of the world's nations. The scale of this event, which was followed in later years by other acts of terrorism, including, in Europe, the attacks on Turkey (in 2003), Spain (in 2004) and the United Kingdom (in 2005), has prompted a change in thinking on internal and external security issues. The concept of security has been gradually extended to cover nearly all political, economic and social activities of nations. Today, guarding against terrorism is only one aspect of this step towards making societies secure, but it still remains one of the key considerations.
2. Within the European Union, the security of nations and citizens is a matter for national authorities. The Union has no territory or population. It is a group of nations which have voluntarily accepted to delegate aspects of their sovereignty, particularly economic ones, to an organisation that combines intergovernmental, community/supra-national and mixed/subsidiary elements. Control over internal security takes place through intergovernmental and mixed cooperation. In this area, the Union's role is to coordinate and assist and it is therefore a multiplier of capabilities for the benefit of member states.
3. Questions of security have obvious implications in terms of research, technology, development and production. Given that security is intended to be global, it must be able to cover all kinds of manmade or naturally occurring threats. Terrorist attacks, environmental pollution and natural disasters are all examples of real dangers which national authorities should endeavour to avert and to be able to deal with. If this is to happen, prior planning is needed, as are human resources and assets sufficient in both quantity and quality. In this respect, European countries are not all equal in terms of their capabilities, but priorities are, by and large, common: namely, the protection of their populations and infrastructure. This, quite naturally, leads to an intensification of cooperation and the "Europeanisation" of security, but without, nevertheless, it becoming exclusively a Community activity.
4. One of the changes to occur post-2001 was the way in which the security and defence sectors drew closer together, almost to the extent of merging. Military personnel are regularly used for internal security missions and armed forces' external operations include paramilitary and police elements, for example, assisting peacekeeping operations in post-conflict areas. Assets are also made available, subject to certain conditions of use, for a wide range of both internal and external security operations, depending on requirements and situations. Examples of this include military naval personnel monitoring maritime areas, air forces being used to transport aid to populations in areas where access is limited or temporarily blocked and land forces being used for engineering works.
5. Although the specific features of each area - such as the principal missions entrusted to the players in each sector, the chains and procedures of command and control, certain assets and technologies, and also budgets - remain, the security-defence combination is an undeniable reality. However, limitations in this area in Europe have meant that the trend set by the United States has not been followed. In the United States, the terrorist attacks on 11 September 2001 caused, as a collateral effect, a significant increase in the budgets allocated to defence and internal security. The latter was restructured quickly, albeit not without some difficulty, by the creation of a Federal Department of Homeland Security.
6. The United States is a federal state and this example prompted the wish, within the European Union, to emulate its efforts, particularly on the part of the European Commission, which saw an opportunity to increase its scope for action. The fight against terrorism has become the leitmotif for involvement in various political and technical initiatives, ranging from the strengthening of intergovernmental security cooperation, within the framework of the Union's mixed Justice and Home Affairs pillar, to the creation of the post of Counter-Terrorism Coordinator. The European Commission has broadened its competences in this area, with the Directorate General for Justice, Freedom and Security, headed by European Commission Vice-President Franco Frattini, playing the key role. Nevertheless, its involvement is limited by the prerogatives of member states, the only parties able to decide on the effective application of decisions adopted.
7. The Commission found a "grey area" - research and technology - in which it could act not only alongside member states, but also as a driving force. The Commission has no direct competence for defence. For civilian research at EU level, it is, after national governments, one of the main sources of funding. The Framework Programmes for research, technological development and demonstration activities (FPRDs), which last for several years, form the instrument of the Commission's action in this area. The Seventh FPRD (2007-2013) includes a new chapter on "Security and Space", for which an annual budget of 570 million euros has been proposed (by the Commission). However, the European Council's budget decisions of December 2005 make it necessary to revise that figure downwards.
8. It does, however, constitute a major step for the Commission. By assuming responsibility for security research, it will also have an impact on the defence sector through synergy and the dual-use nature of research and certain technologies which may be common to both areas. The Commission's contribution will therefore strengthen the already substantial input made by governments with positive consequences all round for European Union security and defence capabilities, including for external military operations. By investing in this area, the Commission will also have to cooperate with the European Defence Agency (EDA), which began operating in February 2005. For the time being, the EDA has a limited role, since its research and technology budget is 100 times less than that envisaged by the Commission for security.

9. Within the framework of the European Union, the concept of security is considered to be comprehensive and to cover a wide range of areas. The European Council therefore adopted, in December 2003, a European Security Strategy (ESS), which identified the key threats to European security in terms of both its internal and external components. These were firstly terrorism, followed by the proliferation of weapons of mass destruction, which was described as "the greatest threat to our security". Like the United States' September 2002 National Security Strategy³, the ESS establishes a link between the two issues. By adding organised crime to the list of major threats to European security, the ESS considerably increased the Union's scope for action in the area of internal security.
10. In order to implement its Strategy, the Union has to acquire an action capability according to defined guidelines. Investment in security and defence research and technology is one way of achieving this. The role of the Union in the civilian sector has been established and recognised for decades: what is new in the current debate is the change from a relatively compartmentalised model to a global approach in which civilian and security and defence research are more closely coordinated and interlinked. The desire to eliminate duplication and waste and criticism of the fragmentation of effort in European countries and across Europe as a whole are arguments in favour of a concept which could be described as "integrated global research". The basic idea is that the majority of areas of civilian, security and defence research and technology could be interlinked and brought into synergy in a mutually profitable relationship.
11. Technologies and applications developed in this way could be deployed more quickly in the various sectors in which they are required. Economic factors are also important, because this process would mean that resources would be less widely dispersed. The effectiveness of European research, as applied to security and defence, would be increased, taking as its starting point a common core of civilian research. This is the opposite of the American system, where defence research has decisively assisted civilian and security technological development in the United States, which in turn benefits the defence industry. In Europe, this process of interaction is enjoying a new lease of life at EU level and even within member states, with the launch of major initiatives, such as the 2000 Lisbon Initiative, aimed at making European research and technology more dynamic.

1. The European Union and research and technology: the European Research Area

12. On 23 and 24 March 2000, the European Council, meeting in Lisbon, established as a strategic objective making the European Union "the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion". As necessary for achieving that goal, the Heads of State and of Government of the 15 member states (in 2000) identified research and technology, amongst other factors, calling for the setting up of a "European Area of Research and Innovation". The governments therefore approved the guidelines set out in a Commission Communication dated 18 January 2000, entitled "Towards a European research area".
13. This document, still the key reference in terms of European civilian research, states that the role of the Union essentially consists of "measures to help to support European cooperation in research and technological development." The Commission also recognises, however, that "... the principal reference framework for research activities in Europe is national". This was the situation in 2000; it continues to be the case in 2006, and is even more applicable to the areas of security and defence research and technology. The fact that the national interest, with its legitimate claims in terms of funding, national prestige, employment, technological and industrial development and, for obvious reasons, security and defence comes first, also creates obstacles.

14. In a Communication dated 18 January 2000, the Commission stated that "the European research effort as it stands today is no more than the simple addition of the efforts of the 15 Member States and the Union. This fragmentation, isolation and compartmentalisation of national research efforts and systems and the disparity of regulatory and administrative systems only serve to compound the impact of lower global investment in knowledge". In a European Union with 25, 27 or more member states, this situation can only become more acute, given that budgetary priorities change each time the Union enlarges and horse-trading between member states becomes more complex.
15. In order to resolve this deadlock, the Commission suggests "Decompartmentalisation and better integration of Europe's scientific and technological area [are] an indispensable condition for invigorating research in Europe. We need to go beyond the current static structure [...] towards a more dynamic configuration. This has to be based on a more coherent approach involving measures taken at different levels: by the Member States at national level, by the European Union with the framework programme [FPRD] and other possible instruments, and by intergovernmental cooperation organisations. A configuration of this kind would make for the essential `critical mass' in the major areas of progress in knowledge, in particular to achieve economies of scale, to allocate resources better overall, and to reduce negative externalities due to insufficient mobility of factors and poor information for operators (...)".
16. This also applies to security and defence R&T, where national interests are even more decisive than in the civilian sphere. The EU Commission's Communication therefore proposed creating a European Research Area (ERA) also to cover "dual use research". This was on the basis that "in areas such as aeronautics, advanced materials or information technologies and communications, numerous research projects can give rise to applications in both the civil and the defence sector. In its two communications on the defence industry in 1996 and 1997, the Commission underlined the possibility of maximising the synergy between these two sectors and the need to improve complementarity between the programmes undertaken in Europe in this field".
17. Although the immediate results have been modest, it can be said in their favour that the initiatives taken by the Commission and the European Council in 2000 made European research and technology (RTD) issues a key priority for the Union for the years that followed. Generally speaking, Europe is a recognised area of scientific and technological progress, but one where there is no global strategic "master plan". In order to reach that stage, we will need to intensify intergovernmental cooperation, but also reduce existing barriers to transnational cooperation in the private sector, a key player in this area. Ensuring the recognition of qualifications and experience, the mobility of researchers and the protection of intellectual property rights are some examples of areas where progress still needs to be made.
18. Civilian RTD also makes a considerable contribution to establishing, strengthening and developing a European security and defence technological and industrial base (SDTIB). This base, one of the key objectives of the European Defence Agency (EDA), is dependent on the general condition of European civilian RTD, which itself depends on national capabilities and public and private investment. New information and communication technologies are, for example, an area in which the impact of progress is as significant for military capabilities as in national daily and economic life. The difference lies in the speed with which applications resulting from RTD in this area can be used in the civilian or security and defence sectors.

19. In order to implement the Lisbon Strategy and give momentum to the proposal for establishing the European Research Area, the European Union's Sixth Framework Programme for Research and Technological Development and Demonstration Activities received a budget allocation of 17.5 billion euros⁴ for the 2002-2006 period, an increase of 17% compared with the previous FPRD (1997-2001). It is an ambitious programme which aims to create a budgetary precedent that can be used for the next FPRD. In 2002, the Union also brought in substantial changes in preparation for the 2004 enlargement, preceded by the launch of a process of reform of the European institutions⁵. It is also in the process of developing its military crisis-management capabilities, one means of achieving this being to improve and develop intergovernmental cooperation in the area of security and defence RTD.
20. The funds allocated to the Sixth FPRD are quite extensive, but account for only approximately 5% of the total amount of (national) public research expenditure (not including defence research) of all the EU member states together (15 in 2002)⁶. The role of the Union, seen from this perspective, consists of supplementing the national commitments and promoting wider cooperation, coordination and harmonisation for European research, technology and development projects. Moreover, Community funding is designed exclusively for transnational cooperation projects. What the Sixth Framework Programme offers in addition is the identification of seven "Priority Thematic Areas". These are the main guidelines for creating the European Research Area.
21. These themes also have implications for security and defence. They can act as a reference point for the establishment, if the governments of the Union's member states so decide, of a list of strategic RTD capabilities, to be preserved and developed on an autonomous basis within Europe. For the time being, this debate is taking place essentially at national level, with an initial major document - the Defence Industrial Strategy (DIS) - having been published by the United Kingdom Government in December. Defence research and technology and innovation are the subject of a chapter of the report which underlines the importance of these areas in maintaining, reinforcing and modernising military capabilities.
22. Centred on defence aspects, this Strategy provides an indication of the sectors to be monitored, by underlining, for example, that: "We also need to look at where the convergence of key technology fields like ICT (Information and Communication Technologies), life sciences and nanotechnology might create new threats or capabilities with defence relevance"⁷. These three areas specifically form part of the seven "Priority Thematic Areas" identified in the Sixth FPRD:

23. They are civilian research areas, as the Commission does not have legal competence with regard to defence research and technology. However, all of these areas, down to "Citizens and governance" which involves the social sciences, have security and defence implications. Being able to provide appropriate information to the public at large and sound communication between political institutions (government and parliament) and the citizenry are strategic advantages at a time when the majority of European nations are involved, for the sake of the national interest, in a proactive and expeditionary defence policy, both in NATO and under the European Union's ESDP.
24. The other two chapters of the Sixth FPRD discuss the setting up of the European Research Area, the aim being to structure it and strengthen its bases through coordinated action and by means of research and innovation policy. Nevertheless, the success of this ambitious project is in the hands of governments, which have had to deal with other priorities, due largely to the geostrategic developments resulting from the 11 September 2001 attacks against the United States, the general economic conditions in Europe, and the consequences of the 2004 enlargement of the EU from 15 to 25 members, but also partly to the conflicts of interests surrounding the Union's budgetary orientations for 2007-2013 - precisely the period the Seventh FPRD, with a "new" thematic area: "security and space", is to cover.
25. The Commission also has a practical tool for taking action with regard to research, the Joint Research Centre⁸. The JRC has a budget of 300 million euros and brings together seven European institutes under the responsibility of a Director General, reporting to the European Commissioner for Research, Janez Potočnik. The Director General is Roland Schenkel (Germany). A Board of Governors, representing the science, research and technology sectors of the EU member states assists and advises the Director General. Candidate countries and associate countries (linked to the EU by various agreements or research activities) have guest status⁹.
26. The seven institutes are as follows:

27. The JRC employs approximately 1 600 people, two-thirds of whom are involved in scientific projects (on renewable or non-renewable contracts of 3-5 years). Approximately 700 "visitors" are also involved, in varying capacities, in JRC activities (stockbrokers, national experts, research assistants, for example). The JRC is civilian in vocation but some projects carried out within the Institutes have security and defence applications. Examples of these include, but are not limited to, the following:

2. The European Security Research Programme (ESRP)

28. On 3 February 2004, the European Commission published a Communication "concerning the implementation of the Preparatory Action on the enhancement of the European industrial potential in the field of security research". On the same day, a decision by the Commission concerning "the implementation of the Preparatory Action (...)" was published in the Official Journal of the European Union. The Commission therefore made the first move in terms of enhancing internal security in Europe, with a view to gradually extending its competences towards security and defence, areas which are traditionally a matter for individual nations.
29. The dual-facetted character of security research allows the Commission to become involved in these areas while bypassing the political obstacles. In earlier years, particularly since 1997, the Commission addressed the issue of the defence industry in Europe and found allies within the industry in favour of a gradual "communitarisation" of the sector. The fundamental idea was that Europe needed an open defence equipment market in order to encourage rationalisation, consolidation and competitiveness across the industry. The debate continues today with the "Green Paper on defence procurement", published in September 2004¹⁰.

30. Security is an area where competencies are to a degree shared between the member states and the Union. The objective is to put in place a European area of "Justice, Freedom and Security", according to the "Hague Programme" adopted by the European Council in Brussels, Belgium, on 4 and 5 November 2004. This initiative was one of the consequences of the Madrid attacks on 11 March 2004, the first major terrorist attack in Europe, inspired by al-Qa'ida. The attack intensified the European counter-terrorism cooperation in progress since the 11 September 2001 attacks against the United States.
31. Within the context of the global mobilisation to combat terrorism advocated by the United States, the European Council, at an extraordinary meeting on 21 September 2001, had adopted a counter-terrorism action plan. On 13 June 2002, the European Union Council, at a "Justice and Home Affairs" meeting, adopted an anti-terrorism framework decision. Published in the Official Journal of the European Union, the decision carries legal weight and is binding on all EU member states. The Commission also engaged in the fight against terrorism and, on 12 December 2001, as one of its first initiatives, set up a "Group of scientific experts on the fight against biological and chemical terrorism".
32. With the Communication and the application of the Preparatory Action on Security Research on 3 February 2004, the Commission gave itself a central role in setting up a European mechanism for fighting terrorism and other threats to security. It chose an area where member states' initiatives are scattered and fragmented, even within countries, and its arguments found broad support among industry, the scientific community and the research and technology sector. The commitment by the Commission also includes a non-negligible financial contribution, in addition to that which countries are able to provide. For many European countries, and particularly those with limited resources, Community funds ensure that a national civilian technology and security research capability can be maintained.
33. In its Communication, the Commission was also careful to present its role as being "complementary to the actions and efforts that are being deployed by the Member States and the other EU Institutions in this area". The Preparatory Action is one of the Commission's contributions to realising the objectives set out in the European Security Strategy, adopted on 12 December 2003.
34. Research and technological development are the means chosen, in line with the argument that "excellence in Research and Technological Development (RTD) is a prerequisite for the ability to tackle the new security challenges. There is scope for significant added value and economies of scale in the field of security-related research through more effective coordination and harmonisation of requirements and consistent approaches at a European level to RTD activities, capabilities and competencies".
35. The Preparatory Action also fits in with the plan to include security issues in the Seventh FPRD as from 2007. The Commission's initiative is centred on prior activities which divide roughly into two categories: projects and supporting activities. The first are aimed at "demonstrating the potential to address the immediate security challenges that Europe faces, as well as considering possible technical, contractual, and implementing issues to be developed for the future programme" (after 2007).
36. Supporting activities reflect the need to restructure, harmonise and consolidate the European RTD sector and relate to "the fragmentation of structures in Europe, the integration of heterogeneous networks, improving the understanding of the existing activities in specific fields, socio-economic and market studies, road-mapping, scenario building including threat analysis, and technology foresight exercises".
37. Five priority missions have been identified for the Preparatory Action, all of which also have implications for RTD and defence capabilities:

38. The Commission will assume full responsibility for managing the Preparatory Action, which from the outset will have quite a sizeable budget (although modest as measured against what it is hoped to achieve) to the tune of 65 million euros for the 2004-2006 period, 15 million of which is to be made available by the end of 2004. These sums will allow a limited but carefully selected number of projects (six to eight per year) and supporting activities (around 10 per year) to be financed. The Preparatory Action is not included in the Sixth FPRD but will complement it as far as security is concerned. However, the ultimate objective is the implementation of a new, more comprehensive, programme, with an annual budget at least 10 times larger as from 2007. In order to achieve this, the Commission is relying on both the practical results of the Preparatory Action and measures taken vis-à-vis governments, notably the setting up, as of October 2003, of a group of "high level figures chaired by European Commissioners Philippe Busquin (Research) and Erkki Liikanen (Enterprise and Information Society)".
39. This group, made up of "CEOs from industry and research institutes, high level European political figures, members from the European Parliament and observers from intergovernmental institutions"¹¹ produced and published, under the auspices of the Commission, a report entitled "Research for a Secure Europe: Report of the Group of Personalities in the field of Security Research". This document, published on 15 March 2004, was used to promote a role for the Commission with regard to defence research, and implicitly with regard to defence. The authors felt that the new threats facing Europe in the aftermath of 11 September 2001 "call for European responses and a comprehensive security approach that addresses internal as well as external security and can combine civil and military means"¹².
40. Technology is one of the means of achieving this objective, which is in line with the European Security Strategy. Nevertheless, European research is in need of reform and restructuring. According to the authors of the report:

41. The European Security Research Programme (ESRP), as proposed in the Group of Personalities' report, consists of the following:

0. authors of the report, who include representatives from major security and defence industry companies, have taken as a reference the United States and the sums allocated to internal security (and defence) since 11 September 2001. Irrespective of the differences in political and economic organisation (i.e. deficits) between the United States and Europe, they estimate that the United States has spent US$ 3 billion per annum on security RTD, of which over US$ 1 billion has been spent on scientific and technological (ST) research¹⁵. They are therefore calling for investment in Europe of the same level - a minimum of one billion euros per annum (with the expectation, on the basis of the American model, that this amount will increase to 1.8 billion euros per annum)¹⁶.
42. The Group of Personalities' report was published on 15 March 2004 and adopted by the Commission in a Communication dated 7 September 2004 entitled "Security Research: The Next Steps". The Commission, acting on the basis of the Group's favourable conclusions - from its point of view - immediately placed itself at the centre of the mechanism for European security research (which also has implications for defence):

43. In 2004, the Commission successfully placed the issue of European security research at the top of current and future EU priorities. Its Preparatory Action launched a dynamic which brought on side companies operating in the sector, research centres, and also governments. The contribution of fresh money, in addition to Community, national and private funds, allocated to ST research in general, resulted in a multiplicity of initiatives and projects, in response to tenders issued by the Commission. In 2005, the Commission gave new momentum to the area of security research by submitting the contents of the Seventh FPRD chapter on security and space. With this ambitious project, the Commission extended its field of competence a degree further towards defence issues.

44. Security research covers a very wide area of activities with defence applications. And, in turn, the results of defence research may be used for civilian and security applications. In the documents published by the Commission and in the Group of Personalities' report, one of the points put forward argues for a European approach, in this case, a Community approach, namely, a separation between civilian, security and defence research, which according to the documents in question, appears to be common practice in Europe. And yet the example of the United States is taken as the model. Not to put too fine a point on it, the European Union is not a United States of Europe and national defence priorities and the defence equipment programming schedules of European countries, EU and NATO members, are not sufficiently harmonised or coordinated.
45. Moreover, technological and industrial potential, measured in terms of available and invested funds, armament programmes, laboratories and research centres, technological superiority, centres of excellence, and for testing and evaluation, is concentrated in a limited number of countries: those which make up, in various configurations, OCCAR and WEAO¹⁷ and those that are signatories to the Framework Agreement on measures to facilitate the restructuring and operation of the European defence industry. In reality, half a dozen European countries from among the Union's 25 and NATO's 24 member states account for approximately 90% of purchasing and investment in RTD and defence programmes¹⁸. For example, the United Kingdom anticipates spending over four billion euros in 2006, France over 1.4 billion and Germany just over one billion.
46. Precisely the same characteristic applies to civilian RTD and indeed also to the industrial sector. According to the second EU Industrial R&D Investment Scoreboard, published in December 2005, "companies from just three countries (Germany, France and UK) [in terms of size of RTD investment] together represent around three quarters of both total R&D investment and sales and almost one third of the total number of EU companies in the Scoreboard" (from a total of over 700 in all EU member states). This concentration of budgetary, human and technological resources is an advantage in global terms: for this grouped effort together with the fact that other countries such as Sweden, Italy, Finland, Spain or the Netherlands, have developed niche technologies (information technology, aeronautics, radars, captors and sensors, electronic and military electronics, for example) means that Europe is still, after the United States, the main centre for technological innovation in the world.
47. Nevertheless, France, Germany and the United Kingdom do not form a coordinated and harmonised block providing guidelines for the rest of Europe, and they are also the countries which protect their national interests most fiercely. This is something which came to light during the discussions on the European Union's budget for the 2007-2013 period. In this context, there is a need when promoting European security research, even under the leadership of the Commission, to take into account the weight of influence of certain countries in this area and the limitations at intergovernmental level to genuine cooperation. The Commission must also take account, in any initiative it takes, of a new partner which is also seeking to play a central role in security and defence research - the European Defence Agency.

1. Changes to the ESRP and the dual use of technologies

48. One of the primary objectives of the European Security Research Programme is to reduce the barriers in place between civilian and defence research. It is a recurring theme in European Commission communications on the subject and was also referred to in the Group of Personalities' report. In its 11 March 2003 Communication entitled "Towards a European Union Defence Equipment Policy", the Commission assessed the situation in Europe and proposed solutions to encourage these two sectors to move closer together. It was this document that mentioned the idea of a Preparatory Action for security research. This also shows that the Commission, by tackling the issue of security, is seeking to establish competence for itself in the area of defence, through the channels of industry and research.
49. The Commission at the time stated that European cooperation in terms of defence was restricted and limited in scope and further pointed out that:
0. "(...). European countries invest four to five times less than the US, and this gap is accentuated by the fragmentation and compartmentalisation of European research. This allows the Americans to impose quality standards that Europeans often find hard to meet because of the failure to invest in certain key technologies.
0. Europe there is a fairly strict divide between civil and military research. Technology transfers from the civilian sector to the defence sector remain low while there are significant transfers from European defence research to civilian activities. We need to multiply such synergies by creating a snowball effect that will strengthen European industrial competitiveness and help achieve the goal laid down by the Barcelona European Council of March 2002, namely 3% of GDP devoted to financing research by 2010".
50. The solution advocated then, as now, was to grant the Commission increased responsibilities in the area of security and, hence also, defence, research:
0. Commission has had a great deal of experience in managing Community research programmes and coordinating national research activities and programmes. It is willing to offer its expertise for an initiative to promote cooperation on advanced research in the field of global security.
0. the Union and the Member States would derive greater benefits from national research programmes if they were better coordinated, something which is also true of advanced security-related research. By harnessing efforts at European level with an eye to medium to long-term requirements, advanced technologies that are crucial for Europe could be better developed and a real European value-added gained (...).
0. prepare for the implementation of this advanced research agenda, the Commission intends to launch a preparatory project that it would implement with the Member States and industry to implement some specific aspects that would be particularly useful in carrying out Petersberg tasks. This preliminary operation lasting no longer than three years would constitute a pilot phase for acquiring the experience for evaluating the conditions and arrangements needed for effective cooperation between national research programmes in the field of global security".

(a) Security and defence research and technological development

51. The American example and comparisons between the two sides of the Atlantic as regards investment and return on investment, technology, applications, products, exports, innovation and hence also military capability and geopolitical influence are also often used as arguments to create a European momentum. With its capacity for funding, albeit very limited when compared to that of large and medium-sized European countries, the Commission has been successful in capturing the interest of the defence industries in its programme. The latter have been involved in a process of restructuring and consolidation since the 1990s and, through mergers, buyouts and the transfer or cessation of business, have acquired a European transnational character, yet they still have to deal with a wide range of different purchasers and requirements at national level.
52. This fragmentation of the European defence equipment market also has repercussions for security and defence research. All European countries want to keep a number of industrial and technological capabilities on their own soil, and even in some cases to develop them into national champions (Italy, which has a highly consolidated defence sector but which has difficulty in extending into the European and international markets is a case in point). In the sphere of research and technology, the number of parties involved is even higher. All European Union and NATO member states have national (public or private) capabilities, universities and research centres. Some of these specialise in niche technologies, such as software, new information and communication technologies, materials, biotechnologies and basic research, for example.
53. However, there is no genuine coordination at European level and there are many instances of compartmentalisation between the public and private sectors. Issues of national security and of security of supply are, so to speak, the easiest to resolve since they are essentially a matter of political and administrative choices and decisions. What makes cooperation such a sensitive issue, are primarily problems of patents and trademarks, intellectual property rights, competitive advantage in domestic, European and international markets (exports), transfer of technologies and the dissemination of know-how. Being a technology leader, competitive and a strong performer translates into more funding for publicly-owned laboratories and research centres and into profits for companies investing in RTD.
54. The other drawback of the European system of security and defence RTD is the high level of dependence on a single client/investor, the state. However, countries are clearly not all equal from the capabilities point of view, with large countries giving preference to cooperation projects to which each party makes an equivalent and substantial financial, technological or industrial contribution. Public funds benefit national players first and foremost, and even where large companies are transnational, they are often split into national divisions: EADS France, EADS Germany and EADS Spain, or Thales France, Thales Netherlands, Thales UK and Thales North America, for example. Governments are involved at all levels and have no hesitation in intervening to protect their interests, whether through declaration of intent¹⁹ or through direct legislative and regulatory measures.
55. However, the capacity of the vast majority of European countries to support high added-value security and defence RTD is still very limited in budgetary terms. The solution can be found in the pooling of financial and technical resources, intensifying cooperation, ensuring synergy between civilian research and security and defence research. This is what the Commission proposed facilitating through its Preparatory Action. The guaranteed contribution of 14 million euros for 2004, albeit a relatively modest sum, was welcomed in industrial and research circles, in the hope that it would have a knock-on effect on budgets, with a view to the Seventh FPRD (2007-2013).

(b) Areas of action and projects for the Preparatory Action

56. The actual launch of the Preparatory Action prompted enthusiasm from companies, which responded very quickly to the Commission's calls for tender. The first call for proposals was published on 31 March 2004. Of a total of 123 projects and 50 supporting activities presented and considered to be viable, seven projects and four supporting activities were selected:

Areas of action:

Projects:

Supporting activities:

57. It is not surprising that large companies and national and European research centres have been made responsible for the first series of projects, while the smaller countries and small and medium-sized enterprises are involved above all as subcontractors²⁰. This is due to the fact that resources and capabilities, as explained above, are concentrated amongst a limited number of European public-sector research and industry players. To some extent, it is the hard core of RTD and the European security industry that needs to be consolidated and protected when preparing a European security and defence industrial strategy to complement the December 2003 European Security Strategy.
58. The projects and supporting activities selected during the first call for tender all have direct implications for internal defence or armed forces' external operations. Consequently, the European Union intends making provision in its initial crisis-management planning for military aspects (deployment, stabilisation and securitisation during the initial phase), security aspects (police, a European gendarmerie) and civilian aspects (reconstruction and technical assistance). The technologies chosen are useful for and sometimes common to all these elements.
59. The relative success of the first phase of the Preparatory Action, at least in terms of media coverage, has encouraged the Commission to expand its role in the area of security research. In June 2004, it announced its intention to add a new chapter ("Security and Space") to the Seventh FPRD (2007-2013). Two sub-issues were also identified by the Commission as bringing in future programmes: satellite radio-navigation to assist security and border protection (surveillance, detection and protection). In autumn 2004, the first contracts following the 31 March 2004 call for tender were signed.
60. On 5 February 2005, a second call for tenders was published for the period 2005-2006. The priority areas identified were the same as those for the March 2004 Preparatory Action. In June 2005, 13 bids were selected (eight projects and five supporting activities), of a total of 156 bids submitted²¹. The budget was, once again, set at 15 million euros.

Projects:

Supporting activities

61. The third and final call for tenders under the Preparatory Action for 2006 was published in February 2006 and the selected projects are expected to be announced in May. The priorities and the budget will remain the same as for the previous Actions. This third phase will close an important chapter in the implementation of the EPRS, providing an indication of the potential for restructuring security and defence RTD in Europe around key projects, targeted and open to extensive public and private involvement.
62. The Commission's ambition is to maintain this dynamic in the medium and long-term, while keeping control over developments in the European Research Area and in the field of security research.
63. The inclusion of a chapter on "Security and Space" in the Seventh FPRD is one way of achieving this. By moving in this direction, the Commission will also be prompted to act in conjunction with the European Defence Agency to avoid unnecessary duplication and the dispersal of national and European resources.

2. What role is there for the European Defence Agency?

64. In 2006, the European Defence Agency (EDA) will enter its second year of operations. As an instrument of intergovernmental cooperation on defence capabilities within the European Union, the Agency has competence for defence research. The European Union Council Joint Action of 12 July 2004 "on the establishment of the European Defence Agency", assigns the Agency the task of acting:

(a) RTD in the European Defence Agency

65. In the space of one year, with a very limited budget and staff (80 people), the EDA has become the focal point for European intergovernmental action in the field of defence RTD and equipment. The Agency's Research and Technology Division also aims to be able to manage cooperation projects, like the WEAO (Western European Armaments Organisation) Research Cell before it. To this end, the Agency has a fund of approximately 5 million euros for R&T activities, a very modest sum considering actual requirements in terms of European military capabilities.
66. As a temporary solution, the EU Defence Ministers who make up the EDA's Steering Board²², meeting in Innsbruck on 7 March 2006, agreed to set up a common fund to finance R&T defence projects. This project, in which the United Kingdom did not take part, is to be discussed again in May 2006 to establish the amount of money to be allocated. The final decision is to be made, in principle, by the European Council in June 2006. The two other proposals which were discussed during this meeting in March 2006 were aimed at promoting intergovernmental cooperation or increasing the Agency's R&T budget (for the benefit of member states). As with the code of conduct on defence procurement, adopted in December 2005, it was the "coalition of the willing" principle which prevailed²³. This code is to come into force, for countries that stated that they were willing to abide by it, as from 1 July 2006.
67. Whilst the common R&T defence fund is being set up, the European Defence Agency will continue its activities, overcoming the lack of resources by targeting action at areas deemed to be priorities for improving European military capabilities. This is in line with the guidelines defined by the European Union Defence Ministers at the EDA Steering Board meeting in Innsbruck, inviting the Agency to turn "military capability objectives into specific technology priorities". In order to define thematic priorities, the R&T Division drew up a list of "technological sectors", known as CapTech, which will provide a reference.
68. As a first step, 12 CapTechs, classified into three categories, have therefore been identified:

Information Acquisition and Processing:

Guidance Energy and Materials (GEM):

Environment, Systems and Modelling (ESM):

69. The R&T Division is not involved in project management and does not have any research sites (laboratories, test and evaluation centres). Its role is to provide indications and guide national projects and those of private enterprises towards areas considered to be priorities for national and European defence. It also has a role in identifying potential cooperation between countries by looking for duplication. In certain cases, such duplication is voluntary and is the result of the wish to retain national research capabilities or to ensure security of supply, or can be explained by issues of national security or competitive advantage for players involved in defence RTD projects (enterprises and research centres).
70. As an example of practical application, the R&T Division is involved in a very promising area for security and defence: "robotics and automated systems in operational systems", which includes aerial, land and naval (on land or underwater) drones. In addition to being used in military sectors²⁴, reported in the media because of the use of American "Predator" attack aerial drones and "Global Hawk" high-altitude long-endurance observation drones in the Afghanistan and Iraq campaigns (in 2001 and 2003 respectively) these systems are also clearly useful in civilian security.
71. This is the case with border-monitoring operations, access to areas that are polluted or have been struck by disaster (fire, earthquake, flooding, for example), where a human presence would be risky, the disarming of explosive devices or the removal of dangerous materials (chemical, radioactive and radiological products), the detection of chemical, biological, nuclear and radiological contamination (whether accidental or caused by terrorism, for example).
72. Although in the defence aeronautics industries in the United States and Europe efforts are focused on three or four major (and expensive) national systems (X-47, Predator B and Global Hawk in the United States and Corax and Watchkeeper in the United Kingdom) or on cooperation (Neuron, the European technology demonstrator), in the security sector there is a wide range of projects and very widespread expertise.
73. Irrespective of the environment in which they are used - whether on land, sea or in the air - basic robotics technology and partially or fully autonomous systems are accessible and not subject to the secrecy requirements that usually apply in the defence industry (a civilian aerial drone has no real need for stealth, to carry ammunition or to scramble communications, for example).
74. The spread of this knowledge is a positive step, but it does encourage increased fragmentation, or even division, of the market (and of European capabilities) country by country. In all countries, even the smallest ones, there will always be a company capable of designing, developing and producing such systems or at least their control and guidance systems, very often in connection with computer language activities.
75. That company will also be very dependent on a single client, the state, in other words, the armed and security forces and civil protection services. Its national nature puts it in a strong position against foreign competitors but, very often, it will not have a great deal of margin to invest in expanding abroad or setting out to win over the international market.
76. And if one of these companies were able to make an important technological breakthrough, it would become an attractive prospect for major transnational groups that also represent the interests of major shareholder countries. This could reduce the technological or operational sovereignty that buying from a recognised national supplier would bring, and have practical consequences for the autonomy of the armed forces.
77. This is why it will be necessary, at European level, to consider implementing mechanisms for monitoring and supporting national small and medium-sized enterprises, and to promote their cross-border cooperation at European level, since they often have the same characteristics (size and capital structure), equivalent expertise and are generally dependent on a single client, the state. SMEs are also a very important source of skilled employment and human capital is a valuable asset that needs to be preserved (in order to maintain and develop national RTD capabilities).
78. The European Defence Agency can help in this (for all companies involved and in all countries), by carrying out the orientation and coordination role, set out in the seven guiding principles for the R&T Division's work, defined on 22 April 2005:

79. The guidelines and projects are well defined but the R&T Division and the Agency cannot do more than member states decide. However, member states are extremely demanding but wish to keep control of budgetary resources, in order to push their priorities, research centres and industries. This is the opposite side of the coin to the United States' Defense Advanced Research Projects Agency (DARPA), which has an annual budget of US$ 3 billion for defence RTD activities (in 2006), and has the resources to meet its mandate and mission, defined below as follows:

0. a better budgetary outlook, the Agency and its R&T Division are encouraged to cooperate more with the Commission in order to access the funds at the Commission's disposal in the area of security research, particularly with a view to the Seventh Framework Plan.

(b) Security and space: the European Commission's new border

80. The inclusion of a "Security and Space" chapter in the Seventh Framework Plan is the culmination of the Commission's security research efforts. The process begun in 2003-2004 will therefore be formalised and could later, subject to an improved political climate, be extended to defence research. In the draft Seventh Framework Plan, for which the final budgetary consultations and the drawing-up of agreements are still under way, security is linked to space issues. This step follows on logically from the Commission's decision to set up a group of experts, in June 2004, which produced a report entitled "Space and Security", published in March 2005.
81. The authors of the report underlined a characteristic feature of Europe that is common to many other sectors, including civilian sectors:

0. order to overcome this obstacle, the document presents a set of recommendations, some of which will be taken up by the Commission, in order to prepare the Seventh FPRD:

82. These recommendations are followed by a proposal concerning a short- and medium-term action plan for their implementation and a proposal to increase funding for space and security from 1 to 2 billion euros by 2012. This sum covers all national space programmes in the area of security and defence. The Commission, for its part, is also involved in funding and managing two important European space programmes that have direct implications for security and defence: the Galileo satellite navigation system and the GMES (Global Monitoring of Environment and Security) earth observation system.
83. On 6 April 2005, the Commission published the draft Seventh FPRD for 2007-2013. It makes provision for an ambitious budget of 72 billion euros - four times the amount of Community funding provided for the previous Framework Programme - and identifies security and space as one of nine priority areas. This area would have a budget of 3 960 billion euros for the duration of the FPRD, with an annual average estimated by the Commission of 570 million. This is a considerable sum compared with the funds allocated to the Preparatory Action projects or to the European Defence Agency (over 100 times the current defence R&T budget). However, it will depend on the future budgetary adjustments that result from the compromise reached during the December 2005 European Council on the Union's budget for the coming years.
84. The Seventh FPRD sets two major objectives for security and space:

0. basic references and the diagnosis of the current security (and defence) RTD situation are almost word for word the same as those made throughout 2003 and 2004, pointing to the need to implement the European Security Strategy (2003) and The Hague Programme (2004), and to the "fragmentation of efforts, the lack of critical mass of scale and scope and the lack of connections and interoperability".
85. The proposed solution is also a standard one: "coherence of [its] efforts", meant to encourage increased cooperation and concentration on "activities of clear added value to the national level. As a consequence, security research at Community level will reinforce the competitiveness of the European security industry". Seven action areas in the field of security are identified, four of which are specific and three of which have links to other civilian research areas:

86. With regard to the space sector, the emphasis is on the civilian aspects of space RTD. However, a number of activities and projects discussed also have major implications for security and defence:

87. Presented in this way, the chapter on "Security and Space" offers interesting and promising prospects for strengthening European capabilities and security research potential. If this move by the Commission can be coordinated with the European Defence Agency's work in defence research, the Union will have access to two important avenues for growth, to complement national capabilities and investment.

3. Perspectives

88. 2006 began with two major European conferences on security and defence research and technology. The first was organised by the European Defence Agency and took place in Brussels on 9 February 2006. The second was organised by the Austrian Presidency of the European Union and the European Commission in Vienna, Austria on 20 and 21 February 2006. Over and above the quality of the participants, discussions and presentations, these two events are also an indicator of the key role that this issue now plays in European policy making.

89. The Conference discussed two main issues: defence capabilities and defence RTD, and defence RTD and European technological bases. The speakers on these two issues made the following points:

90. Mr Solana, speaking as High Representative for the European Union's Common Foreign and Security Policy (CFSP) and Director of the European Defence Agency, called for greater and more effective expenditure on cooperative defence R&T projects, in order to increase percentage invested in cooperation projects from the current figure of 5% to 20% in the future. On this basis, the Agency's R&T budget would have to be increased by member states, which would decide on expenditure. The EDA would be responsible for administering the funds allocated by governments to projects on which they had decided to work jointly, which would place such intergovernmental cooperation projects once again within the EDA framework: it is an appealing solution, but not the one preferred by all countries, on account of the technology and investment required and issues of confidentiality and intellectual property rights, for example. Mr Solana also called for greater convergence between the Agency's and the Commission's security and defence R&T activities in compatible areas (such as software defined radio, for example).
91. Mr Verheugen, Vice-President of the European Commission, stressed in his speech the dual nature of security and defence technologies which he put forward as an argument for developing cooperation between the Commission and the EDA in this area of R&T. Noting that security and defence R&T was fragmented, given that countries did not often cooperate, he proposed coordinating "not only between the civil and the defence-related security research domains but also between the national and European level. No appropriate mechanism exists to undertake such coordination and this must be jointly developed over the coming months". In its opinion, the Commission had the primary role in this enterprise, which also called for cooperation with the Agency.
92. Mr Enders, President of the ASD²⁷ and Director General of the European company EADS, adopted a realistic approach, stressing that:

93. In order to implement these concepts, Mr Enders proposed setting up a European Defence Technology and Science Council, formed of eminent people representing governments, industry and interested organisations, on the model of that which exists for the civil aviation sector (ACARE²⁸ - Advisory Council for Aeronautics Research in Europe) and following the example of the United States' Defense Science Board, in order to build up the European experts and technology researchers network, already foreshadowed, in his view, by the European Defence Agency's "technological sectors" (CapTech), and to consider setting up a Technological Innovation Agency along the lines of DARPA in the United States. These measures would also be supported by a joint research budget within the EDA of 50 million euros for 2007²⁹.
94. Finally, Mr Enders called for the setting up of a "Group of Security and Defence Personalities", whose role would be:

95. General Sir Jack Deverell KCB (United Kingdom) pointed out that:

96. Mr François Lureau, the Chief of Defence Procurement (DGA, France), called for the formulation of a common European long-term defence R&T strategy, with the involvement of the EDA (representing governments), the Commission and the relevant industries. He also stressed that budgetary resources should be able to meet objectives.
97. Mr Vic Leverett, Strategy Director at the Italian company SELEX (Finmeccanica Group, sensors, radars, systems integration), stressed the importance of linking users with "innovators", an approach which was the same as the thinking behind the European Defence Agency's capabilities process. As a result, there was a need to encourage the use of technology demonstrators (very common practice in the United States, in a better budgetary context than that in Europe). The ability to adapt to new and changing threats and response time in the area of R&T (and development and production) are crucial factors.

98. Mr Giancarlo Grasso from the Italian company Finmeccanica pointed to an aspect often forgotten: "The most important issue is not developing new technology but having availability of the technology already developed". He also noted that European defence required a defence, industrial and technology base to provide it (from an R&T point of view) with the capabilities needed in order to take action, and called for increased cooperation in this area.
99. Mr Ake Svensson from the Swedish company SAAB, noted that while R&T cooperation should be developed, not all countries would be able to participate in all projects (because of human, technological and budgetary resource questions), hence the recourse to forms of restricted cooperation. Europe had to develop a long-term vision of its requirements since technological development took place over an extended cycle, of some 20-25 years.
100. Mr Paul Weissenberg of the European Commission's Directorate General for Enterprise and Industry, stressed that R&T was an instrument for achieving economic growth and that resources in this area were not well distributed across the European Union (and its member states). He also called for a reorganisation of national and European structures with responsibility for R&T in order to respond to new threats (in the area of security and defence) more effectively.

101. Organised by the Austrian Presidency of the European Union (January-June 2006) and the European Commission, the European Conference on Security Research took place in Vienna, Austria, on 20 and 21 February 2006. 1 000 individuals from European Union member states, drawn from industry, research circles, European organisations and from other countries³⁰ attended the conference, of which part of the aim was to take stock of the Preparatory Action begun in 2004 as well as to identify and lay down guidelines in this area for the future.
102. On the first day, three main topics were discussed: "Challenges for Europe", "Enhancing security through European policies" and "How can research contribute to increase security?". The third topic was divided into four sub-topics: protection of critical infrastructures, Europe's "perimeter" (borders), dealing with the unexpected (threats) and "Europe - Open and Secure" (internal security).
103. On the second day, a special meeting took place to discuss the European Security Research Programme (ESRP) and forthcoming initiatives, including the third call for proposals for 2006. The first part included a presentation of the Preparatory Action in the first two years and the rules for participation in 2006. During the second ("brokerage" event), various possible projects for 2006 were put forward (75 presentations in three hours)³¹.
104. In his address, Mr Verheugen, Vice-President of the European Commission, discussed the potential of the Seventh FPRD for providing greater impetus to security research and resolving the recurrent problem of "unwanted overlaps, duplicated funding and fragmented activities". One instrument of this Commission strategy that Mr Verheugen referred to, was the European Security Research Advisory Board (ESRAB).
105. The ESRAB was set up in July 2005, following the Commission's Decision on 22 April 2005. Formed of 50 representatives from European Union member states, industry and European organisations research units, its role is to "contribute to the content and implementation of the ESRP  (European Security Research Programme).
106. The ESRAB advises the Commission in six (non-exclusive) major areas³²:

107. According to Mr Verheugen, the ESRAB, cooperating closely with the European Defence Agency^33, is working to define a long-term European strategy for research in security and defence "in order to ensure that research funded by the EU is consistent, effective and efficient in spite of separate jurisdictions for civil and military security research", with the objective of ensuring better coordination between national security and defence research projects and those in progress in the European Commission framework. Mr Verheugen made the same observation as he did at the Agency's Conference in early February 2006, namely that "for concrete research, Member States, together with the Commission, should develop suitable coordination mechanisms in the coming months".
108. He also, however, admitted that, realistically, the budget allocated to Security and Space under the Seventh FPRD would be less than the initial budget forecast of approximately 570 million euros per year. Mr Verheugen spoke about 250 million euros for security research, pending the European Council's final decision on the Union's budget, which would be taken in June 2006 (15-16 June).
109. On 4 April, the European Parliament and the EU Austrian Presidency reached an agreement on the Union's budget for 2007-2013, under which the research sector (Seventh FPRD) would see its budget increased by 300 million euros³⁴. However, this amount is far from meeting the expectations that the Commission had prior to the intergovernmental agreement of December 2005. This led to a 30% reduction in the budget requested, down from over 70 billion euros to 47 781 billion (14 February 2006)³⁵ adjusted to 48 billion following the 4 April 2006 agreement.
110. Ministers for science and research from the European Union's member states, meeting in Graz, Austria, on 21 April 2006 approved this arrangement and the Austrian Minister, Mr Gehrer, announced that the total budget for the Seventh FPRD could be as much as 54 billion euros (2007-2013)³⁶.
111. Those attending the Conference also approved conclusions and recommendations³⁷:

112. This final document, a lengthy summary of the Conference, includes practical recommendations on the priority areas discussed on the first day: the protection of critical infrastructures, border protection, standardisation, integration and systems interoperability; crisis management and "the challenge of securing European citizens while protecting democratic values and civil liberties and keeping Europe as an open society"³⁸ .
113. The continuation of the European Security Research Programme, the results of the two Conferences in February 2006, both in the form of their conclusions and also through the strengthening and setting up of new working and information exchange networks and the preparation of the Seventh FPRD (the "Security and Space" chapter), form a series of positive initiatives in security and defence R&T.
114. Security and defence R&T is therefore part of the European Union's list of priorities for the coming years. Security and defence R&T is not merely a tool of economic power, it is a direct means of strengthening the Union's capability to take autonomous political action, in Europe and elsewhere in the world. However, it is subject to national governments, the contributors to the Community budget, in time developing a common strategic vision of security and defence that is more than just the sum (reduced to its lowest common denominator) of those interests and priorities that countries feel that they can and must share. Only thus can we realise our objective of a secure Europe in a better world.

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APPENDIX

Acronyms

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DRAFT RECOMMENDATION

on security research in Europe - reply to the annual report of the Council

(i) Considering that research and technological development (RTD) are two determinants of national and European economic growth;

(ii) Expressing its support for national and European initiatives to make the European Union an area of innovation and technological progress in the coming years;

(iii) Noting that, despite declarations adopted to that effect, the commitments made by the member states of the European Union since 2000 to increase the share of European GDP allocated to RTD to 3% per annum have not yet been honoured;

(iv) Noting the scattered and fragmented nature of national and European security and defence RTD, the duplication of effort and the few promising cooperative projects in this area;

(v) Stressing that security and defence RTD, at national level, is a strategic priority with direct consequences for political, economic and military autonomy and sovereignty;

(vi) Considering, therefore, that the primary responsibility for this area falls to states;

(vii) Noting, however, that in a context of low economic growth, the high cost of security and defence RTD limits the scope of action taken by national governments, calling for the development of intergovernmental cooperation on the basis of joint projects;

(viii) Noting, nevertheless, that current levels of cooperation are insufficient to meet the security and military capability requirements set out in European declarations on internal security in the European Union and the ESDP;

(ix) Appreciative of the initiatives taken by the European Commission since 2004 with a view to establishing a European security research programme;

(x) Noting that, in the current international context, the threat posed by terrorism, particularly radical Islamic terrorism, is ever present in Europe and attacks have again recently taken place in Turkey;

(xi) Supporting the measures taken by European governments and the European Union following attacks in Istanbul in 2003, in Madrid in 2004 and in London in 2005;

(xii) Noting that the continent of Europe has also suffered from forms of man-made or natural devastation jeopardising the security of its peoples, such as environmental pollution and natural disasters (frequent flash floods, storms, large-scale fires and epizootic disease);

(xiii) Considering that any approach to questions regarding Europe's internal security must take account of the diversity of the threats, not focus on any single one;

(xiv) Considering that such approaches can no longer be the responsibility of any one country but must be a joint effort by European countries, EU and NATO members, candidates and partners;

(xv) Considering that, from the outset, civilian and military resources must be brought into synergy to combat the various kinds of threats to the security of countries and peoples;

(xvi) Considering that security and defence RTD is an essential tool in the search for permanent solutions to improve and strengthen overall security;

(xvii) Considering that while governments define priorities and general guidelines for national and European security and defence, they need a solid Security and Defence Technological and Industrial Base (SDTIB) if they are to achieve their aims;

(xviii) Stressing the decisive role played by national or transnational companies and research centres in the field of technological and industrial innovation;

(xix) Noting that, despite the restructuring, mergers and consolidation that have occurred in the European security and defence industrial sector over the last 10 years, the European SDTIB is still at the outline stage;

(xx) Considering that, despite recent initiatives by the European Commission, particularly the Green Paper on Defence Procurement and the inclusion of a "Security and Space" chapter in the European Union's Seventh Framework Programme (2007-2013) on Research, Technological Development and Demonstration, security and defence RTD must remain the responsibility - albeit the shared responsibility - of member states, who alone are responsible for the security of their national populations;

(xxi) Considering that Community action should continue to be governed by the principle of subsidiarity and not seek to substitute or marginalise nation states;

(xxii) Considering that, for their part, member states should invest more wisely in security and defence RTD and do so in a spirit of mutual cooperation, in order to avoid unnecessary duplication and dispersal of budgetary resources;

(xxiii) Considering that the European Defence Agency must be the primary - although not the sole - framework for developing a European defence industrial strategy and a European security and defence RTD strategy;

(xxiv) Supporting, in that connection, the commitment made in Innsbruck by the majority of EU member states involved in the EDA to setting up a common research fund for the Agency, the amount, administration and supervision of which is yet to be decided;

(xxv) Considering, following the same train of thought, that the Agency has to have the necessary human and material resources and a budget adequate to allow it to be the means of implementing such strategies, in such a way as to strengthen its hand vis-à-vis the European Commission, and the resources and influence it wields, in order to achieve a better balance between their two roles;

(xxvi) Welcoming the research and technology (R&T) work undertaken by the WEAO Research Cell from October 2004 to December 2005 as discussed in the second part of the fifty-first annual report of the Council and, in particular, the signing of contracts to a total value of 149 million euros, representing by far the highest-value project portfolio WEAO has held since it was set up;

(xxvii) Noting that the transfer of WEAO activities, particularly in the area of research and technology, to the European Defence Agency (EDA) has again been delayed through lack of progress in concluding administrative arrangements between the EDA and Norway and Turkey,

1. Cooperate to a greater extent on security and defence research and technological development projects and programmes;
2. Ensure that the distribution of national security and defence RTD budgetary resources is such as to encourage the promotion of cooperative programmes, including with non-European countries with recognised capabilities in those areas, and in particular allies and friends such as the United States, Canada and Israel;
3. Support the Commission's subsidiary action in the area of security research, in particular, by making provision in law for increased flexibility in the transfer of technology, information and expertise between countries and companies within the European Union;
4. Develop the European Defence Agency's ability to act in the area of security and defence RTD and provide it with the financial means to launch strategic programmes, determined jointly by the participating member states;
5. Extend the Agency's remit to space matters with security and defence implications, as the European Commission has done by including a "Security and Space" chapter in the European Union's Seventh FPRD (2007-2013);
6. Ensure that WEAO is not dissolved before the EDA has concluded satisfactory arrangements with Norway and Turkey guaranteeing those two countries conditions for cooperation equivalent to those that they currently enjoy within the WEAO framework;
7. Keep the Assembly informed of developments on national, European and international security and defence RTD programmes in which European countries and companies participate.

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AMENDMENTS 1-5³⁹

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tabled by Mr Mendes Bota, Rapporteur,

(Portugal, Federated Group)

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1. After recital (xxi) of the preamble to the draft recommendation, insert the following new recital:

2. After paragraph 5 of the draft recommendation proper insert the following new paragraph:

3. After paragraph 6 of the draft recommendation proper, add the following new paragraph:

4. After paragraph 6 of the draft recommendation proper, add the following new paragraph:

5. After paragraph 6 of the draft recommendation proper insert the following new paragraph:

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¹ Adopted unanimously by the Committee on 16 May 2006.

² Adopted by the Assembly on 21 June 2006 at the 4^th sitting on the basis of the amended draft recommendation.

³ This document is discussed in a report: "The United States National Security Strategy and its consequences for European defence", submitted by Renzo Gubert, Rapporteur (Italy, Federated Group) on behalf of the Defence Committee, to the Assembly's June 2003 session, Document 1824, Recommendation 726, 4 June 2003; www.assembly.weu.int

⁴ This includes 1 230 billion euros for civilian nuclear research within the framework of EURATOM; source: European Commission, Community Research and Development Information Service (CORDIS) "The Sixth Framework Programme in brief"; www.cordis.lu

⁵ On 14 and 15 December 2001, the European Council, meeting in Laeken, Belgium, had launched the Convention on the Future of Europe project leading, in 2003, to the draft Treaty establishing a Constitution for Europe.

⁶ "The Sixth Framework Programme in brief"; www.cordis.lu

⁷ "Defence Industrial Strategy, Defence White Paper", United Kingdom Ministry of Defence, December 2005; www.mod.uk

⁸ European Commission Joint Research Centre, www.jrc.cec.eu.int. The information concerning budget and staffing is from 2004.

⁹ Eight countries in total: Bulgaria, Iceland, Israel, Liechtenstein, Norway, Romania, Switzerland and Turkey.

¹⁰ For an analysis of this issue, see "The European defence equipment market: Article 296 of the Treaty establishing the European Community and the European Commission's Green Paper - reply to the annual report of the Council", submitted by Franco Danieli (Italy, Liberal Group), Rapporteur, on behalf of the Technological and Aerospace Committee; Document 1917, Recommendation 769, 6 December 2005, www.assembly.weu.int

¹¹ In total, 28 personalities signed the final document, the Rapporteur for which was Burkard Schmitt, Assistant Director of the European Union Institute for Security Studies, set up by the WEU in 1989 and which became an agency of the European Union in 2000-2001. They included: nine industry representatives, four representatives from the fields of scientific, defence (the Director General for the Defence Industry and Defence Research and Technology from the Greek Ministry of Defence), policy and strategy and social science research, four Members of the European Parliament, four representatives from intergovernmental organisations (WEAG/WEAO, EUROCONTROL, OCCAR and the European Space Agency), two Commissioners (Messrs Busquin and Liikanen), WEU Secretary-General, Secretary-General of the Council of the European Union and High Representative for the CFSP, Javier Solana, a former President (Finland), a former Prime Minister (Sweden) and a Lieutenant-General from the Belgian Ministry of Defence.

¹² The report was published four days after the terrorist attacks in Madrid, which reinforced the general feeling of urgency as regards consolidation of European internal security capabilities.

¹³ This last reference is to Articles 40 and 42 of the draft Treaty establishing a Constitution for Europe.

¹⁴ Terrorism, the proliferation of weapons of mass destruction, regional conflicts, state failure and organised crime.

¹⁵ 2003 figures.

¹⁶ The ultimate objective being, according to the report's authors, "to bring the combined EU (Community, national and intergovernmental) security research investment level close to that of the US."

¹⁷ Set up by WEU in 1996, the Western European Armaments Organisation coordinates intergovernmental cooperation of defence research and technology for its 19 member countries. Current projects account for approximately 300 million euros in public and private (industrial) investment. The transfer of activities from WEAO's Research Cell to the European Defence Agency (EDA) is currently underway and likely to be completed by summer 2006.

¹⁸ "Conditions for European defence RTD collaboration", Stefan Törnqvist, FOI-Swedish Defence Research Agency; Six Countries Programme (6CP) workshop "Linking Defence and Security R&D to Innovation: the challenge ahead"; Brussels, 19 November 2004; http://www.6cp.net

¹⁹ For example, the United Kingdom's Defence Industrial Strategy (December 2005) or the measures taken by Luxembourg and French public authorities to thwart Mittal Steel's takeover bid for Arcelor.

²⁰ 18 Union countries (member states and accession candidates) had their projects accepted, with Germany submitting the largest number of bids. In terms of the numbers of projects and supporting activities to be selected, the United Kingdom, France and Germany were the most successful, followed by Italy, the Netherlands, Sweden, Spain, Belgium and Finland. 1 206 companies, 307 of which were small and medium-sized enterprises, submitted bids.

²¹ "13 new security research projects to combat terrorism", European Commission, Community Research and Development Information Service. The percentage of small and medium-sized enterprises submitting proposals has fallen from 25% in 2004 to 23% in 2005. SMEs account for 11% of projects accepted.

²² With the exception of Denmark, which, for domestic political reasons has not participated in the Union's CFSP since 1993.

²³ The code is based on the voluntary acceptance by countries of its provisions, whose application of is not subject to scrutiny by the European Defence Agency but is a matter of interpretation solely for the countries concerned.

²⁴ For a discussion of these systems, see "Unmanned combat air vehicles and military aeronautics of the future", submitted by Mr Braga, Rapporteur, on behalf of the Technological and Aerospace Committee of the WEU Assembly; Doc. 1884, Recommendation 754, 30 November 2004, www.assembly.weu.int

²⁵ www.darpa.mil

²⁶ Approximately 300 people, representing governments, industry and international organisations attended this first major conference organised by the European Defence Agency on R&T; consult www.eda.eu.int for details of speeches and documents.

²⁷ Aerospace and Defence Industries Association of Europe; www.asd-europe.org

²⁸ Set up in June 2001 following the Le Bourget Airshow (France), the Advisory Council for Aeronautics research in Europe is formed of approximately 40 personalities from governments, industry, universities and scientific research and European organisations (European Commission, EUROCONTROL). www.acare4europe.org

²⁹ The decision by the majority of member states on the Agency's Steering Board to set up a fund of this kind, announced following the meeting in Innsbruck (Austria), is a step in this direction. The amount of the fund should be approved in June 2006 at the close of the Austrian Presidency of the European Union.

³⁰ Australia, Bulgaria, Croatia, Israel, Norway, Romania, Russia, Switzerland, Turkey and the United States.

³¹ The documents from this second day are available on the European Commission's Internet site: "Security Research Conference in Vienna", Brokerage event PASR-2006, 21 February 2006.

http://europa.eu.int/comm/enterprise/security/events/vienna_2006_brokerage.htm

³² "Commission Decision of 22 April 2005 establishing the European Security Research Advisory Board", 2005/516/EC, Official Journal of the European Union, L 191/70, 22 July 2005, europa.eu.int

³³ The Head of the European Defence Agency's Research and Technology Directorate, Bertrand de Cordoue, also serves on the ESRAB.

³⁴ "Green light for 2007-2013 Financial Perspectives", European Parliament Press Release, 5 April 2006, www.europarl.eu.int

³⁵ European Commission: "Multiannual Financial Framework 2007-2013", Sheet no. 94, 14 February 2006, www.eurosfaire.prf.fr

³⁶ "Gehrer: Agreement on allocation of the funding for the biggest ever EU research programme within reach"; Austrian Presidency of the European Union, Press Release 21 April 2006, www.eu2006.at

³⁷ Conclusions of the European Conference on Security Research organised by the Austrian Presidency of the European Union and the European Commission, 20-21 February 2006, Vienna, Austria, www.bmvit.gv.at

³⁸ Conclusions of the European Conference on Security Research organised by the Austrian Presidency of the European Union and the European Commission, 20-21 February 2006, Vienna, Austria, www.bmvit.gv.at

³⁹ See 4^th sitting, 21 June 2006 (Amendments adopted).