US embassy cable - 04BRUSSELS2027

C O N F I D E N T I A L SECTION 01 OF 03 BRUSSELS 002027 
 
SIPDIS 
 
E.O. 12958: DECL: 05/10/2014 
TAGS: PREL, PINS, TSPL, EAGR, MCAP, PARM, ETTC, MASS, EUN, NATO, USEU BRUSSELS 
SUBJECT: EU ARMS AGENCY: STATE OF PLAY 
 
 
Classified By: USEU External Affairs Officer Andrew Erickson 
for reasons 1.5 (b) and (d). 
 
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Summary 
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1.  (C) The EU continues to develop the EU Arms Agency 
(EUAA), and hopes to have it up and running by the final 
quarter of 2004.  The agency's mission is to develop a 
systematic EU approach to addressing ESDP capability needs. 
EU officials note that close coordination with NATO will be 
required if the agency is to be successful, and fault current 
EU-NATO dialogue on addressing the capabilities shortfalls of 
EU members.  As the EUAA moves off the drawing board and into 
operation, we need to respond rapidly to ensure appropriate 
access to the agency as it evolves.  With this in mind, we 
have nominated one of the key officials in the EU's planning 
team for a VolVis program to the US; we suggest aggressive 
engagement with him in Washington to ensure that he 
understands US redlines and desiderata for the arms agency, 
and the rationale behind our thinking.  End summary. 
 
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Modalities 
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2.  (U) On the basis of a tasking from the November 17/18 
GAERC, the EU arms agency establishment team (AET) is now 
meeting regularly in Brussels to develop an outline of the 
new EU institution.  It should be noted that the working name 
of the new organization is now the "European Arms Agency". 
On April 28 the AET issued a report on progress to date. 
This report remains in draft until approved by the Council. 
It is on the agenda for the May 17-18 General Affairs Council 
(GAERC). 
 
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What's Planned? 
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3.  (C) The GAERC assigned the arms agency four functions, 
including "defense capabilities development, armaments 
cooperation, the European defense technological and 
industrial base (DTIB) and defense equipment market (EDEM), 
and research and technology."  Specifically, the AET has 
identified the need to address "an insufficiently systematic 
or comprehensive approach to identifying ESDP's capability 
requirements," "a lack of clear future needs on which 
collaborations...can be built", and "a fragmented DTIB, which 
suffers from a lack of economies of scale and too much 
duplication; from under-funding of R&T, and from a 
demand-side and a market which remain largely national rather 
than European in scale." 
 
4.  (C) Comment: it is the last point which bears particular 
emphasis, according to Paul Collins, a leading member of the 
AET, for it is in rationalizing the EU arms market that 
improved capabilities can be obtained from existing 
expenditure.  We note, however, that placing responsibility 
for harmonizing defense industries, establishing ESDP 
acquisition requirements and priorities, and assessing EU 
force capabilities could lead to a "command economy" for EU 
defense backed up by Council decisions that would be binding 
on member-states.  In other words, there is a strong 
potential to institutionalize "fortress Europe" in armaments. 
 A Dutch PSC representative told us recently that the member 
states divide roughly into two camps on EUAA development: 
those who emphasize using the organization to increase 
capabilities, and those whose interest is more in line with 
"Fortress Europe" thinking.  End comment. 
 
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A need for close 
EU-NATO dialogue 
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5.  (C) Collins dismissed our question about why the need for 
an EU arms agency exists, given NATO's role.  The EU has 
already made a decision to proceed, he asserted, so this was 
a pointless question.  The more important question, for 
Collins, was how to improve NATO-EU cooperation, particularly 
given the "disastrous" functioning of the EU-NATO 
capabilities group.  Collins argued that only "a real change 
of attitude" on the part of NATO would make NATO influence 
possible with the European Arms Agency. 
 
6.  (C) While scathing in his dismissal of the current 
EU-NATO capabilities dialogue, Collins underscored that a 
NATO leadership role was "essential" if the European Arms 
Agency was to work in a way that strengthened transatlantic 
cooperation on capabilities.  On the other hand, the reality 
of the arms agency was that there would be an EU approach to 
research, development, and procurement, and NATO would have 
to learn to live with this.  The key was determining the 
nature of the relationships between the EU and NATO.  In this 
regard, it should be noted that the EU has rejected the idea 
of non-member states participating in armaments agency 
decision-making; the EU position is that "transparency can be 
secured" through consultative roles for non-member states. 
 
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Thinking big... 
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7.  (C) Regardless of the evolution of its relationship with 
NATO, the European Arms Agency is rapidly staffing up, and 
expects to have 26 personnel by the final quarter of 2004. 
Budgetary estimates for 2004-2005 will be largely driven by 
personnel and accommodation costs and will be approximately 
2.4 million euros in 2004 and some 25 million euros in 2005 
(including 10 million for non-recurring agency start-up 
costs). 
 
8.  (C) According to the draft planning document, the agency 
will be governed by bi-annual defense ministerial level 
meetings ("perhaps back-to-back with GAERCs in November and 
May").  On the question of the attendance of the NATO SYG: 
the draft AET document says that NATO SYG attendance "will 
usually be appropriate."  It should be noted that according 
to the draft AET document, there "will be a need for 
decisions by the Council" on an occasional basis.  "Such 
occasions might be "when a substantive decision binding on 
all participating member states was at issue", "when 
decisions...involved competences beyond those of defense 
ministers", and "when the additional political force of a 
decision by the Council seemed desirable." 
 
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...but starting small 
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9.  (C) The AET has also sketched out some initial priorities 
for work in 2005 (following the achievement of operational 
status in 2004).  These 2005 priorities include: 
-- supporting work on the headline goal; 
-- developing more comprehensive and systematic approaches to 
capabilities development; 
-- assuming oversight of ECAP (the European Capabilities 
Action Plan); 
-- beginning work on a long-term vision; and, 
-- supporting work on collaborative activities. 
 
10.  (C) As a specific example of the sort of initial efforts 
that the European Arms Agency might undertake, the AET 
informally proposed launching an initiative in the SATCOM 
area "with the aim of suggesting a way ahead.  This area is 
considered essential for interoperability and effective 
command and control of EU forces.  The scope is to analyze 
the requirements, possible options and contributions of 
existing SATCOM capacities.  Proposals will include R & T 
focus, cooperative schemes (operational and equipment) and 
industrial ramifications." 
 
11.  (C) We asked what would prevent the European Arms Agency 
from simply becoming a tool for a few powerful EU countries 
(such as France) to impose their armaments standards upon the 
entire EU.  Collins (strictly protect) replied that "the 
reality of European capabilities today is that to the extent 
that most EU countries have capabilities, they're niche 
capabilities.  We need to ensure that we plan our procurement 
so that the countries that make the best gas masks -- for 
example -- end up setting the standard for that capability. 
This will not reinforce French dominance, particularly." 
 
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Comment: we need 
to engage now for 
maximum influence 
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12.  (C) The agency establishment team has been pushing 
forward aggressively with developing the parameters of the 
new arms agency.  Paul Collins, who is one of the small group 
of officials charged with articulating the somewhat 
ill-defined EU vision of what the Arms Agency will ultimately 
be, has been a key interlocutor of this mission as the EU's 
vision evolves.  Post has nominated Collins for a VolVis 
program, and he has received the approval of the AET to go if 
our nomination is approved in Washington.  We believe that 
this is an extraordinarily important opportunity for us to 
engage with a key AET interlocutor before the outlines of the 
arms agency get set in stone.  We recommend that Washington 
interlocutors with equities in this issue be prepared to 
engage Collins during his upcoming visit, and particularly, 
that Collins eventually departs Washington with a full 
understanding of the need to get the development of the 
European Arms Agency right.  End comment.  Schnabel