# C_2004112EN.01001401.xml

| 30.4.2004 | EN | Official Journal of the European Union | C 112/14 |
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30.4.2004

EN

Official Journal of the European Union

C 112/14

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Opinion of the European Economic and Social Committee on the ‘communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions — A coherent Framework for Aerospace — a Response to the STAR 21 Report’

(COM(2003) 600 final)

(2004/C 112/04)

On 13 October 2003, in accordance with Article 262 of the Treaty establishing the European Community, the Commission decided to consult the European Economic and Social Committee on the above-mentioned communication.

The Section for the Single Market, Production and Consumption, responsible for preparing the Committee's work on the subject, adopted its opinion on 10 March 2004. The rapporteur was Mr Buffetaut.

At its 407th plenary session of 31 March and 1 April 2004 (meeting of 31 March), the European Economic and Social Committee unanimously adopted the following opinion by 100 votes to none:

th

1.   Introduction

| 1.1 | This Commission document is above all a reaction, and in fact a rehash of the conclusions of the Aerospace Advisory Group's Strategic Aerospace Review for the 21st Century (STAR 21). |
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1.1

This Commission document is above all a reaction, and in fact a rehash of the conclusions of the Aerospace Advisory Group's Strategic Aerospace Review for the 21st Century (STAR 21).

| 1.2 | The Commission links this reflection to the conclusions of the European Councils of Cologne, Lisbon, Barcelona and Thessalonica. |
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1.2

The Commission links this reflection to the conclusions of the European Councils of Cologne, Lisbon, Barcelona and Thessalonica.

| 1.3 | It points out that the aerospace industry is a key sector in achieving the strategic and economic goals that the European Union has set itself. The sector is very high-tech and highly-skilled, and operates in both the civil and military field. |
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1.3

It points out that the aerospace industry is a key sector in achieving the strategic and economic goals that the European Union has set itself. The sector is very high-tech and highly-skilled, and operates in both the civil and military field.

| 1.4 | So, what is the situation of the sector in the EU? |
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1.4

So, what is the situation of the sector in the EU?

| 1.4.1 | The aerospace industry is a cyclical and fluctuating activity. In the civil field the market depends on the purchase programmes of airlines, which can be affected by external events such as terrorist actions, which may seriously disturb activity. |
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1.4.1

The aerospace industry is a cyclical and fluctuating activity. In the civil field the market depends on the purchase programmes of airlines, which can be affected by external events such as terrorist actions, which may seriously disturb activity.

| 1.4.1.1 | In the military field, it is determined by budget choices and the purchasing policies of states, which are themselves determined by geo-strategic data. |
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1.4.1.1

In the military field, it is determined by budget choices and the purchasing policies of states, which are themselves determined by geo-strategic data.

| 1.4.1.2 | Today, the manufacture of large civil aircraft underpinned by the competitiveness of Airbus is and will remain the key factor in the development of the aerospace industry. |
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1.4.1.2

Today, the manufacture of large civil aircraft underpinned by the competitiveness of Airbus is and will remain the key factor in the development of the aerospace industry.

| 1.4.1.3 | The defence sector is more uncertain. The number of new programmes is limited. However, the European aerospace industry remains strong and has a strong presence on the helicopter market. |
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1.4.1.3

The defence sector is more uncertain. The number of new programmes is limited. However, the European aerospace industry remains strong and has a strong presence on the helicopter market.

| 1.4.1.4 | The sector has been affected by the uncertainty of the European market and the complex and cumbersome nature of military decision-making, and so European companies are turning to the much larger and more stable US defence market, despite the protectionist rules of the USA and without sufficient guarantees of any technological benefits. |
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1.4.1.4

The sector has been affected by the uncertainty of the European market and the complex and cumbersome nature of military decision-making, and so European companies are turning to the much larger and more stable US defence market, despite the protectionist rules of the USA and without sufficient guarantees of any technological benefits.

| 1.4.1.5 | The space sector is going through a difficult phase. Mainly civil, it has suffered greatly from the fall in demand for telecommunications and is now facing strong competition in the launcher market, which is protected in the USA and is facing the entry of new actors on the world scene. The plans of the USA and NASA are geared to current requirements; this provides an opportunity to bring about an upturn in Europe. |
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1.4.1.5

The space sector is going through a difficult phase. Mainly civil, it has suffered greatly from the fall in demand for telecommunications and is now facing strong competition in the launcher market, which is protected in the USA and is facing the entry of new actors on the world scene. The plans of the USA and NASA are geared to current requirements; this provides an opportunity to bring about an upturn in Europe.

| 1.4.1.6 | Aerospace is a dual sector, whose skills and techniques can have civil and military applications. One of its weaknesses is the inadequacy and fragmentation of the defence market. |
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1.4.1.6

Aerospace is a dual sector, whose skills and techniques can have civil and military applications. One of its weaknesses is the inadequacy and fragmentation of the defence market.

1.4.2   Findings of the STAR 21 report

| 1.4.2.1 | The report stresses the importance of:






  — | better access to non-EU markets and honest and correct application of trade agreements; |
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1.4.2.1

The report stresses the importance of:

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better access to non-EU markets and honest and correct application of trade agreements;

| — | greater employee mobility in the sector; |
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greater employee mobility in the sector;

| — | better coordination of research and development efforts; |
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better coordination of research and development efforts;

| — | the leading role that the EU should play in regulating civil aviation; |
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the leading role that the EU should play in regulating civil aviation;

| — | better cooperation between the ESA and the EU and the launching of the GALILEO programme. |
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better cooperation between the ESA and the EU and the launching of the GALILEO programme.

| 1.4.2.2 | Finally, the report stresses the need to re-examine conditions on the defence market. |
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1.4.2.2

Finally, the report stresses the need to re-examine conditions on the defence market.

1.4.3   The Commission's approach and proposals

| 1.4.3.1 | The Commission identifies the questions that it considers essential, sector-by-sector. |
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1.4.3.1

The Commission identifies the questions that it considers essential, sector-by-sector.

1.4.4   Defence

| 1.4.4.1 | The Commission deplores the fragmentation of the market, which is due to the fact that defence lies at the very heart of states' sovereignty and to the particular features of the sector (confidentiality, security of supplies, political criteria in purchase decisions...). It stresses that Europe spends less on defence than the USA, and that market fragmentation makes it impossible to get the most out of investments. |
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1.4.4.1

The Commission deplores the fragmentation of the market, which is due to the fact that defence lies at the very heart of states' sovereignty and to the particular features of the sector (confidentiality, security of supplies, political criteria in purchase decisions...). It stresses that Europe spends less on defence than the USA, and that market fragmentation makes it impossible to get the most out of investments.

| 1.4.4.2 | For the future, it recommends that this fragmentation of demand be combated, since it is impossible to achieve profitable production levels with programmes that are specific to only one state.
  It proposes that military requirements be harmonised and feels that the setting-up of a ‘European Armaments, Research and Military Capabilities Agency,’ as part of a European security and defence policy, would help create a sufficiently important and coherent market to maintain and develop our aerospace industry and enter into a credible dialogue with the USA. |
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1.4.4.2

For the future, it recommends that this fragmentation of demand be combated, since it is impossible to achieve profitable production levels with programmes that are specific to only one state.

It proposes that military requirements be harmonised and feels that the setting-up of a ‘European Armaments, Research and Military Capabilities Agency,’ as part of a European security and defence policy, would help create a sufficiently important and coherent market to maintain and develop our aerospace industry and enter into a credible dialogue with the USA.

| 1.4.4.3 | The Commission also feels that the initiatives taken by the defence ministers of France, Germany, Italy, Sweden, Spain and the United Kingdom could usefully be extended to the whole of the EU. |
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1.4.4.3

The Commission also feels that the initiatives taken by the defence ministers of France, Germany, Italy, Sweden, Spain and the United Kingdom could usefully be extended to the whole of the EU.

1.4.5   Space

| 1.4.5.1 | The Commission points out that there is no European or multinational structure responsible for security and defence-related space programmes, a lack which is cruelly felt when there is a sharp and sustained downturn in the civil commercial market. This situation is largely due to the provisions of the ESA Treaty, which strictly applies the Convention on Space prohibiting the use of space for military purposes. The result is that, unlike the USA, Europe does not consolidate its civil and commercial space activity with space activity in the field of defence that is institutionally supported and therefore not subject to commercial risks. This is all the more regrettable since space technologies are of a dual nature, and can therefore have both civil and military applications. |
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1.4.5.1

The Commission points out that there is no European or multinational structure responsible for security and defence-related space programmes, a lack which is cruelly felt when there is a sharp and sustained downturn in the civil commercial market. This situation is largely due to the provisions of the ESA Treaty, which strictly applies the Convention on Space prohibiting the use of space for military purposes. The result is that, unlike the USA, Europe does not consolidate its civil and commercial space activity with space activity in the field of defence that is institutionally supported and therefore not subject to commercial risks. This is all the more regrettable since space technologies are of a dual nature, and can therefore have both civil and military applications.

| 1.4.5.2 | For the future, it calls for the introduction of an overall European policy and for more effective coordination, so that the European space sector does not lose its current capabilities and technological excellence. |
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1.4.5.2

For the future, it calls for the introduction of an overall European policy and for more effective coordination, so that the European space sector does not lose its current capabilities and technological excellence.

1.4.6   Research

| 1.4.6.1 | Aerospace research clearly needs to be better coordinated. Some interesting civil initiatives have been taken (Advisory Council for Aeronautical Research in Europe), but the situation is not satisfactory as regards defence. |
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1.4.6.1

Aerospace research clearly needs to be better coordinated. Some interesting civil initiatives have been taken (Advisory Council for Aeronautical Research in Europe), but the situation is not satisfactory as regards defence.

| 1.4.6.2 | For the future, the Commission thinks it essential to ensure the long-term stability of the structures for funding research. It also wants to develop an overall plan for research and development and plan research programmes. |
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1.4.6.2

For the future, the Commission thinks it essential to ensure the long-term stability of the structures for funding research. It also wants to develop an overall plan for research and development and plan research programmes.

1.4.7   European regulation of civil aviation

| 1.4.7.1 | The Commission wants the European Aviation Safety Agency to become operational as quickly as possible and transatlantic negotiations to be conducted, in particular on certifications. |
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1.4.7.1

The Commission wants the European Aviation Safety Agency to become operational as quickly as possible and transatlantic negotiations to be conducted, in particular on certifications.

| 1.4.7.2 | It wants air safety issues to be handled at European level and the EU to play an active part in the relevant international organisations. |
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1.4.7.2

It wants air safety issues to be handled at European level and the EU to play an active part in the relevant international organisations.

| 1.4.7.3 | It also calls for the creation of a civil-military interface to improve the use of airspace. |
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1.4.7.3

It also calls for the creation of a civil-military interface to improve the use of airspace.

1.4.8   Market access

| 1.4.8.1 | The Commission mainly considers issues related to the commercial difficulties with the USA over defence equipment, due in particular to US protective rules and export controls. |
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1.4.8.1

The Commission mainly considers issues related to the commercial difficulties with the USA over defence equipment, due in particular to US protective rules and export controls.

2.   General comments

| 2.1 | STAR 21 and the Commission make a number of objective remarks that merit support. The aerospace industries clearly belong to a hi-tech sector whose advanced skills and technologies may have a valuable impact on other sectors. In this respect, they have a major role to play in enabling the EU to achieve the Lisbon goal: ‘to become 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.’ |
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2.1

STAR 21 and the Commission make a number of objective remarks that merit support. The aerospace industries clearly belong to a hi-tech sector whose advanced skills and technologies may have a valuable impact on other sectors. In this respect, they have a major role to play in enabling the EU to achieve the Lisbon goal: ‘to become 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.’

| 2.2 | Market fragmentation in the defence aerospace industry is due to the very nature of the sector and its sovereign activity of defence, i.e. possibly war. So, it is logical that states have wanted to ensure security of supplies and the secrecy of technologies by using national companies, often with close links to the state. The secrecy of technologies is currently ensured by means of various bilateral and multilateral agreements. |
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2.2

Market fragmentation in the defence aerospace industry is due to the very nature of the sector and its sovereign activity of defence, i.e. possibly war. So, it is logical that states have wanted to ensure security of supplies and the secrecy of technologies by using national companies, often with close links to the state. The secrecy of technologies is currently ensured by means of various bilateral and multilateral agreements.

| 2.3 | This vision clashes with the logic of an alliance and the fact that the huge investments of the defence industries can no longer be guaranteed a return from the national markets which are their main support, especially at a time of budget restrictions. Moreover, international competition is particularly keen from US firms, which are supported by a vast and stable national market. |
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2.3

This vision clashes with the logic of an alliance and the fact that the huge investments of the defence industries can no longer be guaranteed a return from the national markets which are their main support, especially at a time of budget restrictions. Moreover, international competition is particularly keen from US firms, which are supported by a vast and stable national market.

| 2.4 | The Commission's proposals to overcome market fragmentation are interesting, but too much trust seems to be placed in such structures as a European armaments agency. In the field of defence, which by its very nature is a question of national sovereignty, nothing is possible without a stated political will and this can only be stated as part of a European world policy that is clear and shared by all, which is not the case. Moreover, in a hi-tech activity that calls for skills and know-how of very high level, it is advisable to make sure that the cooperation planned does indeed generate technological added value and does not lead to skill dilution. |
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2.4

The Commission's proposals to overcome market fragmentation are interesting, but too much trust seems to be placed in such structures as a European armaments agency. In the field of defence, which by its very nature is a question of national sovereignty, nothing is possible without a stated political will and this can only be stated as part of a European world policy that is clear and shared by all, which is not the case. Moreover, in a hi-tech activity that calls for skills and know-how of very high level, it is advisable to make sure that the cooperation planned does indeed generate technological added value and does not lead to skill dilution.

| 2.5 | The EESC would point out that a recent defence agreement signed between France, Germany and the UK should lead to operational aspects in 2005. This could open up some interesting perspectives for industry, as the British, French and German markets combined would achieve the critical mass necessary for our military aircraft industry. |
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2.5

The EESC would point out that a recent defence agreement signed between France, Germany and the UK should lead to operational aspects in 2005. This could open up some interesting perspectives for industry, as the British, French and German markets combined would achieve the critical mass necessary for our military aircraft industry.

| 2.6 | The latest developments regarding space (framework agreement with the ESA, provisions of the draft treaty instituting a constitution for the European Union which are not at issue in the IRC's failure) are along the lines wished by the Commission and the EESC. The basic question is whether the budget appropriations are sufficient for the EU and Member States to have the means to achieve their space ambitions. This is the main issue of the White Paper, which is a quality document despite a glaring weakness regarding broadband telecommunications. |
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2.6

The latest developments regarding space (framework agreement with the ESA, provisions of the draft treaty instituting a constitution for the European Union which are not at issue in the IRC's failure) are along the lines wished by the Commission and the EESC. The basic question is whether the budget appropriations are sufficient for the EU and Member States to have the means to achieve their space ambitions. This is the main issue of the White Paper, which is a quality document despite a glaring weakness regarding broadband telecommunications.

| 2.7 | The Commission proposals on the European regulation of civil aviation appear justified both at a practical level and in terms of safety and consistency. Moreover, this could only strengthen our position in the transatlantic negotiations. |
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2.7

The Commission proposals on the European regulation of civil aviation appear justified both at a practical level and in terms of safety and consistency. Moreover, this could only strengthen our position in the transatlantic negotiations.

3.   Specific comments

3.1   Defence aerospace industry

| 3.1.1 | The EESC notes the difference between what the European civil aircraft industry has been able to achieve with Airbus and the relative weakness of the military aircraft industry due to the fragmentary nature of the market. It feels that this is due to the lack of an overall political plan for Europe's defence. This situation only reinforces the dominance of the USA, which has been able to use its defence agreements with various countries for the benefit of its own industries, thus making the world market almost a captive one. The aerospace industry is a concentration of the strategic technologies that determine future economic growth. It therefore fits in perfectly with the Lisbon strategy, which aims to make the EU ‘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’. In addition, the technological independence of European companies in the defence-related sectors is one of the preconditions for the Em's independence. |
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3.1.1

The EESC notes the difference between what the European civil aircraft industry has been able to achieve with Airbus and the relative weakness of the military aircraft industry due to the fragmentary nature of the market. It feels that this is due to the lack of an overall political plan for Europe's defence. This situation only reinforces the dominance of the USA, which has been able to use its defence agreements with various countries for the benefit of its own industries, thus making the world market almost a captive one. The aerospace industry is a concentration of the strategic technologies that determine future economic growth. It therefore fits in perfectly with the Lisbon strategy, which aims to make the EU ‘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’. In addition, the technological independence of European companies in the defence-related sectors is one of the preconditions for the Em's independence.

| 3.1.2 | The EESC points out that as regards military aviation (as with space activities), the USA uses various instruments or legal concepts that in fact amount to protectionist practices. It therefore asks the Commission, which is in charge of the Em's commercial policy, to take action against these practices, particularly in the WTO, to restore our trade balance in this area. |
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3.1.2

The EESC points out that as regards military aviation (as with space activities), the USA uses various instruments or legal concepts that in fact amount to protectionist practices. It therefore asks the Commission, which is in charge of the Em's commercial policy, to take action against these practices, particularly in the WTO, to restore our trade balance in this area.

| 3.1.3 | It notes the defence agreement between France, Germany and the UK which is a sign of change in the approach to Europe's defence. While it is not desirable to have an EU where everyone does their own thing, neither would it be advisable to stand in the way of initiatives which may provide a lead for others. |
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3.1.3

It notes the defence agreement between France, Germany and the UK which is a sign of change in the approach to Europe's defence. While it is not desirable to have an EU where everyone does their own thing, neither would it be advisable to stand in the way of initiatives which may provide a lead for others.

3.2   Space

| 3.2.1 | The EESC feels that the proposals in the White Paper more than fulfil STAR 21's recommendations. It again stresses the major strategic importance of space activities for the EU and asks that the Em's political approach to cooperation and international relations be based on a realistic vision of its interests. |
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3.2.1

The EESC feels that the proposals in the White Paper more than fulfil STAR 21's recommendations. It again stresses the major strategic importance of space activities for the EU and asks that the Em's political approach to cooperation and international relations be based on a realistic vision of its interests.

| 3.2.2 | It recalls that this sector employs 30,000 highly skilled people and that it is imperative to maintain and enrich this formidable human potential. |
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3.2.2

It recalls that this sector employs 30,000 highly skilled people and that it is imperative to maintain and enrich this formidable human potential.

| 3.2.3 | Owing to the IRC's failure, and pending a European treaty giving the EU competence in space matters, it recommends that the Commission develop to the maximum the potential of the framework agreement concluded with the ESA. |
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3.2.3

Owing to the IRC's failure, and pending a European treaty giving the EU competence in space matters, it recommends that the Commission develop to the maximum the potential of the framework agreement concluded with the ESA.

| 3.2.4 | Finally, it asks that the budget authorised for space policy correspond at least to scenario B ‘political act’ in the appendix to the White Paper. |
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3.2.4

Finally, it asks that the budget authorised for space policy correspond at least to scenario B ‘political act’ in the appendix to the White Paper.

3.3   European regulation of civil aviation

| 3.3.1 | The EESC totally supports the call for the rapid creation of a European Aviation Safety Agency and the wish to achieve, as soon as possible, mutual acceptance of certifications granted by regulatory authorities on both sides of the Atlantic. |
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3.3.1

The EESC totally supports the call for the rapid creation of a European Aviation Safety Agency and the wish to achieve, as soon as possible, mutual acceptance of certifications granted by regulatory authorities on both sides of the Atlantic.

| 3.3.2 | It also wants effective promotion of European air safety standards, as a factor in the competitiveness of the European aerospace industry, and therefore the active participation of the EU in international organisations with competence in such matters. |
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3.3.2

It also wants effective promotion of European air safety standards, as a factor in the competitiveness of the European aerospace industry, and therefore the active participation of the EU in international organisations with competence in such matters.

4.   Conclusions

| 4.1 | The European Economic and Social Committee considers that the Commission Communication on the STAR 21 report rightly draws attention to the weaknesses of military aerospace activity in Europe. However, it feels that the Commission probably attaches too much importance to the institutional side of things, and that the main thing is that a real political desire for autonomous Community defence should emerge in Europe. Only that will enable our industries to be given a solid base. |
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4.1

The European Economic and Social Committee considers that the Commission Communication on the STAR 21 report rightly draws attention to the weaknesses of military aerospace activity in Europe. However, it feels that the Commission probably attaches too much importance to the institutional side of things, and that the main thing is that a real political desire for autonomous Community defence should emerge in Europe. Only that will enable our industries to be given a solid base.

| 4.2 | In the field of space, the EESC notes that the White Paper drawn up by the Commission fully answers the requests made by STAR 21. It considers that the Commission/ESA framework agreement and the political guidelines defined by the White Paper should enable Europe's ambitions in space to be revived. |
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4.2

In the field of space, the EESC notes that the White Paper drawn up by the Commission fully answers the requests made by STAR 21. It considers that the Commission/ESA framework agreement and the political guidelines defined by the White Paper should enable Europe's ambitions in space to be revived.

| 4.3 | The EESC would point out that the European aerospace industry provides jobs for millions of Europeans and requires highly skilled staff able to master the most advanced current technologies. It is therefore clear that if the aim of making Europe ‘the most competitive and dynamic knowledge-based economy in the world’ is not to remain only an empty and hollow formula, it is up to the Member States to take appropriate action by defining genuine and ambitious European policies as regards armament and space activities, coordinated and synthesised at EU level so that our continent can regain its rightful position in the new world order. |
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4.3

The EESC would point out that the European aerospace industry provides jobs for millions of Europeans and requires highly skilled staff able to master the most advanced current technologies. It is therefore clear that if the aim of making Europe ‘the most competitive and dynamic knowledge-based economy in the world’ is not to remain only an empty and hollow formula, it is up to the Member States to take appropriate action by defining genuine and ambitious European policies as regards armament and space activities, coordinated and synthesised at EU level so that our continent can regain its rightful position in the new world order.

Brussels, 31 March 2004.

The President

of the European Economic and Social Committee

Roger BRIESCH

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