WRITTEN QUESTION E-1730/96 by Antoine-François Bernardini (PSE) to the Commission (25 June 1996)

Subject: Situation of Eurocopter

The European defence industry is in process of being restructured, following the decisions to reduce the military budget, particularly in France.

The Franco-German consortium Eurocopter, the second biggest helicopter manufacturer in the world, is particularly affected by these decisions, and is considering making 1500 employees redundant (1000 in France and 500 in Germany).

What action does the Commission intend to take to preserve the necessary industrial basis for the development of defence policy?

Does the Commission intend, in the context of the review of the defence industry being undertaken by DG III, to introduce a programme in support of the enterprises and regions most affected by these restructurings, on a significantly larger scale than KONVER, whose objectives are strictly confined to conversion and SMUs?

Answer given by Mr Bangemann on behalf of the Commission (5 September 1996)

In response to the crisis in the defence-related industry the Commission has issued a communication 'The challenges facing the defence-related industry, a contribution for action at European level' ((COM(96) 10 final. )). This states that a competitive defence-related industry is of great importance to Europe in order not to lose more jobs in this sector in Europe than elsewhere and not to lose an important share of Europe's technological and industrial base.

The Commission considers a restructuring of the industry is necessary in order to reach sufficient economies of scale in research and development (R& D) and production, especially compared to American companies. A European dimension to the industry is required, rather than the national dimension which obtains to a major extent today. In fact, market fragmentation is increasing the costs of defence equipment in Europe. Structural funds allocations for 1994-1999 can be helpful in creating the right environment for changes to take place both in the defence industry and in other industry sectors. These instruments are acting on a regional basis and in the framework of programmes concerning objective 1, 2 and 5b regions.

The Commission works, with the assistance of industry and governments, in order to progress in this area. The Commission expects the Council and the Parlament will give the appropriate support in these efforts.

The Community structural funds are instruments of regional economic development policy and do not favour any particular industrial sector. In this context, the Community initiative Konver was proposed to accelerate the diversification of economic activities in regions heavily dependent on the defence sector. This could be achieved by the conversion of economic activities linked to this sector, so as to render them less dependent on this sector and encourage the adjustment of commercially viable business in all sectors of industrial activity.

Measures are intended to assist all sectors of industrial activity in regions eligible under Konver. In areas eligible for assistance under objectives 1, 2 and 5b, the qualifying measures will complement the schemes to assist industry, which include assistance for investment in production equipment, contained in the relevant Community support framework.

Assistance should not be given to activities which could have either a dual application (civilian and military) or a purely military application.

In May 1996, the Commission, in its decision concerning the allocation of the reserve of the Community initiatives, approved additional funds to Konver and the extension of this initiative until the end of 1999. The guidelines concerning Konver remain unchanged.