Mr. ALEXANDER NICOLL (International Institute for Strategic Studies): European countries feel that they spend quite a lot on defense, but they're not getting full value for money--from that money. And if they can spend it more efficiently, then collectively they can have greater capability.
KAI RYSSDAL, anchor:
This is MARKETPLACE from American Public Media. I'm Kai Ryssdal.
Let's say you run a European company that makes widgets. You're in Germany, but you can sell those widgets in Belgium without paying any tariffs. That's the way the European Union works. If you make bombs, though, it's a different story entirely. Europe's $35 billion arms market has been left out of EU trade rules and weapons makers on the continent have been suffering. Kyle James reports from Berlin officials have a plan to change that.
KYLE JAMES reporting:The 25-member European Union has been pulling down trade barriers except in one crucial area: weapons and defense. Defense contractors get a special exemption from competition on the grounds of national security, so arms contracts usually only go to trusted national suppliers. But EU defense ministers took a step toward opening up the hugely protected, highly profitable arms market today. They signed off on a code of conduct that encourages countries to let defense companies compete on a continent wide level. Alexander Nicoll is a defense analyst at the International Institute for Strategic Studies in London. He says defense ministers want to get more bang for their buck, especially as military budgets get tighter.
Mr. ALEXANDER NICOLL (International Institute for Strategic Studies): European countries feel that they spend quite a lot on defense, but they're not getting full value for money--from that money. And if they can spend it more efficiently, then collectively they can have greater capability.
JAMES: The agreement is non-binding and voluntary, and countries have until April to decide whether to opt in or out. The EU hopes the move will lead to a restructuring of its defense sector. Consolidation will likely be necessary if Europe wants to ever compete with US defense giants. In Berlin, I'm Kyle James for MARKETPLACE.
