Defence Ministers today formalised their contribution in view of the European Council at the Steering Board of the European Defence Agency (EDA). It complements the contributions from the High Representative /Head of Agency Federica Mogherini and Commissioner Bieńkowska. Among others, Ministers agreed on analysing the implications of hybrid warfare for European defence capability development, on further incentivising defence cooperation including the Preparatory Action on CSDP-related research, on a SME Action Plan, on potential basic principles, objectives and actions for a Security of Supply regime as well as future priorities of the Agency.
During today’s meeting, Defence Ministers welcomed the progress achieved in the implementation of the 2013 European Council Conclusions. The four capability programmes on Air-to-Air Refuelling, Cyber Defence, Remotely Piloted Aircraft Systems and Governmental Satellite Communications endorsed by the European Council in 2013 are making good progress in line with their roadmaps.
Cooperative programmes are important for enhancing capabilities in Europe, but also for clarifying priorities for industry. Defence Ministers agreed that potential additional priority capability areas could be investigated using the Agency’s Capability Development Plan, an assessment of cooperative opportunities derived from the Collaborative Database (CODABA) and EU wider policies.
The Agency was also tasked to conduct an analysis of the implications of hybrid warfare for European defence capability development in light of the changed security environment to the East and South. The analysis might form part of wider efforts, co-ordinated by the External Action Service and also including the Commission, to analyse the impact of hybrid warfare on the European security environment and to identify, and recommend improvements to existing EU tools and instruments that are best suited to counter this threat.
Incentives for defence cooperation
While Member States spent 26% of their defence equipment budget in collaborative procurement in 2011, this ratio was 16% in 2013. There is a need to spend better on defence, and to do more together.
Defence Ministers today confirmed the need for EDA to work on non-market distorting fiscal and financial measures to further incentivise defence cooperation. Tangible progress has been achieved on VAT exemption for ad hoc projects in EDA, with the support of the Commission and the Belgian authorities. Three pilot cases currently benefit from VAT exemption. Formalisation of this VAT exemption is pending the currently ongoing review of the EDA Council Decision.
EDA is investigating with Member States financial engineering mechanisms in support of defence cooperation, including a potential European investment fund for defence, for example to improve the availability of funds and the synchronisation of budgets allocated to cooperative programmes. This fund could be part of the pooled procurement mechanism. In addition, EDA has initiated contacts with the European Investment Bank to investigate potential financial support to the industrial sector and cooperative programmes of a dual-use nature.
In November 2014 the EDA proposed and Member States approved a Policy Framework for long-term and systematic cooperation. Its objective is to provide a coherent basis for defence cooperation in Europe, from priority-setting through in-service support to disposal/decommissioning.
Preparatory Action on CSDP-related research
There is a need to halt the continuing decline in investment of defence R&T and maintain competence in areas of critical technologies. The Preparatory Action on CSDP-related research, and its potential follow-on action in the next Multiannual Financial Framework, could provide fresh impetus. Ministers of Defence supported the progress achieved towards the development of the Preparatory Action by the European Defence Agency and the European Commission in close cooperation with the Member States. They endorsed consolidated views pushing for a defence-oriented and CSDP-related Preparatory Action. The European Council in June 2015 is expected to provide further guidance.
Defence Ministers furthermore agreed on revised guidelines for facilitating access to the defence market for Small and Medium-sized Enterprises (SMEs), supporting the implementation of the Agency’s SME Action Plan. SMEs are considered to be the backbone of the EU economy in terms of jobs creation, growth and innovation. The role of SMEs in the European Defence Technological and Industrial Base (EDTIB) has gradually increased over time, partly as a result of greater outsourcing. The non-binding guidelines were prepared in close cooperation with the Member States and the European Commission. They contain recommendations dedicated to access to supply chain, access to finance, support to innovation, competitiveness and industrial performance, and security of supply aspects.
Security of Supply arrangements are indispensable for the sustainment of operations, the development of long-term planning and cooperation, and the functioning of the internal market for defence. The December 2013 European Council called on the Commission to develop with Member States and in cooperation with the High Representative and the EDA a roadmap for a comprehensive EU-wide Security of Supply regime, which takes account of the globalised nature of critical supply chains. Due to the significance and multi-dimensional nature of the Security of Supply and taking into account experience gained from its work and activities, the EDA has together with its Member States identified potential basic principles and objectives of such a regime as well as actions that could be taken at the intergovernmental level. Proposed actions include establishing specific measures to ensure access to critical capabilities and technologies, e.g. through an early-warning or prioritisation mechanism, developing a mechanism to address concrete short term shortfalls, promoting cross-border cooperation, and bringing the supply and demand side closer together, for example through user-clubs.
Ministers of Defence today endorsed the future priorities of the EDA including three core activities to further strengthen defence cooperation: support the development of capabilities and military cooperation; stimulate defence R&T to prepare the capabilities of tomorrow and support the EDTIB; and ensure that the interests and specificities of defence are taken into account in wider EU policies.
Under the authority of Federica Mogherini, the Head of the Agency, EDA is a key instrument for supporting and facilitating defence cooperation in Europe. EDA’s strength is that it is Member State-owned and -driven. To date, EDA has managed around 150 R&T projects with a total aggregate budget of almost €500m.
63 percent of Brazilians favor the impeachment of Brazilian President Dilma Rousseff. (Photo by Eraldo Peres/AP)
The calls for the impeachment of Brazilian President Dilma Rousseff may not be fading away anytime soon, after allegations by a convicted currency dealer recently surfaced as part of a congressional commission. The commission is looking into alleged corruption at Petrobras, Brazil’s state-run oil company, which transpired during the ten-year period Dilma served as chairwoman of the national oil company. Brazilian prosecutors accuse Petrobras executives and two dozen engineering firms of inflating their service contracts as much as 6.2 billion reais ($2.1 billion) so the excess funds could be transferred to personal bank accounts and also to political parties. Thirty-four politicians in office are also being investigated by the Supreme Court in Brasilia on suspicion of receiving bribes.
The currency dealer, Alberto Youssef, alleges Dilma and former President Luiz Inácio Lula da Silva knew about the alleged scheme, “It is my understanding that [they] knew everything.” Last month, Youssef was convicted of money laundering and sentenced to three years in prison — a reduced sentence given his cooperation with investigators. Youssef came under investigation after prosecutors uncovered evidence he had given a luxury automobile to a Petrobras executive. Youssef has also implicated the Brazilian unit of Toshiba, the Japanese conglomerate, of paying bribes to win contracts with Petrobras.
Nestor Cerveró, a former Petrobras director, has also been arrested and charged with money laundering and bribery. Last week, Cerveró declined to answer prosecutor’s question while denying all charges against him.
Will these latest allegations by a convicted money launderer be enough to topple the President? The majority of Brazilians are likely to believe the allegations by Youssef, as close to 70 percent hold President Rousseff responsible for the corruption. Recent polls show 63 percent of respondents favor impeaching the president, and 65 percent rating her government’s performance as negative. In March, the corruption scandal at Petrobras brought out the largest demonstrations since those which helped topple the military dictatorship in 1985.
Earlier attempts by an opposition party in March to put forward a petition to investigate President Rousseff resulted in being overturned by the Supreme Court due to “technical errors.” The opposition is also looking at allegations Dilma violated a fiscal responsibility law to splurge on her reelection campaign. Many analysts believe the likelihood of Dilma being impeached are low, as Brazilian law states impeachment can only occur if the alleged offense takes place during the current term of presidential office.
As always, many political events are being driven by economic considerations. Brazil’s Finance Minister Joaquim Levy is doing his best to avoid a credit downgrade through austerity programs intended to reduce the government deficit by increasing revenues and cutting spending. Yet Levy is facing growing opposition from a Congress who believe his programs will fail to stem the recession and will only harm the population. Levy’s attempts at trying to rein in one of the world’s most generous pension systems, which spends over 10 percent of GDP on retirees, suffered a major setback last Wednesday, after the lower house of Congress passed an amendment to increase pension outlays by 40 billion reais ($13.34 billion) within ten years. The amendment is yet to clear the Senate and a potential veto by Dilma, who saw lawmakers from allied parties and from her own Workers’ Party vote for the amendment.
Public anger has also been fueled by an outbreak of dengue fever — some 229 have been killed by the mosquito-borne virus so far this year — an increase of 45 percent from this time last year. Over 750,000 cases of the virus have been reported and are serving to remind Brazilians of the sad state of their health care system, which has been highlighted in recent polls as the country’s biggest problem. Last June, in a nationwide poll by Datafolha, over 87 percent of those polled were unhappy with the health care system.
With many Brazilians still struggling financially because of the economic downturn and angry about the poor state of their health care, the calls for impeachment could grow louder should the new finance minister not be able to quickly turn the economy around. If the direct link of Dilma to the corruption alleged by Youssef is firmly planted in the minds of Brazilians, and former President Lula, himself implicated by Youssef, fails to back Dilma, the opposition and the masses could again turn to the streets in protest, and force Dilma to make a graceful exit. Yet before taking to the streets with calls for impeachment, Brazilians would do well to ponder the bagunça (mess) this would create afterwards, and carefully consider the alternatives.