Twenty-two European Union nations have signed up to a voluntary code designed to open the 25-nation bloc's euro30 billion (US$39 billion) arms industry to increased cross-border competition, the European armaments agency said Monday.
Only Spain and Hungary have notified the EU they will not take part in the "code of conduct" on defense purchases, scheduled to come into force on July 1, the agency said. Denmark decided in the early 1990s not to participate in the EU's defense and security policy and has a general opt-out from some EU defense operations.
Defense equipment contracts will be posted on an electronic bulletin board, which will be operated by the defense agency and set transparent criteria for selecting bidders and awarding contracts.
"This regime will create new opportunities for companies across Europe, strengthen our defense technological and industrial base and offer better value for money to the armed forces and to taxpayers," European Defense Agency Chief Executive Nick Witney said.
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Governments have been able to protect their national defense industries because military contracts have been largely excluded from EU legislation that has torn down barriers to trade within Europe in other sectors.
EU officials say more than half the annual spending on new military equipment in Europe currently lies outside EU free market rules. Ministers hope increased competition will drive down prices for new weapons.
By allowing companies to compete more in each others' markets, the EU hopes to encourage a restructuring of the continent's fractured industry so it is better placed to take on international rivals.
The rules will apply to defense contracts over euro1 million (US$1.3 million), but exemptions will be allowed if ongoing operations dictate that nations need especially quick supply.
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