The European Commission wants to abolish VAT for European defense programs

For several years, the European authorities have made significant efforts to stimulate European cooperation in the area of ​​defense programmes. The initial observation was that in 2000, the European armies implemented more than a dozen different models of combat aircraft and nearly a hundred models of armored vehicles, many of which were produced and maintained outside the borders of Europe. 'Union. It was therefore a question of finding approaches in order to rationalize the equipment of the European armies, to secure the production and maintenance chains, and to stimulate European strategic autonomy in this field. Among the solutions implemented are Permanent Structured Cooperation, or Pesco, which today brings together nearly a hundred cooperation programs, some of which have real strategic implications, as well as the European Defense Fund, designed to stimulate R&D and the design of prototypes, and with an envelope of €8 billion over the current period.

However, it appeared that European leaders continued to favor the acquisition of equipment outside the European Union, in particular with regard to the United States. Thus, while only 3 European countries will implement the fighter Rafale French, and 4 the Typhoon European, today no less than 6 EU countries have already turned to the American F-35, while 5 others (Germany, Spain, Greece, Czech Republic and Romania) are expected to make -even in the months or years to come. The observation is similar in terms of armored vehicles, helicopters, anti-aircraft systems or long-range artillery, even though in most of these areas, perfectly efficient and competitive European offers exist. Even in the naval field, many European countries favor US solutions in terms of missile weapons and vertical silos, at the expense of Franco-Italian solutions, which are nevertheless very effective.

F35 netherlands News Defense | Armed Forces Budgets and Defense Efforts | Europe
6 European countries have already chosen the American F-35, and 5 others are preparing to do the same

The European Commission, and its Commissioner Thierry Breton in charge of industrial issues, has therefore taken up the problem once again, and has proposed several measures to try to favor "made in Europe" in terms of defense equipment contracts. within the Union. Thereby, it proposes to abolish VAT for European programs, so as to put European proposals on the same level as those coming from the American FMS, which is also systematically exempt from VAT. In addition, Brussels is proposing to target the funds available from the European Defense Fund differently, so as to better support intra-European exports of these cooperation programmes. Finally, it intends to better support programs compatible with the new “European strategic compass”, this document summarizing the threats and challenges that the EU will be called upon to confront in the decades to come, such as new generation armaments. The fact remains that, however attractive they may be from the media, these measures raise more questions than they bring out solutions.

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