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Bloomberg: EU aims to bolster defense sector with critical material access

Charles Michel, President of the European Council, met with defense industry leaders to discuss long-term contracting and material access.
Charles Michel
President of the European Council Charles Michel in Kyiv on 21 November 2023. Credit: Presidential Office
Bloomberg: EU aims to bolster defense sector with critical material access

The European Union is exploring measures to ensure the defense industry has priority access to critical materials during crises and to enhance predictability in contracting.

The push for bolstered defense capabilities comes in the wake of Russia’s invasion of Ukraine and years of underspending by EU member states, according to Bloomberg.

Charles Michel, President of the European Council, intends to address these concerns at the upcoming EU leaders summit, focusing on mechanisms for prioritizing the defense sector over civilian goods in material scarcity situations and securing long-term contracts for defense companies, Bloomberg reported, citing an EU official familiar with the matter.

Michel recently met with top executives from major defense firms, including Rheinmetall AG, Airbus SE, and Saab AB, to discuss industry demands for more predictable defense spending through long-term government contracts. This move, they argue, would enhance production capacity and readiness. The industry also expressed concerns about accessing essential raw materials, critical minerals, and chemicals, advocating for a mechanism to ensure availability amid civilian sector prioritization.

The EU’s reliance on critical materials has been a growing concern, especially with fears of China’s potential leverage over key resources. This issue has become more pressing in the global race to develop clean and digital technologies.

According to Bloomberg, discussions also highlighted the European Investment Bank’s crucial role in boosting defense industry investments. Talks are underway to broaden the definition of dual-use goods, allowing for increased financing to military companies and infrastructure projects with dual military and civilian purposes.

Participants called for improved cooperation between governments and companies, with a focus on adequate financing, regulatory flexibility, reduced bureaucracy, and harmonizing national standards.

EU unveils sweeping strategy to get “defense ready” amid Russia-Ukraine war

The European Union has unveiled a new strategy aimed at boosting the bloc’s defense industrial base and military preparedness in the face of Russia’s protracted war against Ukraine and rising geopolitical tensions.

In a major policy address on 11 March, Josep Borrelll, the EU’s High Representative for Foreign Affairs and Security Policy, laid out the urgency of ramping up arms production capabilities after two years of arming Ukraine from existing stockpiles that are now depleted.

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