EU Commission proposes reducing red tape for defence industry

BRUSSELS (Reuters) -The European Commission on Tuesday proposed changes to EU rules in order to cut red tape for investments in defence, as the continent seeks to urgently re-arm amid fears of Russia and doubts about the U.S. commitment to Europe's security.

The Commission, the European Union's executive body, said the proposals aimed to address complaints from industry about slow bureaucracies and cumbersome regulation.

The Commission proposed establishing fast-track national permitting systems where authorities would have a 60-day deadline to make decisions on defence-related permits. 

It also proposed taking defence readiness into account when enforcing competition rules. 

"Today's simplification package for defence proposes to unleash Europe's overwhelming economic heft, by breaking down internal barriers, cutting red tape and clarifying the rules, so that a truly European defence industrial and technological capacity can be ramped up," Valdis Dombrovskis, the European economy commissioner, said in a statement.

European countries have ramped up defence spending in response to Russia's 2022 invasion of Ukraine and warnings from the Trump administration that the U.S. can no longer be primarily focused on the continent's security.

On mergers, antitrust and state aid policy, the Commission said it would "take duly into consideration the specificities of the defence industry and the European defence equipment market and its contribution to the objective of defence readiness".

The Commission also presented new guidance on sustainable investments in defence, aiming to address complaints from industry that current rules severely deter private investment in the defence sector.

"Defence is compatible with sustainability criteria, like any other sector," Defence Commissioner Andrius Kubilius told reporters. 

The new proposals also include the easing of some defence procurement rules and reduction of administrative burdens for the bloc's defence fund.

Some of the proposals will have to be negotiated with EU governments and the European Parliament before they can be implemented.

(Reporting by Lili Bayer and Andrew Gray; Editing by Paul Simao)