{"id":27168,"date":"2017-10-27T13:36:03","date_gmt":"2017-10-27T13:36:03","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2017\/10\/27\/leonardo-could-get-shut-out-of-joint-eu-defense-programs-but-backs-them-anyway\/"},"modified":"2026-08-07T22:23:20","modified_gmt":"2026-08-07T22:23:20","slug":"leonardo-could-get-shut-out-of-joint-eu-defense-programs-but-backs-them-anyway","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/global\/europe\/2017\/10\/27\/leonardo-could-get-shut-out-of-joint-eu-defense-programs-but-backs-them-anyway\/","title":{"rendered":"Leonardo could get shut out of joint EU defense programs \u2014 but backs them anyway"},"content":{"rendered":"\n

ROME \u2014 The CEO of Italian defense group Leonardo has given his strong backing to the European Union\u2019s new defense fund, despite fears that Italian firms \u2014 starting with Leonardo \u2014 could struggle to take advantage of the fund.<\/p>\n\n\n\n

During a Q&A session with Italian parliamentarians on Oct. 25, Leonardo chief Alessandro Profumo was asked about the fund, which envisages a \u20ac500 million cash injection into Europe\u2019s industry in 2019 and 2020 for the development of new equipment \u2014 with the aim of getting firms to work together across borders.<\/p>\n\n\n\n

Profumo said he was \u201cprofoundly convinced that without European programs, this industry, above all Italy\u2019s industry, will have great difficulty in being sustainable in the long term.\u201d Joining joint defense initiatives in Europe was \u201cabsolutely key,\u201d he added, although he warned that Italy could only sign up to a European future if it was backed by strong investment by the Italian government.<\/p>\n\n\n\n

The CEO\u2019s speech echoed doubts raised by Italy\u2019s defense industry association that if firms like Leonardo do not receive healthy R&D funding from Rome, they will not have the kind of programs up and running that will attract further funding from the EU. A report from the Italian senate has also pointed out that the EU has provisionally excluded the dissemination of funding to support activity operated by firms outside the confines of the European Union. That is a problem for Leonardo, which owns facilities in the U.K., which is about to leave the EU.<\/p>\n\n\n\n

But one Italian analyst said the problem would be solved by an inter-government working group which is fine tuning the EU plans.<\/p>\n\n\n\n

\u201cEuropean groups with capacity outside the EU will need to give guarantees that the know-how being funded is not used outside the EU without specific authorization,\u201d said Michele Nones, scientific adviser at the IAI think tank in Rome. \u201cIf you develop a product with EU funds you will need to keep control of that technology. If you have production in the U.K., you must guarantee the results stay in the EU,\u201d he added.<\/p>\n\n\n\n

The Italian senate also worried about the EU suggestion that companies receiving funding should be at least 50 percent EU owned. Leonardo is only 30 percent owned by the Italian state. Nones said that problem would also be tackled.<\/p>\n\n\n\n

\u201cThis is a criterion which in not practical if you consider the continual evolution of company share ownership and how European companies can enter into international groups,\u201d he said. \u201cThese things don\u2019t change the European identity of the firms if their technological capacity and management continues to be in the EU. Moreover, in all big EU states, foreign investment in strategic sectors is monitored.\u201d<\/p>\n\n\n\n

Leonardo has in any case already joined cross border consortia to apply for funds for the first two research programs the EU has said it will invest in, with recipients to be chosen by year end. Leonardo is team leader of a group of 16 EU firms, seven research institutes, 14 small companies and five potential customers \u2014 together representing a total of 15 member states \u2014 which is applying for an initial \u20ac15 million in funding to research naval unmanned helicopters. The Italian firm is part of a group led by Germany\u2019s Rhinemetall which is applying for \u20ac7 million in research funding on the second program announced, which covers force protection and advanced soldier systems.<\/p>\n\n\n\n

During his address to the Italian parliament, Profumo said he was concerned about one aspect of European integration \u2014 the mooted team-up between Italian and French shipyards Fincantieri and Naval Group. The two firms are talking about jointly developing new naval vessels, but questions have been raised over potential competition between Leonardo and France\u2019s Thales, which both make naval systems.<\/p>\n\n\n\t