John Gormley (Dublin South East, Green Party)
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Question 128: To ask the Minister for Defence if he will report on the terms under which Ireland joined the European Defence Agency; the reason membership of the agency was not referred to in Dáil Éireann; and if he will clarify the budget 2005 allocation of €315,000 to the European Defence Agency. [6747/05]

Finian McGrath (Dublin North Central, Independent)
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Question 379: To ask the Minister for Defence if the proposed European Defence Agency will encourage Ireland and other EU member states to increase military spending; and if this proposal will damage Ireland's integrity as a neutral country. [6879/05]

Willie O'Dea (Limerick East, Fianna Fail)
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I propose to take Questions Nos. 128 and 379 together.

A decision to establish an intergovernmental agency in the field of defence capabilities development, research, acquisition and armaments, known as the European Defence Agency, EDA, was formally adopted at the General Affairs and External Relations Council meeting on 12 July 2004. The overall aim of the agency is to support member states in their efforts to improve European defence capabilities in support of European security and defence policy. To achieve this, the agency has been ascribed four functions, relating to defence capabilities development; armaments co-operation; the European defence technological and industrial base and defence equipment market; and research and technology.

At its meeting on 6 July 2004, the Government agreed that Ireland would participate in the framework of the agency. Participation in individual projects of the agency will be a matter for national decision on a case-by-case basis. The agency will be an important forum by which the EU can seek to improve competitiveness and efficiency in the defence equipment sector which has been notable for fragmentation and duplication. While Ireland is not a major consumer of defence equipment, we should encourage developments which improve market efficiencies or which may yield some economies of scale for equipment procurement for the Defence Forces.

The agency is still in the early stage of development and is currently in the process of recruiting staff. The recruitment process is open to citizens of all the EU member states. National contributions to the budget of the agency are calculated on the basis of the gross national income scale in accordance with Article 28(3) of the treaty on the European Union. Ireland has paid a contribution of €21,733.07 towards the agency's initial general budget of €2.4 million for 2004. The budget for 2005, estimated at €25 million, includes once-off capital provisions for accommodation and infrastructure items, and means that Ireland's contribution towards the running of the agency will be of the order of €315,000.