Ciarán Cuffe (Dún Laoghaire, Green Party)
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Question 29: To ask the Minister for Defence the details of the newly agreed EU code of conduct on defence procurement which comes into force on 1 July 2006; and if he will make a statement on the matter. [24140/06]

Willie O'Dea (Limerick East, Fianna Fail)
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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. At the meeting of the European Defence Agency Steering Board on 21 November 2005, agreement was reached on an intergovernmental regime (a voluntary Code of Conduct) to encourage competition in the European Defence Equipment Market. The voluntary Code of Conduct will seek to eliminate or reduce the use of Article 296 and the use of offsets and other market distortion instruments.

The Code of Conduct will be introduced for subscribing Member States on 1 July 2006. Twenty two Member States have agreed to implement the Code (Spain and Hungary have opted out and Denmark does not participate in the EDA). While Ireland is not a major consumer of defence equipment in relative terms, developments which improve market efficiencies or which may yield some economies of scale for equipment procurement for the Defence Forces, should be encouraged and would obviously be beneficial in terms of driving prices down. It is hoped that the effect of the code of conduct would be to deliver more efficiency in terms of our investment in defensive equipment for the Defence Forces.