Eamon Gilmore (Dún Laoghaire, Labour)
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Question 40: To ask the Minister for Defence if the voluntary code of conduct drawn up by the European Defence Agency to encourage competition in the European defence equipment market has been accepted by all EU countries; if the adoption of the code has brought about reductions in Irish Defence Forces equipment costs; and if he will make a statement on the matter. [38193/06]

Willie O'Dea (Limerick East, Fianna Fail)
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At the meeting of the European Defence Agency Steering Board on 21 November 2005, agreement was reached on the voluntary code of conduct, the aim of which is to encourage greater competition in the European Defence Market. The voluntary Code of Conduct seeks to eliminate or reduce the level of recourse to Article 296 of the Treaty, which enables member States avoid the normal open tendering arrangements, where Defence Equipment is involved.

The Code of Conduct was introduced for subscribing Member States on 1 July 2006. Of the 24 Member States, participating in the Agency, 22 have agreed to implement the Code (Spain and Hungary have opted out). While Ireland is not a major consumer of defence equipment in relative terms, it is expected that adoption of the Code of Conduct may lead to greater competition and lower costs generally in the defence equipment market.

As adoption of the Code of Conduct is still in the early stages, the full effect has yet to be seen in terms of reductions in equipment costs. Since adoption of the Code of Conduct in July of this year, there has been no significant procurement undertaken by the Defence Forces as most of our procurement is undertaken in the first half of the financial year. In due course it is hoped that the effect of the Code of Conduct would be to deliver improved efficiency and value for money in terms of our investment in defensive equipment for the Defence Forces.