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             NATO AWACS, photo courtesy NL MoD Keynote at the 17 th NATO LCM conference, by Jan Wind, president of the EDTA. Brussels, 18 May 2022 Introduction In this presentation, I will discuss the changed security environment, recent developments in the European Union and persistent issues related to Small and Medium Enterprises in the Defence sector. I present some of my views on the effects on the Defence industry. In particular, some of the developments and opportunities related to finance.   Security environment The Defence industry sector will change rapidly due to political developments within the European Union and also because the world is getting less secure. Many foreign policy experts warn already for a long time for increased tensions. However, it became a clear and present danger in February when the Russian Federation invaded Ukraine. A steel-on-steel war most people did not believe would ever happen again. That assessment prove...

  About a year ago the issue of Environmental, Social and Governance criteria occurred in the Defence industry. These criteria form the basis for corporate social responsibility. Suddenly, some companies could not attract investors anymore. Others reported they were even refused to get a regular bank account. Why was military equipment becoming that much unattractive in the financial sector? It turned out that the change in attitude occurred due to a new expert group of DG GROW of the European Commission. This Platform on sustainable finance was established in October 2020. It published a draft report on Social Taxonomy in July 2021 and a final report in February of this year. The intention of the report is that private investors should no longer invest in companies where more than 5% of their turnover is generated by socially undesirable products, like tobacco, gambling, fossil fuel and Defence. We are in good company! This limitation is intended to become in effect in June 2...

  The current European situation is guided by six priorities in public investment: recovery of families purchasing power, recovery of companies (namely SMEs), recovery of health infrastructures (worn out by pandemic), support families and companies due to sudden increase in energy costs, support refugees arising from Ukraine conflict and, last but not least, modernization of defense equipment. On the other hand, the almost permanent availability of NATO military equipment to support Ukraine makes it possible to provide nearby countries armed forces with technologically advanced and militarily powerful equipment, obviating the expected share of GDP. The publication of Strategic Compass contributes, in part, to correct this situation, defining an evolutionary framework that aims the balance of forces between all EU Member States, based on joint innovation and Research & Development, through collaborative projects submitted to European programs available, based on SME ecosystem. I...