Article 346 TFEU: The point of intersection between legal ambition and political will regarding the Defence Procurement Directive (2009/81/EC)?

Sammanfattning: The European defence industry contributes to enable Member States of the European Union to care for the security and defence of European citizens. In order to safeguard the Member States’ ability to tend to their essential security interests, Article 346 TFEU was adopted. This Article provides Member States with the possibility to withhold information and take measures which they consider necessary to protect these interests, without having to obey EU law. However, Member States frequently exempted procurement of military equipment on the basis of Article 346 TFEU from EU public procurement rules. The Court of Justice of the European Union held already in 1986 in Case C-222/84 Johnston that the grounds of exemption from Treaty rules provided for in Article 346 TFEU should be interpreted narrowly. This problem contributed to the Commission’s proposal of a new Directive and later to the adoption of the Defence Procurement Directive in 2009. This thesis examines the scope of application of Article 346 TFEU in order to determine when a Member State is allowed to derogate from Treaty rules on the basis of its essential security interests. Article 346 TFEU contains a secrecy exemption and an armaments exemption, Article 346(1)(a) and (b) respectively. This thesis further examines the current legal situation of Article 346 TFEU, including intensity of the Court’s scrutiny, proportionality, burden of proof and procedural requirements. Letter (a) and (b) has been seen to affect each other, which provides for the possibility of even more guidance by the Court in the pending Case C‑187/16 Austria v. Commission. The Defence Procurement Directive applies to contracts awarded in the field of security and defence when certain provisions such as Article 346 TFEU are not applicable. Nevertheless, the Defence Procurement Directive contains several grounds of exemption. This thesis focuses on three of these; security of supply, security of information and government-to-government contracts. Furthermore, the previously common practice of Member States to use offsets will be investigated. Lastly, the thesis’ analysis examines whether or not the European defence market will turn into a competitive market, presents observations of Case C‑187/16 Austria v. Commission, and analyses the scope of Article 346 TFEU.