NATO chief Rutte warns EU against defence industry 'barriers'

BRUSSELS (Reuters) - NATO chief Mark Rutte told the European Union on Monday not to create barriers that would prevent companies from NATO countries that are outside the EU from taking part in its defence industrial push.

The European Commission, the EU's executive body, last year proposed spending 1.5 billion euros to give countries incentives to buy jointly from European firms and encourage industry to raise capacity. EU countries have yet to agree on how much of the pot should be reserved for EU companies.

Speaking at a European Parliament committee session, Rutte said he applauds the plan, called the European Defence Industry Programme, but also urged caution.

"We must avoid creating new barriers between allies that would only increase costs, complicate production, and hamper innovation," the NATO secretary general said.

"Involving non-EU Allies in EU defence industrial efforts is vital, I believe, for security of Europe," he said. "Transatlantic defence industrial cooperation makes us all stronger."

While the majority of EU countries form part of NATO, some of the military alliance’s key members, including the United States, Britain and Turkey, are not EU members.

"At a time when Russia, China, North Korea and Iran are increasing their defence industrial cooperation to unprecedented levels, it would be an act of self-harm to put up new barriers between allies," Rutte said.

(Reporting by Lili Bayer and Andrew Gray; Editing by GV De Clercq and Angus MacSwan)

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