Reuters reports that “the European Commission proposed on Wednesday to help Europe’s defense industry cope with pressure from falling military budgets by funding research and helping to develop new military technologies.”

“The European Union’s executive body, which has traditionally left defense responsibilities to its 28 member states, also raised the possibility that the EU itself could buy and operate some equipment needed for military missions.”

“Europe’s defense industry had sales of 96 billion euros ($126.9 billion) in 2012 and employed about 400,000 people.”

“But EU officials fear sharp cuts in defense spending by governments in response to the economic crisis are eroding the competitiveness of the sector, dominated by companies such as Britain’s BAE Systems, Franco-German EADS and Italy’s Finmeccanica.”

Working Capital Review: The slow decay of U.S. competitiveness