Eurofighter missile deal signals resurgence for arms export industry

Date: 15/03/01

By Tim Jones

BACK in the distant mists of 1996, then Industry Commissioner Martin Bangemann issued a wake-up call to the EU's arms-makers.

Unless the role of the state was cut back, export policies and equipment standards harmonised and companies merged, they were going to be swept from the market by US military-procurement juggernauts, he said.

Since then, industry and defence ministries have stirred, snoozed and stirred again but they do not seem to have woken up completely. US industry, accounting for 47% of world sales, continues to lead with France, Germany and the UK fighting for third, fourth and fifth place behind Russia.

The EU's new defence arm and national forces continue to rely not only on the Americans for basic reconnaisance support and troop air-lift capacity but also on their industrial giants Boeing, Lockheed Martin, Raytheon and Sikorsky for their hardware.

Overlaps are still endemic. The €270-billion annual US defence-procurement budget picks two or three major contractors in each sector while the EU spend of €130 billion has more than five companies per product area.

Yet change is coming. Despite massive development costs, defence analysts believe the Eurofighter Typhoon programme is making significant inroads. It is being developed jointly by Germany, Italy, Spain and the UK - which together have ordered 620 jets - and is due to enter service next year.

And last week a new company,MBDA, was formed by the European Aeronautics and Defence Company, Italy's Finmeccanica and BAE to develop a missile for the Eurofighter. If it comes off, MBDA will also start producing Europe's first home-made cruise missiles.

Article forms part of a survey on EU-US relations.