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Thursday, October 11, 2012

BAE/EADS deal collapse shows national interests still rule when it comes to defence

A lot of people on both sides of the Europe debate got very excited last month about the ‘Future of Europe’ report produced by a group of EU Foreign Ministers chaired by Germany’s Guido Westerwelle. The report was certainly controversial, not least for suggesting “more majority decisions in the Common Security and Defence Policy sphere… and in the longer-term a European defence policy which for some members could eventually involve a European army.”

As we argued after the report was published:
“There is significant momentum for more integration in economic, fiscal and banking affairs, but its hugely unlikely to spill over into foreign policy which exists in a parallel political sphere… The context for this whole initiative is effectively German domestic politics… For Merkel this serves as a useful exercise at a time when the German government is über-sensitive to accusations that it is not sufficiently ‘pro-European’ - but without actually having to do anything."
This interpretation has arguably been supported by Merkel’s actions over the BAE/EADS merger, when she pulled the plug on the deal. As the Guardian reported:
“Sources close to the deal said that the German chancellor, Angela Merkel, had emerged as the most significant obstacle to an ambitious transaction that would have created an industrial behemoth with 220,000 employees worldwide, making products from nuclear submarines and Typhoon fighter jets to the A380 superjumbo.”
“Speaking before the deal was officially terminated, the source said: "The fundamental problem is that Merkel does not feel comfortable with the deal, full stop. The source added that the German leader appeared to have deep concerns over the notion of merging a civil aerospace manufacturer with a defence group.”
So national interest considerations when it comes to defence are not dead yet it appears… even in Germany.


Bugsy said...

A couple of lessons from Guido Westerwelle's report. With regard to political union it seems that Angela Merkel does not want to engage in "European Foreign Policy" at the expense of German autonomy. Although she is happy to indulge in fiscal and banking affairs, much closer to Germany's heart. With regard to European Foreign policy, if Germany and everyone else has their own Diplomatic Service, what is Kathy Ashton and her cohort doing.

Rollo said...

The defence allies we most value, because they are the most valuable, are our friends in the USA. When the chips are down, we and the Americans are on the same, right, side. Merging BAE with EADS would be the end of our special relationship; the end of arms cooperation and the beginning of our submission to the USE. I am so happy it has fallen through. Let's get back where we belong, in the English Speaking World.

John K Lund said...

We simply cannot trust the Europeans as allies, France supplied exocets to the Argentinians,the Belgians refused us FN ammunition,the United Germany I find want to rule either by force or successful economic warfare. I lived through one German war, my parents through two and my grand parents three. BAE must remain solely under British control. Furthermore we must retain an independent foreign service.We do not need people with Baroness Ashton's limited international experience being the controller of our Foreign Policy.

Anonymous said...

Surely this shows more reluctance to merge industrial assets unless Germany is top dog. Defence does not seem to have entered the minds (?) of any of the politicians.