European defence ministers this week moved to end some of the barriers to consolidation within the European defence industry.
An agreement signed by the governments of Britain, France, Germany, Italy, Spain and Sweden aims to make improvements in six key areas: security of supply, export procedures, security of information, research and technology, technical information, and harmonisation of military requirements.
The security of supply deal aims to ensure that countries can rely on each other to provide defence equipment if rationalisation means production of a particular item is concentrated in one country.
Britain is worried that rationalisation could mean key sources of ammunition will lie outside the UK. In 1990 Belgium blocked the supply to the British army of vital artillery shells just before the Gulf War.
The export procedures deal is to ensure that countries will be able to export major systems that include sub-systems made in other partner nations.
The security of information and research and technology agreements aim to protect classified information passed on to newly formed joint companies and to reduce wasteful duplication of research.
The other deals relate to the transfer of intellectual property rights to new cross-border firms and to the need for guarantees that companies can market similar military equipment to other countries in Europe.
Defence secretary George Robertson said the agreement demonstrated how serious Europe was about industry restructuring, without which ‘it will not be strong enough to survive in a market dominated by the American giants’.
But British Aerospace is still at loggerheads with France and Germany over the character of a future pan-European aerospace and defence company centred on Airbus.