At Arm’s Length: The European Union and Europe’s Defence Industry

233 Pages·1998·23.34 MB·English

by  Terrence R. Guay (auth.)

AT ARM'S LENGTH
At Arm's Length
The European Union and
Europe's Defence Industry
Terrence R. Guay
Assistant Professor ofP olitical Science
and
Director ofG raduate Studies for the International Relations Program
Syracuse University
First published in Great Britain 1998 by
MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 6XS and London
Companies and representatives throughout the world
A catalogue record for this book is available from the British Library.
ISBN 978-1-349-26788-0 ISBN 978-1-349-26786-6 (eBook)
DOI 10.1007/978-1-349-26786-6
First published in the United States of America 1998 by
ST. MARTIN'S PRESS, INC.,
Scholarly and Reference Division,
175 Fifth Avenue, New York, N.Y. 10010
ISBN 978-0-312-21318-3
Library of Congress Cataloging-in-Publication Data
Guay, Terrence R.
At arm's length: the European Union and Europe's defence industry
I Terrence R. Guay.
p. em.
Includes bibliographical references and index.
ISBN 978-0-312-21318-3 (cloth)
1. Defense industries-European Union countries--Case studies.
2. Industrial policy-European Union countries-Case studies.
3. Europe-Economic integration. I. Title.
HD9743.E922G83 1998
338.4'76233'094-dc21 97-47367
CJP
©Terrence R. Guay 1998
Softcover reprint of the hardcover 1st editiion 1998 978-0-333-72069-1
All rights reserved. No reproduction, copy or transmission of this publication may be made
without written permission.
No paragraph of this publication may be reproduced, copied or transmitted save with
written permission or in accordance with the provisions of the Copyright, Designs and
Patents Act 1988, or under the terms of any licence permitting limited copying issued by
the Copyright Licensing Agency, 90 Tottenham Court Road, London WI P 9HE.
Any person who does any unauthorised act in relation to this publication may be liable to
criminal prosecution and civil claims for damages.
The author has asserted his right to be identified as the author of this work in accordance
with the Copyright, Designs and Patents Act 1988.
This book is printed on paper suitable for recycling and made from fully managed and
sustained forest sources.
10987654321
07 06 05 04 03 02 01 ()() 99 98
To my parents,
Bob and Virginia
Contents
List of Tables ix
Preface and Acknowledgements xi
Abbreviations and Acronyms xv
1. Introduction 1
Overview 1
Theoretical Framework 3
Policy Implications 11
Structure of Following Chapters 15
Timeliness of Subject 20
2. Europe's Defense Industry in the 1990s 22
Introduction 22
Characteristics of Europe's Defense Industry 27
Recent Trends 30
Competition 33
Cooperation 34
Conclusion 42
3. The European Union and Defense Industry Policy 43
Introduction 43
History of Institutional Developments 44
The EU's Defense Industrial Policies 48
'frade Policy 48
Competition Policy 50
Research and Development Policy 56
Public Procurement Policy 58
Regional Policies 59
EU Actors 61
Commission 61
Council of Ministers 66
Parliament 68
Conclusion 70
vii
viii Contents
4. The Global Context and US Defense Industry 74
Introduction 74
Transatlantic Relations in the 1990s 75
Economic Change and the European Response 82
The Inseparability of Politics and Economics 85
International Arms Sales 86
Changes in US Defense Industry 88
Defense Budgets and Government Intervention 91
The European Response 97
5. Defense Industries and the Nation-State 101
Introduction 101
France 102
Germany 109
United Kingdom 114
Joint Armaments Procurement Agencies 123
Conclusion 128
6. Defense Industry Interest Groups 134
Introduction 134
Business Interests 135
German Defense Firms 136
French Defense Firms 139
British Defense Firms 142
Other Business Groups 146
Labor Groups 152
Other Actors 157
Conclusions 161
7. Conclusion and Future Considerations 167
Review of Purpose 167
Theoretical Implications 168
A 'Reactive Spillover' Approach 177
Future Considerations 184
Concluding Remarks 190
Notes 192
Index 214
List of Tables
Thble 2.1 EU Equipment and Total Military Expenditures 23
Thble 2.2 Exporters of Major Conventional Weapons 25
Thble 2.3 World's Largest Defense Companies 28
Table 2.4 Largest Arms-producing Companies in the EU 29
Preface and
Acknowledgements
Some authors write books because they want to, others because
they have to. I wrote this book for both reasons. In order to receive
my doctoral degree from Syracuse University, I was required to
conduct original research in political science. I received two extremely
useful bits of advice while searching for a dissertation topic. The
first was from a member of the Syracuse faculty, Grant Reeher,
who suggested 'selecting a topic that you will not have trouble writing
about in the middle of the night, but which won't wake you up in
the middle of the night either.' I don't recall who provided the
second useful piece of advice, but the message was essentially to
choose a topic that covers lots of areas in which you are interested
in the hope that the diversity of the subject matter will maintain
your interest over a long period of time.
With this guidance I proceeded to study recent developments in
Europe's defense industry. In particular, I sought to determine how
and why the European Union (EU) had begun to obtain influence
over defense industrial issues. Such an approach satisfied both pieces
of advice. The subject touches upon interests I have in a variety of
areas, including political economy, European integration and the
EU, defense and security issues, transatlantic relations, economic
globalization, the role of interest groups in public policy-making,
and international business. This is also a subject that I tried to
address outside of normative considerations. I approached the
material as objectively as possible. In trying to explain how and
why the EU has policies affecting Europe's defense industry, I did
not become obsessed with whether this was a good or a bad develop-
ment. I do have views on this question (I think that EU compe-
tence in this area will improve the international competitiveness
of Europe's defense industry, and that this development has the
potential to reduce rivalries between European states), but they
were not the motivating goals that drove me to complete my re-
search. Over the three years that I worked on this project, I never
woke up in the middle of the night in a cold sweat, frightened by
a dream on the moral implications of my research. While some
xi
xii Preface and Acknowledgements
may lament the absence of an ethical dimension here, they may be
reassured to know that my next research projects are moving in
that direction.
Many people and organizations deserve thanks for their assist-
ance in this project. The Public Information section staff at the
Commission of the European Communities' office in Washington
were extremely helpful and thorough in my search for primary source
documents. However, much of the data presented in this book was
gained through interviews with policy-makers and defense industry
interest groups. I interviewed 27 people familiar with events in
Europe's defense industry during the summer of 1994. The inter-
views, conducted in Brussels, included European Commission of-
ficials, representatives of three trade associations (European Defense
Industries Group, Belgian Defense Industry Group, and Union of
Industrial and Employers' Confederations of Europe), executives
from five defense industry firms (Aerospatiale, British Aerospace,
Deutsche Aerospace, Thomson-CSF, and Northrop Grumman), of-
ficials of two trade unions (European 'frade Union Confederation
and European Metalworkers' Federation), a staff member of the
Western European Union secretariat, three foreign service officers
at the United States Mission to the European Communities, and a
researcher at the European Institute for Research and Informa-
tion on Peace and Security (GRIP). Interviews were also conducted
in May 1995 in Washington with officials at the British, French,
and German embassies, the US Congress Office of Technology
Assessment (eliminated by the 104th Congress), and the US Depart-
ment of Commerce. The information obtained from these interviews
reveals how policy-makers and political and economic decision-makers
make sense of the world around them, and try to shape develop-
ments in Europe's defense industry. Every attempt has been made
to ensure that the quotes cited in this book are representative of
each individual's general views. Admittedly, the interviews are not
a scientific sample of defense ministry officials, European defense
industry executives, or EU officials. The officials interviewed were
people who had first-hand knowledge of events in this subject area,
based in Brussels or Washington, and were willing to speak on this
subject. The opinions of all of these industry, government, and EU
officials shape the conclusions presented in Chapter 7. The use of
first-hand accounts from individuals directly involved with the EU
and Europe's defense industry provides a unique perspective that,