The European armaments industry at the crossroads

In the coming decade, one of the most significant decisions facing European defence planners, as well as their US counterparts, will concern the extent to which their defence industries will be internationalized. The '1992 Plan' of the European Community (EC), the proposals of the Independent European Programme Group (IEPG) for integrating defence markets, and a series of new NATO armaments projects highlight the heightened interest in internationalizing the West European defence industrial base. This article examines the causes and consequences of the recent trend towards opening European defence industries to international competition, and explores the dilemmas facing policy-makers charged with crafting European defence industrial policy. These policymakers face three fundamental questions: What is the appropriate mix between free-market competition and state-to-state collaboration in Europe? Should European armaments procurement be based on a notion of 'European preference' that discriminates against foreign products? What institutional form should European armaments co-operation take?