FRENCH AEROSPACE contractors are bracing themselves for major procurement cuts following a defence budget which promises to reduce 1996 spending on weapons by more than Fr8 billion ($1.5 billion).

The defence-spending plans were part of a wider state budget unveiled on 21 September by President Jacques Chirac's new Government, which is aiming to cut public spending while tackling near-record levels of unemployment.

The victims of the defence-procurement cuts will not be known until the budget goes before Parliament, although speculation is rife that the four-nation NH90 helicopter programme, in which Eurocopter has the major industrial stake, is a likely target.

With procurement spending set to decrease from Fr102.9 billion to Fr94.5 billion in an overall defence budget, which decreases in net terms to Fr241 billion, industry fears the worst.

A commission set up by the defence ministry is reviewing the needs of the armed forces. Its deliberations, are expected to be revealed, as the budget cuts are decided.

Overall, French prime minister Alain Juppe has pledged to reduce the 1996 national budget deficit to Fr289 billion, from Fr321 billion.

The cuts could not have come at a worse time for a largely state-owned aerospace industry, which is having to address the problems of restructuring, in the face of heavy losses and trade unions, intent on maintaining the status quo. See Business, P23.

Source: Flight International