Fall-out from new EU constitution's rejection by French voters clouds proposals for European defence integration

European aerospace industry leaders have reacted cautiously to the prospect of the planned European Union constitutional treaty failing, despite the strengthened position defence had been given in the new document.

The Aerospace and Defence Industries Association of Europe (ASD) met last week to assess the immediate impact of France's rejection of the constitution. Wednesday's subsequent no vote in the referendum in the Netherlands appeared to drive the final nail into the constitution's coffin, with most observers now saying further referendums in other countries will be abandoned.

Gert Runde, ASD director of defence, says: "The quick and dirty analysis is that there will be little impact on defence industries." But he does voice concern that rejection of the treaty will dampen political enthusiasm for European defence integration.

The text of the proposed constitutional treaty, which is aimed at replacing a series of complex bilateral treaties with a single document, provides the European Commission and Parliament with limited powers to discuss defence issues. Currently defence remains a purely national affair, debated among foreign and defence ministers in the Council of Europe. But under the Nice Treaty, which came into force in February 2003, the EU adopted a voluntary common foreign and security policy (CFSP), headed by former NATO secretary general Javier de Solana.

The new constitution contained an obligation to follow the CFSP, but Runde says: "Defence issues will continue to march forward even if the constitution is not ratified in 2006."

However, ASD does have some concerns over any change in political will among European governments to achieve closer integration.

One casualty could be the anticipated increased co-operation on procurement through the European Defence Agency (EDA). Despite the EDA being listed in the constitution as an EU agency, there was no explicit requirement for countries to pool resources.

Runde says that the arguments for common procurement will remain the same with or without a constitution, but governments may take a more protectionist view to gain national support.

"There should not be any political concerns [over common procurement] as it's all about efficiency, reflected in fewer euros being spent to get more," he says.

Non-military aerospace spending is affected less directly by the constitution, although some within industry fear that any more overtly nationalist sentiment among individual governments may lead to tougher talks on the budget for the Seventh Framework research programme, in which the EC proposes doubling funds for aerospace research.

The ASD says it will "observe how governments behave in the next few months before making a wider assessment of the impact on European industry".



Rejection to have little effect

France’s emphatic rejection of the European Union constitution and subsequent government reshuffle is likely to have a limited impact on the ownership structure of the country’s aerospace and defence industry, say analysts. It is possible the companies in which the government still owns a substantial stake – such as naval shipyard DCN – could feel a backlash against Anglo Saxon enterprise culture stirred up by the “no” vote, says one observer. Although questions over government ownership could be raised in the short term, in general the relatively small remaining government stakes mean the impact is not likely to be large. Other analysts suggest the full impact will not be felt for some time. “We will not know for sure what the effect will be until the new government is in place,” says one.



Source: Flight International