Europe's action plan to aid defence industry

Ministry of Defence Press Release, 6 July 1998

Defence Secretary George Robertson and the defence ministers of France, Germany, Italy, Spain and Sweden will tonight set out a plan of action to help Europe's defence industry restructure to meet the challenge of competition from the United States.

The six ministers will sign a Letter of Intent at Lancaster House, London, which provides a framework for developing concrete and practical measures which Governments can take to assist the industry-led restructuring process.

George Robertson said:

'This Letter of Intent which I am signing with my colleagues from the main defence industrial nations of Europe is a major achievement which sends out a strong signal of our determination to drive forward the process of European defence industrial rationalisation.

'Defence industry in Europe is fragmented. There is over-capacity in many sectors and too much duplication of effort. Without restructuring, it will not be strong enough to survive in a market dominated by the American giants.

'Although it is primarily for industry to lead the rationalisation process, there is much that Governments can, and should, do. This Letter of Intent is not a panacea. But it represents an important step forward, one that I am confident will receive the full backing of industry.

'It is vitally important that European defence and aerospace companies seize the opportunity to come together to create viable companies capable of providing competition for their American counterparts.'

The Letter of Intent will be signed this evening by Mr Robertson, Alain Richard of France, Volker Ruhe of Germany, Beniamino Andreatta of Italy, Eduardo Serra of Spain and Bjorn von Sydow of Sweden.

It identifies some of the potential obstacles to restucturing in six key areas, and possible means of removing them. Expert working groups will now be established to carry the work forward. Precise solutions to the problems identified will be set out in separate arrangements or agreements.

The key areas are: