Be the first to like this
At its inception under the Treaty of Paris in 1951, the European Coal and Steel Community
(ECSC) came into existence with the purpose of pooling war materials at a supranational level to
make war materially impossible between members. In this light, European integration focused on
the armaments industry even before consideration of wider-reaching economic and monetary union.
Today, European defense contractors are integrated more than ever before, as exemplified by BAE
Systems (BAE) and the European Aerospace Defense and Space Company (EADS). This paper
seeks to examine the effect of European integration on European defense companies and their
development and production of major weapons platforms. It will examine how and why European
integration led to differing degrees and strategies of consolidation of defense firms at the national
and the supranational level. This paper will primarily focus on EADS, the largest pan-European
defense firm, and BAE Systems, the European defense firm with the largest transatlantic presence.
Due to the myriad products and services provided by defense companies, this paper will focus on a
single weapons system. Though surely not all elements of the defense industry have undergone the
same internal and external pressures, this paper assumes that the general trends in European military
aerospace (specifically fighter jets) are representative of the wider European defense industry.
European aerospace has experienced greater pressure to integrate due to the higher R&D cost of its
product, but similar price trends in other weapons systems suggest that what happens to aerospace
will likely eventually happen to the rest of the defense industry.
The first portion of this paper will tell the narrative of inter-firm cooperation on defense
projects through the formation of consortiums such as the Panavia Tornado. The second portion will
tell the narrative of the post-Maastricht consolidation that occurred throughout the European defense
industry, eventually resulting in EADS and BAE Systems. The third portion will focus on European
fighter jets through the example of the Eurofighter in order to highlight the ways that consortiums
and consolidation has affected weapons production. With these narratives in place, the forth portion
will analyze the economic nature of military weapons, defense firms, and governments throughout
these narratives. It will highlight the exponentially increasing R&D costs associated with military
weapons platforms, the industry's dependence on defense spending by nation states, and the ensuing
importance of scale. The paper will conclude with a discussion of the way that European integration
has shaped European defense firms and a prognosis of current trends will affect these firms in the