WASHINGTON: You think US defense spending is a mess? At least we’re not Europe.
A study out Tuesday from the Center for Strategic and International Studies warned that a decade of shrinking forces and funding is likely to continue, threatening a European defense industrial base already burdened by inefficiencies, national rivalries, and governmental tendencies to treat defense spending as “a jobs program.” Keep reading →
HEADQUARTERS, ALLIED COMMAND TRANSFORMATION, NORFOLK, VIRGINIA: A new era is dawning for NATO — though no one knows quite what it means. Now Allied Command Transformation, the only NATO organization headquartered on US soil, is driving an overhaul of how the alliance trains, strategizes, and shares the burden among its increasingly cash-strapped members in a post-Afghanistan, post-”Pacific pivot” world.
That’s a tough task when NATO must make do with what its 28 member nations choose to contribute, each on its own terms. In Afghanistan, some NATO contingents have fought hard — France has lost 86 troops, Canada 158, Britain 438 — but others have been largely kept out of combat by “caveats” imposed by their home countries. In Libya, a European-led operation helped oust Muammar Gaddafi but struggled with intelligence-sharing and shortages of smart bombs. And back in Europe, the alliance has struggled since 2003 to stand up a 13,000-strong crisis-response unit called the NATO Response Force, NRF. Keep reading →
[Corrected at 4:50 pm to fix misquotation; see note below] With today’s spectacular but not unanticipated collapse of the mega-merger between Airbus parent company EADS and British armsmaker BAE, what’s next? The conventional wisdom is that BAE, the smaller of the two firms, is now vulnerable. But top analysts tell Breaking Defense that, in many ways, the reaction against the deal by both the German government and the stock market is a bigger rebuff for EADS.
Here’s the conventional wisdom in a capsule: “There will almost certainly be greater pressure on BAE Systems than EADS to reveal a plan B strategy as soon as possible,” wrote IHS Jane’s analyst Guy Anderson in a widely distributed email. “[T]he company has put itself firmly out on the field in terms of merger discussions….Investors are unlikely to be satisfied with business as usual.” Keep reading →
Paris and Berlin are in a bind as British-based BAE and Franco-German giant EADs, the parent company of Airbus, seek approval to merge into the world’s largest aerospace company.
If the French and German governments accept the companies’ current merger terms, their ability to influence the new tri-national behemoth will be sharply diminished and they will possess less power to protect their citizens’ job. If they demand greater influence, however, they may scupper the deal altogether, because both investors and the US government are leery of Franco-German meddling. Keep reading →
Colin Clark
Sydney J. Freedberg, Jr.