Rows over EADS management and Airbus subsidies show – like last week's referendums – that Europe is still a continent of nation states
Last week's powerful rejection of the European constitution by voters in France and the Netherlands shows that – despite federalists' dreams – Europe is still a continent of nation states, albeit one happy to settle differences in committee rooms rather than on the fields of Flanders or beaches of Normandy. The French and the Dutch shunned the treaty for different reasons: many in the Netherlands worried about their small country being swamped in an enlarged superstate; the left in France rallied against the constitution's "Anglo-Saxon" economic liberalism, which threatened their "social model" of generous welfare state and government control of economic levers.
The two controversies embroiling Airbus – who will head it and whether it should receive subsidies – back this picture of a Europe of independent countries pursuing their own goals. To many across the Atlantic, Europe is a monolith: an exporting bloc with a single political and economic agenda. That impression is wrong.
The merging of the aerospace giants of France, Germany and Spain into the integrated Airbus and EADS earlier this decade was a sceptic-defying achievement. However, it was driven by pragmatism rather than the pursuit of some European ideal: pooling assets was the best way to preserve the individual countries' aerospace and defence industries. Commercially, it has been hugely successful.
But the past six months have seen a series of unseemly rows between French and German shareholders about who will run EADS and Airbus, and attempts to engineer a merger with French-owned Thales. Last week's almost farcical events over the appointment of an Airbus chief executive prove these differences are still unresolved. Similarly, the dispute over subsidies is not about whether "Europe" can subsidise the airliner manufacturer, but whether Berlin, London, Madrid and Paris should be allowed – under European Union and world trade rules – to lend taxpayers' money to their own parts of Airbus. Although chancellors, presidents and prime ministers are happy to wrap themselves in the European flag to celebrate the A380's first flight, these subsidies are essentially about preserving skilled jobs in Broughton, Getafe, Hamburg and Toulouse.
The French vote could also derail any plans by the government to divest its remaining stakes in the aerospace industry. Paris's control over its industrial champions is on a different scale to the Mitterrand era in the 1980s when socialist ministers ran everything from banks to car makers. However, the government still has direct or indirect stakes in Dassault, EADS, Safran (the merged Snecma and Sagem) and Thales, and, while it no longer plays any part in the day-to-day running of these businesses, these shareholdings give politicians influence over the destiny of the country's aerospace industry. President Jacques Chirac's emphatic claim after the vote that France would never give up its inclusive social model makes it highly unlikely that the government will contemplate allowing any of these companies to fall into foreign hands.
As our story on P40 also illustrates, the French and Dutch votes are likely to put the brakes on European defence integration. Although the treaty does not propose a single European Union armed forces or defence policy, many anti-constitution politicians in Europe have successfully painted it that way. The French and Dutch decisions cannot halt the inevitable. Moves towards joint procurement are certain to gather pace over the next two decades purely because – as combat aircraft become ever more complex – no national governments will have the money to fund their own programmes. Similarly, EU armed forces have worked together in Afghanistan and the Balkans. However, this has mainly been under the auspices of NATO or the UN. Future large-scale co-operation on programmes, procurement or operations is likely to be negotiated government to government, rather than through an EU agency or the Council of Ministers. Europe has grown greatly in influence since the turn of the century. The creation of the euro, EADS, even the European Aviation Safety Agency, has had a huge impact on the industry and global economy. However, the unleashing of people power in France and the Netherlands – throwing the plans of Europe's political and business elites off course – proves that a United States of Europe to challenge the USA is off the agenda for a generation at least.
Source: Flight International
