After Airbus A400M, Europe faces dearth of big defense projects

Mon Sep 30, 2013 2:09am EDT
 
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By Tim Hepher and Brenda Goh

PARIS/LONDON (Reuters) - European politicians will toast the long-awaited Airbus A400M military transport plane at a ceremony in Spain on Monday, but face warnings that Europe's largest-ever collaborative defense project may be its last for years to come.

After a tortuous 30 years in development, the first of 170 troop and cargo planes ordered by seven nations grants Europe a step towards independence in military transport, a key plank of foreign intervention capability.

The ceremony in Seville, where the planes are assembled, will also kickstart an A400M export campaign, a glimmer of hope to a European aircraft whose foreign sales have been dogged by costly problems with its huge turbo-prop engines and a four-year delivery delay.

Still, the aircraft's manufacturer has questioned how a continent pulled apart by weak finances and policy rifts will address future conflicts like Syria, Libya or Mali - and in turn how readily nations will co-operate on large defense procurements.

"I think we are further away from a common foreign and security policy than at any point in the last 20 years. I do not believe we will see a meaningful (one) in the next 20 years," Tom Enders, chief executive of Airbus parent EADS, said last week in a speech on transatlantic security.

"I do not assume in my strategic planning that in the next 10 to 15 years there will be any new major European projects in our sphere of activity. I see governments are even trying to cut or reduce projects that previously been agreed," Enders said.

The A400M was designed to meet a shortfall in military transport capacity among seven NATO nations: Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey.

But the 20 billion euro project went more than 5 billion euros over budget, forcing buyer nations to agree a 3.5 billion euro bailout in 2010, part of which is supposed to be repaid from export royalties.   Continued...

 
An Airbus A400M military aircraft participates in a flying display during the 50th Paris Air Show at the Le Bourget airport near Paris, June 23, 2013. REUTERS/Pascal Rossignol