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Tuesday, 18 September 2012

The Implications of the Proposed EADS-BAe Merger

For many centuries there has been a close synergy in successful countries between the most advanced sectors of technology and the  military and naval forces of the regime. The Vienna Arsenal and the Woolwich Arsenal in London occupied massive sites which have quite recently been released for development for civil purposes, as the last survivors of the former Austro-Hungarian and British Empires go to their graves. From at least the fifteenth century until after the middle of the twentieth the British Royal Navy maintained a massive onshore infrastructure of dockyards and other facilities, as well as being the predominant customer for cutting-edge ship and weapons design and construction. In the twentieth century the potential of aerial warfare created huge high-tech industries in all the industrialised states at the same time as vast acreages of land were taken up by airfields; and that phase was followed by space programmes; which India and China have now taken up as western European states and the USA have cut back on their defence spending and of space exploration as the burden of 'welfare' has pressed upon national resources.

Britain's attempt to keep a presence  in aerospace and naval construction, and to retain at least some advanced weapons technology, was by cobbling together British Aerospace, which added shipyards and became BAe, which is the residual legatee of centuries of public investment in defence supplies. This company has been surprisingly successful in retaining a global market share in many segments of defence procurement. Simultaneously Europe - including the UK - agreed that it could only keep up a presence in global civil aviation by collaboration, hence was created the Franco-Germanic-Hispanic-British consortium called EADS. With their usual short-sightedness, the Brits then sold their 20% holding of EADS; which is now regarded as a eurozone business.

It has recently been proposed that BAe and EADS should merge; with EADS owners holding 60% of the equity in the resulting firm. The biggest drawback to the merger is that BAe is the repository of a massive range of secret material relating to the military resources and plans for both the UK and US governments; and while the US has badgered Britain to integrate with Europe for over half a century, in matters like this the US establishment prefers its close satellite to keep close to the US without strings to the continental European states. The British government has a 'golden share' in BAe [as do the continental governments in EADS] and there will doubtless be a great deal of discussion in secret between the US and UK governments before the deal is allowed. One sure outcome if the merger does go through, is that the now-strong position of BAe as a supplier to the US military and space programmes will be reduced, most likely very severely and very quickly.

Thus the capacity of the wider Europe, including the UK, to remain active in globally important fields of production and research will be lost, precisely when China and India are developing their capability. The spin-offs from research into defence and space technologies, applied to terrestrial consumer products, has been responsible for many very popular product developments and innovations: that torch could soon be abandoned to Asiatic innovators. Europe will only have its Economists and politicians [and its supine electorates] to blame for allowing the catastrophe that is already well-developed to come to maturity. Then Europe will be too poor to build shipyards and aircraft factories, or to test rockets. Militarily as well as technologically Europe will be eclipsed, and the politicians will do nothing to avert the catastrophe because they are fixated on buying the votes of hereditary paupers whilst they purport to be controlling the expansion of the national debt.

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