DAVOS: UPDATE: Germany Govt To Strengthen Military Industry
By Roman Kessler
Of DOW JONES NEWSWIRES
DAVOS, Switzerland (Dow Jones)--Germany's government launched an initiative to strengthen its military industry during the World Economic Forum this weekend in the latest sign that the country has become emboldened to fight for its international interests.
A group of top-executives from German blue-chips met with federal ministers, talking military business in Davos.
German defense minister Karl-Theodor Freiherr zu Guttenberg brought up the "necessary interplay of defense policy and Germany's economic interests," at a breakfast meeting with a group of top-managers from utilities, chemical groups and other companies, his spokesman said.
His colleague, Economics Minister Rainer Bruederle, lashed out on U.S. policy makers, criticizing that European Aeronautic Defence & Space Co. NV (EAD.FR) is put at a disadvantage when competing with Boeing Co (BA), at a business night in the swanky Belvedere Hotel of Davos.
Angela Merkel's new center-right coalition, which came to power about 100 days ago, is consistently working on the profile of its foreign and defense policy, analysts said.
"Germany has come a long way since unification toward expeditionary activities including, but not only in, Afghanistan. Think of the Balkans," said Executive Director Jackson Janes of Washington-based think tank American Institute for Contemporary German Studies.
"But there remains a closed debate about it within certain circles, but not so much at the public level. I think the U.S. would like to see Germany step up its engagements, but also bring Europe along with it," he added.
In the coalition treaty, parties agreed at the end of October to strive for a permanent seat on the U.N.'s security council that Germany should share with its neighbors "to take over more responsibility."
But as the U.K. and France are unlikely to give up their veto rights, some say that this would mean establishing a German-dominated seat in which others like Spain, Italy and eastern Europeans would participate.
Economics Minister Rainer Bruderle said as part of a wider strategy to push the country's weapons industry, Germany can't afford to let the Airbus A400M project fail.
He said it was in Germany's strategic interest to support Airbus and its parent against the backdrop of what seemed to him like inappropriate U.S. support for Boeing.
"If you look to the U.S. and ... Northrop," Bruderle said, Germany's government had reason to protect Airbus, implying that he had been alarmed by U.S. political resistance to EADS' attempt to partner with Northrop Grumman Corp. (NOC) in the U.S.
Germany, France, the U.K., Spain, Belgium, Luxembourg and Turkey are meeting Thursday to negotiate with Airbus and its parent, EADS, over cost overruns worth several billions of dollars on the much delayed A400M military transport plane project.
EADS executives have warned that failure to back and fund the A400M could lead to severe financial problems for the company.
The deal to develop the A400M transport was clinched in 2003 to enable European military to facilitate deployment in out-of-area missions of the North Atlantic Treaty Organization, such as the International Security Assistance Force in Afghanistan.
"That it is why I want the A400M," Bruederle told the group. He added that it was part of a wider push to support German weapons makers.
"Germans are still a little bit shy in this domain, but we'll work to change this too," Bruederle said.
