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<HTML> <HEAD> <TITLE>1999 Book</TITLE> </HEAD> <BODY LINK="#0000ff" BGPROPERTIES="FIXED" BGCOLOR="#ffffff"> <BASEFONT SIZE="3"> <HR SIZE="2"><P ALIGN="CENTER"><FONT COLOR="#1f1a17" SIZE="7" FACE="Palatino"> Chapter 32 </FONT></P><HR SIZE="2"> <P ALIGN="CENTER"><FONT COLOR="#1f1a17" SIZE="6" FACE="Palatino"> New European Security: towards <BR> A Transatlantic Dimension </FONT></P> <P ALIGN="CENTER"><FONT COLOR="#1f1a17" SIZE="3" FACE="Palatino"> Ing. Dr. Giorgio Zappa<BR> President of Alenia Aerospazio </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> <BR> </FONT></P> <P ALIGN="CENTER"><FONT COLOR="#1f1a17" SIZE="3" FACE="Palatino"> <B></B><B>THE EUROPEAN SECURITY INITIATIVE</B> </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> <FONT COLOR="#000000" FACE="Palatino" SIZE="7">T</FONT>he recent decisions made by the European Union countries at the Cologne Summit are a fundamental step towards establishing a European Security and Defense Identity (ESDI), an instrument that will effectively implement a European Foreign and Security Policy (EFSP). This policy, together with institutional reform and economic development, are among the priorities of the program presented in Strasbourg by the President-Elect of the European Commission, Professor Romano Prodi. </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> As part of this program, Professor Prodi stated that “… the transatlantic axis is crucial. I believe that a stronger Europe is useful for a fairer and sustainable division of tasks between the two sides of the Atlantic.” He also stated that a new design for the relevant institutions will be needed to exploit to the fullest the concerted efforts being made in the field of defense, and that such a design might be based on the gradual and progressive model that was used for the Monetary Union. Professor Prodi indicated, and the Washington Summit reiterated, that a common defense of the European Union will be a basic condition for maintaining peace and stability, and that Europe must be able to do its share. </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> As a representative of an industry involved in the aerospace and defense business, and as someone who works in close cooperation with European countries and the U.S., my first reaction to the European Security Initiative is positive. But we must move from principles to action if we are to become a true integrated market and industry. </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> I recognize how difficult the process was to achieve a common (and revolutionary) institutional platform; now we need to go forward while being careful to find a balance between different national interests, both inside the EU and towards the U.S. Today, the European Union has a credible role in the European security architecture, and this contributes to more direct transatlantic links. </FONT></P> <P ALIGN="CENTER"><FONT COLOR="#1f1a17" SIZE="3" FACE="Palatino"> <B></B><B>STRENGTHENING INTERNATIONAL PARTNERSHIPS</B> </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> On the institutional side, a long-awaited and concerted effort has been to help European industries work in a more integrated security environment, facilitating efforts to strengthen European and international partnerships. The game is complex, and major obstacles and roadblocks, which have only recently been addressed, still exist. However, the continuous work of NATO and EU countries has created common perceptions and an understanding between Europe and the U.S. on a number of issues, including the Balkan crisis. This work should be extended beyond security. I am convinced that we should analyze military and industrial matters in the large spectrum of transatlantic relationships. </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Several U.S.-European forums, such as WTO and TABD (Transatlantic Business Dialogue), have debated or settled issues of common interest but to which different countries have employed different approaches. Such forums are important because their main objective is to create conditions that will enhance cooperation and multilateralization and that are essential to good global governance. The results obtained by Mr. Renato Ruggiero during his time as head of the WTO are a valuable guideline for facing future challenges relating to high-tech issues. </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Technological exchanges are also critical for implementing sensitive strategic programs, not only military programs. Any restriction affecting trade can undermine long-established cooperation, and if we really intend to promote closer industrial ties, we must put forward new non-restrictive criteria on cooperation within NATO countries. Such criteria will enable cooperative programs to go on, benefiting players on both sides of the table. </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> In the defense field, barriers and suspicions are very common among the major players. A useful step toward changing this situation would be greater transatlantic cooperation and having the U.S. be more flexible in its attitude toward foreign companies. </FONT></P> <P ALIGN="CENTER"><FONT COLOR="#1f1a17" SIZE="3" FACE="Palatino"> <B></B><B>CHANGES IN ITALY’S DEFENSE ACQUISITION</B> </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> I believe that Europe has progressed significantly towards a more liberal approach to defense acquisition. As far as Italy is concerned, our industry, which will soon be completely privatized and largely floated on the market, will be able to act more independently in terms of acquisition and development. The State is moving from the role of controller to the role of customer. Some changes in our industry already include: </FONT></P> <UL> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> The Italian navy’s decision to buy vertical take-off aircraft, marginally involving the national industry </FONT></LI> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Industry’s decision to launch a new program, C27J, for the export markets, with no initial requirement from the Italian armed forces </FONT></LI> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> The management of cooperation between the MOD and industries concerning the Eurofighter by a Europe-wide consortium. </FONT></LI> </UL> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> In the near future, we expect that OCCAR will manage programs and issue bids as a supranational agency, eventually eliminating juste retour and introducing competition. It appears that supercompanies are not a viable solution to industry consolidation, nor are strictly European companies in a competitive market with no boundaries. </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> A dialogue has already been established between industry and the European Commission on the best way to implement industrial measures that will enhance competitiveness. (Article 223 shows its limited value in some cases.) With the new security scenario and the evolution of the European Union, we need to provide a level playing field for all European players. Currently Europe’s non-homogeneous structure does not facilitate consolidation and must be modernized to allow the coexistence of free competition and juste retour, European and national requirements, private companies on the stock market, and national safeguarding measures. </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> The transition period we are now in is characterized by an asymmetrical structure and discrepancies. The emergence of supercompanies and budget restrictions must be properly managed to avoid giving an unfair advantage to single players, which would jeopardize consolidation. While the future is unclear, Italy will remain an active participant in the process and continue to focus on its first priority, which is to implement a European Defense Market by making the gradual transition from a “guided” market to a free market. </FONT></P> <P ALIGN="CENTER"><FONT COLOR="#1f1a17" SIZE="3" FACE="Palatino"> <B></B><B>NEW ALLIANCES TO COMPETE WITH THE U.S.</B> </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> It is clear that a stronger Europe is needed both to compete with and cooperate with the U.S. on an equal footing. This means that transatlantic cooperation must include joint EU/U.S. ventures. Moves in this direction are already occurring at different levels; for example, the majority of Daimler-Chrysler stock is in U.S. hands, and BAe/GEC and Dassault Aviation have important assets and employees in the U.S. </FONT></P> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> After heavy restructuring and with improving financial performances, Italy is well positioned to enter alliances with European partners and has an eye toward transatlantic relationships. Some of these alliances include: </FONT></P> <UL> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Alenia Aeronautica/Lockheed Martin, for the development and production of C27J </FONT></LI> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Agusta partnerships with GKN/Westland and Bell </FONT></LI> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> The prospective integration of Matra Marconi with DASA and Alenia spazio in the new European company, ASTRIUM. </FONT></LI> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Several cooperative programs with space-related organizations, including ESA, NASA, International Space Station, and Globalstar </FONT></LI> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> Commercial civil aeronautics programs with Boeing, Airbus, and Dassault </FONT></LI> <LI><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> A relationship between Alenia Marconi Systems and the UK </FONT></LI> </UL> <P ALIGN="LEFT"><FONT COLOR="#1f1a17" SIZE="2" FACE="Palatino"> All Europeans should consider the benefits of having European groupings that share common guidelines within global groups. Such groupings could make clear that an autonomous European defense industry would not work against the U.S., but would strengthen transatlantic interests (both industry interests and those relating to NATO non-Article 5 missions). They could also stress that, although cooperation with the U.S. industry is welcome, it must be based on set principles such as balance and safeguarding of national identities. Finally, they could underline that the avoidance of commercial friction in sensitive high-tech areas is a priority. </FONT></P> <P> </P> <P ALIGN="CENTER"><A HREF="workshop1999.htm">Back to 1999 Workshop Index</a></P></BODY> </HTML>