We can't allow Germany and France to run our defence industry

By Con Coughlin

With BAE Systems and EADS locked in frantic negotiations to save their proposed £28 billion merger, the key issue for the British government comes down to one simple question: are we about to surrender control of Britain's largest defence contractor to the French and Germans?


Certainly, as things stand, that would be the outcome if the deal were allowed to go through with both the German and French governments having a nine percent stake in the new company. Britain, of course, by sticking to its free enterprise principles, would have no such stake, hoping that company decisions would be taken on the basis of commercial considerations, rather than political whim.


But you only have to look at the way the French defence industry is run to see that it is nothing more than an arm of the French government. Consequently, if France and Germany are allowed to have stakes in the new company, then we can expect future investment and development decisions to be taken on the basis of political considerations in Berlin and Paris, rather than on what is good for the company – and Britain.


If the deal went ahead as currently proposed, it would mean surrendering control of our future defence procurement needs to our European competitors. Do we really believe, for example, that France, which has its own nuclear deterrent, is going to allow the new European defence conglomerate to invest in the development of Britain's Trident nuclear deterrent?


The other issue that no one seems to be addressing is the impact the deal would have on our "special relationship" with the Americans when it comes to defence matters. The Pentagon has no interest in sharing military technology with Germany or France, but has developed a close partnership with Britain, the development of the F-35 Joint Strike Fighter – in which BAE Systems is involved – being a case in point. But will Washington still be so keen to share sensitive technology if French and German technicians are involved?


I think not, which is why David Cameron and Philip Hammond, the Defence Secretary, need to wake up the alarming implications of the BAE/EADS merger before it is too late.


While the British government does not own BAE Systems, it does have a "golden share" in the concern, which gives it the power to veto any action on the part of the company that is not deemed to be in the national interest. Unless there are cast iron guarantees that Britain's future defence procurement requirements will be protected in the merger, then the Government should use its power of veto to scupper the entire deal.


Con Coughlin is the Telegraph's Defence Editor and a world-renowned expert on global security and terrorism issues. He is the author of several critically acclaimed books. His new book, Khomeini's Ghost, is published by Macmillan. He appears regularly on radio and television in Britain and America.


The Telegraph