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Germany Defence and Security Report Q4 2011
Business Monitor International, Oct 2011, Pages: 97
The eurozone debt crisis has continued to roll on, posing a major challenge for the German government. While domestically any move to provide a decisive but enormously expensive bailout package would prove highly controversial, the failure to resolve the issue is beginning to impact not only Greece, Ireland and other troubled countries but the global economy as a whole. German growth forecasts are being revised down to reflect the economic troubles as exports to other European state are taking a battering. This is not, however, having a noticeable effect on German defence spending or policy. The long-planned drawdown in German force levels is continuing with the end of conscription whilst plans to increase the ability to deploy overseas are also progressing.
The country’s defence industry is in a period of change, however, as the German government is understood to be preparing to purchase a 7.5% stake in the European defence conglomerate EADS.
Private company Daimler is trying to sell a third of its 22.5% stake but has been unable to find a German buyer for the stake, withthe attempted sale to a private firm has been described as ‘hopeless’ by a senior official. The German government is insistent that the sale be to a German entity, as it is wary of letting French interests dominate at the firm with the potential loss of work orders. A federal development bank is the most likely to make the purchase.
Also, the naval company Blohm + Voss may be sold to a German company after all, after Lurssen Werft reportedly made a bid for the firm. Owners ThyssenKrupp had announced their intention to sell the Hamburg shipbuilder after a planned joint venture (JV) to operate the company with Abu Dhabi MAR fell through.
Meanwhile, in a major EU military development; Germany, along with France, Italy, Spain and Poland, have sent a confidential letter to the EU’s foreign policy chief Lady Ashton asking her to bypass the UK for the creation of an EU operation headquarters. The British government has said that it intends to veto the creation of any single EU HQ, saying that it would duplicate NATO roles and frustrate cooperation with the United States. This stance is rejected by many European governments. Germany in particular is keen to see the creation of an EU HQ for EU missions, such as the Somalian anti-piracy operations. If the UK was bypassed in the creation of an EU HQ, it would be the first time that the Lisbon Treaty’s provisions for ‘structured cooperation’ were enacted. This allows certain member states to engage in further cooperation without including all European states.
Business Monitor International's Germany Defence and Security Report provides industry professionals and strategists, corporate analysts, defence and security associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Germany's defence and security industry.
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