SINCE THE end of the Cold War, Europe's defense industry has undergone important changes. There has been a marked consolidation of the defense industry and a visible increase in intra-European collaboration. In 1993 only two European defense firms--British Aerospace (BAE) and Thompson SA--were among the top-ten defense firms in the world. Today, four European firms--BAE Systems, EADS, Thales and Finmeccanica--are among the top ten. This consolidation has largely been driven by a desire to compete with U.S. defense firms on the global arms market, since, with the partial exception of UK defense companies, European firms have had difficulty penetrating the U.S. defense market.
These developments have received relatively little attention outside the boardrooms of a few U.S. defense firms. However, they raise important issues for U.S. policy, notably whether these changes will enhance transatlantic defense cooperation or hinder it.
