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Published: 1994

Total Pages: 121

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The purpose of this thesis is to determine the future prospects for the Western European defense industry under the terms of the European Union (EU) and the Maastricht Treaty. An analysis of the defense sector of Western European industry promises an indication as to the viability of the ultimate objectives of Maastricht. The defense sector must be internally reconciled within the EU, and Western Europe as a whole, if the European Union is to become a reality. Three prerequisites for resolution are political, economic, and security interests. They do not operate in isolation. The political realm faces an immediate institutional impediment in Article 223 of the Treaty of Rome. Article 223 has inhibited the movement to a true European market and hinders aspects of the Common Foreign and Security Policy. Despite lacking treaty justification, the EC Commission asserted, in 1988, that the defense sector should be brought under the single European Act of 1987. Mustering the political will to address the extension of the SEA, or the failure to do so, affects both the defense industrial sector and the long term vision of Maastricht. However, such a political decision is not without economic consequences. Currently, 80 percent of EU military expenditure is still spent within the respective national borders. Governments would be forced to concede significant influence over what has traditionally been a sector of the economy very closely associated to the state. Relevant political discussion will have to take place in the face of industrial consolidation, rationalization, declining job roles, rising Research and Development costs and competition From abroad.