Cross Border EU Defence Industry Consolidation between Globalization and Europeanization

The European Defence Industry is undergoing consolidation cutting across national borders. This is spurred by European Union policy initiatives and active encouragement by some national governments fearing a US-led global consolidation of the industry. The process in many ways proves challenging as it constitute a rendezvous of traditional market-based efficiency logics and concerns over sovereignty. Moreover, the defence industry has been an institutional island still exhibiting all the national protectionist mechanisms that European integration mostly has done away with in other sectors. The paper will depart from these institutional peculiarities drawing on the varieties of capitalism literature. Different patterns in ownership, public-private R&D links and business promotion policies are a key constraint in cross-border mergers. This is compounded by sovereignty concerns hosted by the national foreign policy establishment and industrial-military complexes reluctant to cede control over a vital technology and production base - particular to neighbouring countries which in a not to distant past were rivals rather then partners. The latter will be linked to recent work on the nature and impacts of foreign policy identities. Ultimately the paper aspires to establish an analytical framework combining insights from international political economy and international politics.