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[email protected] Preface Introduction The European Defence Industrial Base and ESDP RESTRUCTURING OF THE EUROPEAN DEFENCE INDUSTRY THE INDUSTRY-LED RESTRUCTURING PROCESS. 1997-1999: the European defence industry under pressure 13 Firms seek economies of scale and enlargement of the market State/industry consensus on the need for industrial consolidation From international cooperation to transnational integration 18 The first cooperative programmes, common subsidiaries and joint ventures Privatisation Concentration Groups with diversified activities Appraisal by sector of activities 27 Defence aerospace and electronics: a strategy of segment consolidation The land and naval armaments sectors: an industrial scene divided along national lines Trends in European defence industrial direct employment 37 Overview Situation by country THE OPERATING ENVIRONMENT 41 The permanence of the Europe/United States imbalance 43 Unfavourable conditions... …in the face of the American strategy of expansion in Europe First initiatives aimed at creating a favourable environment for European defence industries 48 Creation of ad hoc structures by the principal armaments producing countries (Germany, United Kingdom, France, Italy, Spain and Sweden) First steps towards an institutional strategy for the EU in the field of armaments ALL-UNION INITIATIVES, ENHANCED COOPERATION AND CONVERGENCE OBJECTIVES