Governments in Europe and the United States are responding to the euro zone debt crisis and budget deficits by cutting defense spending. That is spurring a drive by NATO and the European Union to reduce duplication of defense equipment and to save money by sharing some capabilities.

Western defense firms could be forced into mergers or joint projects to survive the cuts, industry experts at the Eurosatory arms show said this week.

RIVALRY

In the past, France and Germany have competed in a number of areas including the Eurofighter and naval frigates. Efforts to develop a European drone have been hampered by rivalry between EADS, Europe’s top aerospace firm, and an alliance of Dassault and BAE Systems.

A Franco-British contract to order a surveillance drone from Dassault and BAE Systems is expected to be signed in July, industry sources told Reuters this week.

EADS was set up in 2000 on strict power-sharing lines between French and German interests, with Spain as a junior partner, and was dogged for years by in-fighting.

EADS and Germany have recently been at odds over the company’s move to refocus its activities near the headquarters of its Airbus plane in Toulouse, France.

Beemelmans said even where there has been cooperation between European countries on Tiger combat helicopters or the NH-90 transport helicopters the national versions were developed so distinctly that they turned out completely differently.

This has made developing and manufacturing the models more expensive and made the entire process more complex because of the need to hold different spare parts, he said.