REUTERS

BERLIN GERMANY and France agreed on Thursday to deepen military cooperation in areas ranging from satellites and missile defence to arms procurement, aiming to extract maximum value from shrinking defense budgets.

The agreement, signed by the two governments in Paris on Thursday, highlights Europe’s drive to reduce costly duplication in defense and achieve economies of scale as it struggles to cut spending and tame its sovereign debt crisis.

A copy of the declaration of intent was seen by Reuters before the signing at the Eurosatory arms show near Paris.

Under the accord, NATO allies Germany and France aim to coordinate new purchases of tanks and artillery, to better integrate the Tiger and NH-90 helicopter projects and to explore possible cooperation on missile defense.

Other countries, such as Italy, could also participate.

Germany, France and Britain also plan to look into developing a European drone, the declaration said.

“We must build a platform that others can join,” German Deputy Defence Minister Stephane Beemelmans told Reuters in Berlin. “Germany and France have often done this and that is what we want to do once again.” “In future the law of numbers will, almost without exception, be against us,” he said. “Modern systems are much more complex and individual states tend to order smaller amounts of equipment than they used to, which reduces the potential for streamlining.” Governments in Europe and the United States are responding to the euro zone debt crisis and budget deficits by cutting defence spending.

That is spurring a drive by NATO and the European Union to reduce duplication of defence equipment and to save money by sharing some capabilities.

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

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.