Abstract
ABSTRACT France and Germany agree on the need to further European defence-industrial cooperation, but boast radically different preferences on how to structure such cooperation. Why? To answer this question, we introduce the distinction between the two faces of market size – the first exclusively related to defence, the second including the broader commercial-industrial base. Since Germany is, overall, more competitive than France in the commercial sector but less competitive in the defence one, it will advocate for a full-fledged integration of the European defence market but seek to protect its less competitive defence industry from France by championing autonomy in ad-hoc arms programmes. In turn, France would prefer to leverage its defence-industrial advantage by injecting efficiency on arms programmes but resist pan-EU initiatives to integrate the defence market, which would benefit Germany more over the long-term. To test our argument, we examine French and German preferences towards the European Defence Fund and the Future Combat Air System.
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