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03 Jan 06. Brussels threat to overturn French law. The European Commission said on Tuesday that it would scrutinise a new French decree that protects certain industries from foreign takeover and warned it could “react” if the provisions were found to violate European Union law. A spokeswoman for the Brussels executive said the decree had not been given the go-ahead in spite of extensive consultations between the two sides in recent months. The decree, which came into effect on December 31, will give the French government the right to veto or impose conditions on foreign takeovers of domestic companies operating in as many as 11 sensitive industries. It puts heavier conditions on bidders from outside the European Union. The decree could also give France a weapon in its fight against the outsourcing of jobs. It allows the government to stop foreign owners of French registered companies transferring production abroad, if they are in any of the protected sectors. The amendment appears to have its roots in the controversial takeover of Péchiney, the French industrial flagship, by Alcan of Canada. In spite of pledges to maintain French jobs and production, Péchiney’s workforce has been scaled back significantly since the takeover in 2003. This has inc-reased French fears of foreign takeovers, which culminated in last year’s public outcry about a rumoured approach for Danone, the yoghurt group, from PepsiCo of the US. On Tuesday the commission said it would now study the decree.” (Source: FT)
BATTLESPACE Comment: This announcement would seem to fly in the face of France’s wish to protect ceratin strategic defence industries and with the UK’s Defence Industrial Policy appearing to relinquish the defence manufacturing base it looks as if a pan-European Defence Policy is months away. However without an increase in R&D to counter the U.S. it is likely that the end result will be a large U.S. presence in Europe, particularly the fledgling NATO partners who are already showing a preference for U.S. technology particularly in communications where Thales in particular has been losing out in its back yard.

02 Jan 06. France hopes to sign an intergovernmental agreement with Britain early in 2006 to exchange information about aircraft carrier programs, aimed at saving money on the French Porte-Avions 2 (PA2) vessel, a government official said. “That’s our objective,” the official said, when asked about signing a memorandum of understanding (MoU). Part of the French government’s efforts to build a second carrier with Britain, such a pact would allow the French state and industry to study Britain’s detailed design work on its large carrier program, dubbed CVF. A British MoD spokesman said Dec. 30 he was not in a position to comment on a possible signing of an MoU to exchange information with France. Asked about the prospects for cooperation with France, Defence Secretary John Reid reiterated the British position that a tie-up of some form could go ahead subject to three main conditions: “Sharing with France will have to save money, incur no delay to our program and use our design. Yes, we will continue to discuss with the French, but we are not holding anything up,” he told journalists. The British Parliament’s defense committee weighed in on the debate Dec. 21 in a report on the future carrier. It broadly supported a tie-up, but warned against possible delays to the British program. (Source: Defense News)

04 Jan 06. EADS Astrium has selected Arianespace’s Ariane 5 for the launch of the third of the UK Ministry of Defence’s (MoD) next-generation secure military telecommunications satellite, Skynet 5C. EADS Astrium’s in-orbit delivery contract follows Paradigm Secure Communications’ recent amendment to the existing Skynet 5 Private Finance Initiative (PFI) contract with the UK MoD. The launch contract was signed at the end of December 2005. Arianespace was previously selected in 2004 for the launch of the first two Skynet 5 sat

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