Today's Date:

After the two consecutive “noes” in response to the French and Dutch referendums on the draft European Constitution, Europe is indisputably weakened. Giving up is neither in the tradition of the Defence Ministry nor in my nature. What’s more, it’s pointless.

So this situation doesn’t put an end to either our capacity or our determination to take forward the European Security and Defence Policy. You can count on my personal commitment. We are going to continue taking initiatives on the basis of the current institutional provisions. Future progress on the ESDP will also depend on Europe-wide recognition of our genuine need for autonomy.

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There are two imperatives for strengthening the European defence economy:
- Strengthening our industries on a European scale;
- Greater investment in future capabilities.

1. It is urgent and imperative to consolidate the defence industry in France and Europe.

More account has to be taken of the defence sector’s contribution to our economies; it must prompt us to make our industries both more efficient and more competitive.

1.1 The defence sector makes a pivotal contribution to European economies.

The size of the US defence budget, over $400 billion, is indisputably a major vehicle for economic and technological development.

On a lesser scale, this economic impact is borne out in France. The defence sector is the number one public investor. It is also the number one employer. The French defence industry, not just the major groups but also the SME-SMI spread all over the country, employ 170,000 people directly and as many indirectly.

Roughly speaking, in the European Union the defence sector employs 4-5 million people. European countries, which spend around €160 billion a year on their defence, aren't sufficiently aware of its economic potential. Our European industry suffers from a fragmentation of national defence budgets and lack of collective action, which threatens Europe's strategic long-term future.

1.2. The route to efficiency lies in European cooperation and closer ties between our industries.

COOPERATIVE WEAPONS PROGRAMMES

In France, a very large proportion of major weapons programmes are cooperative ones: A400M transport plane, Meteor and Scalp missiles, Tiger and NH90 helicopters, Helios II observation satellite, Horizon and FREMM frigates, Scorpène submarine, etc.

We must make our defence industries more competitive through industrial cooperation. The three major principles underpinning my policy for the past three years are geared to this:

- 1st principle: to encourage major projects, carried out by manufacturers, to promote an efficient and competitive industry;
- 2nd principle: to defend our strategic interests (autonomy, security of supply, export capacity). Here, most importantly, we have to take ambitious action in the area of research and technology and economic intelligence;
- 3rd principle: to encourage the emergence of leading Europe-wide defence groups. On this last point, it is essential to make rapid progress on mergers. In this respect, I want the merger between DCN and Thales to be completed in the next few weeks. It's a good project which is needed in order to put the finishing touches to DCN's transformation.

2. We must set ourselves new ambitions to develop future capabilities.

Technological innovation is a driving force in our economies. We must step up our investment in the development of Europe's future capabilities.

2.1 A sustained R&D effort is crucial.

I have decided to increase the research budget which will rise progressively to €700 million a year in 2008. In 2005, we have already gone halfway, since it stands at €550 million. The development of demonstrators [prototypes] financed by several member States is a concrete example of the path to follow: in the field of UAVs (unmanned aerial vehicles), France is launching the NEURON programme with several of her European partners. I'm intending to do the same with the EuroMALE programme which I should like to be the subject of as abroad an agreement as possible.

The European Defence Agency will also play an important role in supporting our weapons development efforts.

2.2. The space sector has to be a priority for Europe.

The successful launch of Helios II in December 2004 was a strong and encouraging sign. The forthcoming arrival of Syracuse III will also improve our military telecommunications capabilities.

The Europeans must increase still further their space-borne observation and electronic intelligence capabilities in order to catch up in the field of images and data distribution. To me it seems fundamental that Europe mustn't fail to grasp the importance of the stakes which others have perfectly understood. I’m determined to get our partners to agree that we have to:

- Consider the future of the defence and security space policy and share the use of our space capabilities;
- Exploit the military-civilian duality of the space sector by exploring ideas on the use of civilian satellites;
- Develop joint projects in order to prepare for the future, like the ELINT electronic intelligence demonstrator.
I should like these proposals to lead to joint initiatives over the next few months. (...)./.