U.S. urges NATO allies to invest in R&D

PARIS [MENL] -- The United States has warned its NATO allies that unless they invest more in defense research and development their militaries will be unable to fight alongside each other because of the incompatibility of their weapons.

Officials said NATO's allies in Europe have not contributed their share of defense R&D costs and instead have relied on the United States. They said the United States is spending three times as much as its NATO allies in Europe on defense R&D.

Officials attributed this partly to the failure of Europe to maintain the U.S. pace of mergers within the defense industry. They said the issue will be pressed by President Bill Clinton during next week's NATO summit in Washington of the 19 alliance members.

Felix Rohatyn, U.S. ambassador to France, said on Thursday that a priority of NATO must be to improve cooperation of the defense industries of alliance members. "The so-called technology gap between the U.S. and NATO allies raises the question of the future capability of our armed forces to fight together on the battlefield," he said. "The U.S. is currently outspending its NATO allies in Europe by a factor of three to one in defense R&D and two to one in defense procurement. Moreover, limited European defense budgets are spread thin across a wide range of national defense production requirements, which cost Europe dearly in terms of economic efficiency."

Rohatyn said Europe has more than 750 defense companies, compared to about 250 in the United States. European defense expenditures is about half of that of the United States.

"Unlike American defense companies, European firms must reconcile widely different shareholding structures which reflect fundamentally different concepts of the roles of the state and the market in the defense sector," Rohatyn said.

The U.S. envoy urged Europe to restructure and privatize its defense industries. He said that defense mergers in Europe, however, have aroused concerns in the United States.

Rohatyn cited the proposed merger of British Aerospace and GEC Marconi, which would mean that up to 95 percent of all British defense procurement would be from a single company. He said the United States has an interest in maintaining competition and U.S. access to European markets.

"Rationalization within the European defense industry may reduce pressures to export to questionable destinations," he said.