ABSTRACT
This chapter challenges the interpretation of the changes at work in the European arms industry. It argues that the transition from the Cold War era to a new order entails not just a "build-down" but rather a restructuring. The chapter outlines the role of arms production in the post-war era. It identifies two crucial determinants of the current restructuring; the politico-military and industrial dimensions of the integration of Europe. The chapter discusses the absence of the Peace Dividend, and the inadequacies of the policy debate. The policy debate on the defence industry in Europe is currently dominated by a tussle between advocates of free markets and nationalistic defenders of industrial interests. The emphasis is on the need to adapt to market forces, the parties differing over the kind of policy that is believed to promote this, and the emphasis they give to the company, regional, and national levels.
