ABSTRACT
This chapter reviews the trends in the arms industry and the effect of military downsizing on the European defense manufacturers. Both American and European governments have taken additional actions which should aid their respective defense industries. The United States has used its military training programs to familiarize and train Eastern European military officers on American weapon systems. European defense firms have become the driving force behind integration efforts in the defense-industrial sector. The Pentagon is following the pattern of many European states and endeavoring to maintain and acquire new weapons and technology even as it reduces troop strength and civilian personnel. The efforts by individual European states to protect their national industries have further impeded collaborative efforts. The sudden disruption of large defense expenditure has created a dilemma for industries within arms producing states, and therefore a dilemma for the governments of these states—how to reduce government expenditure, yet maintain their defense industrial base.
