Germany claims France not ready

German Economy Minister Wolfgang Clement said European shipbuilders aren’t ready to merge with their German counterparts as many are still government-controlled. “The potential partners are not yet advanced enough,”‘ Clement told reporters at a maritime conference in Bremen, Germany when asked if he would support a merger between ThyssenKrupp Marine Systems AG and shipbuilders elsewhere in Europe. “We have made it clear that any cooperation between privately owned and publicly funded partners would fail.”

Clement said Europe should be “more ambitious” in bringing about cross-border mergers between shipyards and that there can only be “cooperation among equals” and “state-run” shipbuilding has to be rejected.

The French government approved a proposal last month by its defense minister to sell a stake in state-owned shipbuilder DCN to allow the company “to play a central role” in both the French and European defense industries. Clement’s comments suggest that’s not enough to win Germany’s backing for a naval alliance.

A confidential report by the German Defense Ministry said a merger of DCN and ThyssenKrupp would be “incompatible with German industry interests,” The report spoke of “operational and technical failure,” “questionable contracts” and privatization issues at DCN. The situation might become easier if DCN seal a promised alliance with Thales SA, France’s biggest military contractor, after which the French government would have to sell DCN. France has also told Germany that it wants to create a shipbuilding alliance akin to EADS that could include France’s Alstom SA. German officials have said that the plan is premature.