The Week in Perspective : March 19-26, 1999
Compiled by our staff from wire service dispatches and other sources
European Consolidation Update :

-Shares in Indra, the newly-privatized Spanish defense and information technology company, rose to 9.25 euros in their first day of trading March 23, up from the privatization price of 8.94 euros, and by March 26 had climbed to 9.8 euros.

-France's Commission for State Holdings and Transfers could give its opinion on the terms of the Aerospatiale-Matra merger as early as next week. Some observers say the committee could set less favorable conditions for Lagardere, Matra's corporate parent.
The two companies are now aiming at floating the merged group on the Paris Stock Exchange before the June 12-13 week-end, when the Paris Air Show is due to open. Meetings with financial analysts are planned for March 31 and April 1. The French government will reduce its stake to 48 percent, and float 17 percent of the merged group on the market. Aerospatiale employees will receive about two percent, and Lagardere will get 33 percent.

-The European Commission said March 22 it invites comments from interested parties on the proposed merger of France's Aerospatiale and Matra Hautes Technologies.

Week's Other News :

-North Korea has at least four factories producing missile parts and at least 10 missile launch sites, with another two under construction, South Korea's defense ministry said March 26. Some 10,000 workers produce missile launch engines in underground facilities in Kaechon, while another factory in Kanggye, 200 km (120 miles) north of Pyongyang, is making missile parts. Two factories in Pyongyang are producing explosive compounds and missile parts, he said.

-Pakistan on March 26 launched the first missile boat built at the Karachi Shipyard and Engineering Works with Chinese technical assistance. Chief of Naval Staff Admiral Fasih Bukhari launched the Shujaat-2" missile craft in Karachi, and thanked Beijing for providing the necessary design and equipment support to the venture, Agence France Presse reported.

-A group of shareholders which own 58 percent of Canada's Spar Aerospace Ltd. said March 25 it wants to fire a majority of directors from the company's board, and has called for a vote on the issue. Reuters reported the group includes I.M.P. Group Ltd. of Halifax, New York-based arbitrage firm Crescendo Partners L.P.

-171 Finnish parliamentarians out of 200 elected to Parliament on March 21 oppose joining NATO, while 12 are in favor, 12 are undecided and five declined to answer, according to a poll published March 25 by the regional newspaper Keskisuomalainen.

-Taiwan's government wants to spend about 9 billion US dollars over the next decade to develop a low-altitude missile defense network, the defense ministry said March 25 in a report to Parliament. And Air Force Major-General Wang Chih-ke confirmed the same day that "buying early-warning radar is a policy of the Defence Ministry," Agence France Presse reported from Taipeh.

-Austria, member of the European Union but not of NATO, said March 25 that it would close its airspace to NATO warplanes because there was no U.N. mandate for military action. Hungary, which joined NATO March 12, said NATO could use its air space and military airfields for strikes against Yugoslavia.
Bulgaria, a NATO applicant, has pledged to allow NATO to use its air space for strikes on Serbia.

-Keystone Kops in Asia : Hampered by legal constraints, Japan's defense forces proved unable to halt a March 24 incursion into its territorial waters by two unidentified ships which fled to North Korea. The ships returned to Japanese waters March 26.

-Russian Defense Minister Igor Sergeyev told Russian reporters March 23, after an official visit to India, that Moscow was ready to supply India with its latest T-90S tanks, S-300PMU air-defense missile systems and other modern weapons, Itar-Tass reported from New Delhi.

-The Parliamentary Assembly of the Western European Union has called for the WEU's integration into the European Union in order to give Europe a political and operational capacity to deal with defense issues, its President Lluis Maria de Puig said March 23.

-Blowing hot and cold, the British, French and Italian defense ministers decided March 22 to launch production of the Principal Anti-Air Missile System (PAAMS), but postponed a decision on the Horizon frigate until industry can come up with an acceptable industrial organization "which meets their needs in terms of cost, performance and timing," the French defense ministry said in a March 23 statement.

-A DASA spokesman confirmed March 23 Swedish press reports that Italy had asked to join the German-Swedish Taurus stand-off missile program. A deal could be finalized in less than a month, the spokesman said.

-Keystone Kops in Central Asia : A Russian An-124 cargo plane which landed in Baku, Azerbaijan, March 18 was found to contain six disassembled MiG-21 fighters being flown from Taldy Kugan, in Kazakhstan, to Bratislava, Slovakia. Russia immediately denied Azeri claims the fighters were bound for Yugoslavia and said they were being delivered to Slovakia by Russian private company Polyot. But this was denied March 23 by the Slovakian government, which said it had no knowledge of the shipment.

-The House and Senate Budget Committees have completed budget resolutions that each provide about $290 billion in defense budget authority in FY '00, about $8.3 billion more than that requested by the administration, Defense Daily reported March 23.

-Israel and Russia have agreed to set up a "mechanism" to jointly combat the transfer of non-conventional weapons technology and know-how to Iran, the Jerusalem Post reported from Moscow March 23.
Israeli Prime Minister Binyamin Netanyahu said "the issue of non-conventional weapons technological transfer is of cardinal importance to us... and (Russian Premier Yevgeny) Primakov now is committed to take care of it."

-Despite stepped-up efforts to improve its computer systems' security around the world, the Defense Department is more vulnerable now than ever before to an information warfare attack, UPI reported March 22 quoting a report released by the National Research Council.

-Cyprus has ended a freeze on new weapons purchases because the Turkish side had failed respond to U.N. calls to reduce tension in the divided Mediterranean island, Reuters reported from Nicosia March 22 quoting Cyprus President Glafcos Clerides said on Monday.

-Bulgaria's government on March 22 approved a blueprint to cut the armed forces to 45,000 troops from 101,000 in five years, to boost efficiency and meet criteria for joining NATO, Reuters reported from Sofia. "The military doctrine blueprint approved by the government today envisages cuts to start from next year. A plan for the cuts will be prepared very soon," it quoted General Miho Mihov, head of the army's general staff, as telling a news conference. Bulgaria has allocated 593 billion levs ($331 million) to defense this year, or 2.39 percent of gross domestic product.

-Japanese Prime Minister Keizo Obuchi on March 22 called for Japan to build stronger security ties with the United States, calling for faster action by parliament to approve new military guidelines, Agence France Presse reported from Tokyo. He said it was "extremely important" for Japan's parliament to approve bills "at an early date" to support a 1997 US-Japan agreement on guidelines providing for expanded military cooperation in crises.

-Israel and Ukraine signed a defense memorandum on March 22, the first of its kind between the two countries, Ha'aretz reported from Kiev. The memorandum includes cooperation between the defense industries and the transfer of security information.

-HKV, a partnership between Raytheon Company and Kongsberg Gruppen ASA of Norway, has been awarded a $152 million contract by the Hellenic Ministry of Defense for upgrades and modernization of HAWK air defense missiles and equipment in Greece, Raytheon announced March 19.


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