Misalliance

Much wailing and gnashing of teeth following the collapse of the proposed merger between British Defence contractor BAE (British Aerospace as it used to be known) and EADS, the people who make Airbus. Particularly among the banks who would have made millions. The rationale was straightforward: BAE was finding things hard going - not enough wars - and EADS very much wanted to get into the defence market as its rival Boeing has done.

I am not surprised the alliance didn't come off, and I think it would have been a great mistake if it had done. EADS is largely owned, and certainly controlled, by the French and German governments. In their European statist speak EADS is not just a nationalised industry, in the way that, say, Nat West Bank is in England, but a European champion. If there had been a new major contract, where do you think the new factory would be? Not the UK, I think.

And the Americans, whom BAE have cultivated for years to get a bit of the Pentagon's huge business, were never going to like the proposed new partners. Uncle Sam is suspicious of almost all foreign governments except Britain, and has a quite different philosophy to the European one. It started to ask for a reduction in state ownership of the European arm and the deal was off. Merkel took the blame, but Hollande would have vetoed it just the same.

The two companies may look the same, but they're fundamentally different.

'A greater power than we can contradict
Hath thwarted our intents'

         Romeo & Juliet