UPDATE 1-BAE Systems H1 earnings up 14 pct, sees FY growth

LONODN, July 29 (Reuters) – BAE Systems (BAES.L) reported a 14 percent rise in first-half earnings and said it expected to deliver growth in the full-year despite expected lower sales at its land vehicle unit and cuts in European defence budgets.

Europe’s largest defence contractor on Thursday posted underlying earnings before interest, taxes and amortisation of 1.11 billion pounds ($1.73 billion) on sales 9 percent higher at 10.64 billion pounds for the six months to the end of June.

The company, which on Wednesday signed a 500 million pounds deal to supply India with 57 Hawk jets, increased the interim dividend by 9 percent to 7 pence per share but said it “anticipates a challenging trading environment” ahead.

BAE wants to grow its customer support and services business to offset expected cuts in UK defence procurement as Britain moves to cut a massive budget deficit.

Shares in BAE, which have fallen 10 percent in the last three months on concerns about potential cuts to European defence budgets, closed at 317 pence on Wednesday, valuing the company at around 10.80 billion pounds.

Despite the looming cuts, BAE, which derives around a fifth of its sales from Britain, said it saw unprecedented levels of interest from Middle Eastern and Asian governments at last week’s Farnborough airshow. [ID:nLDE66K206]

(Reporting by Rhys Jones; Editing by Matt Scuffham)

($1=.6402 Pound)

Europe must support defence for global role – NATO

The European Union must put more money and muscle into defence if it wants to become a global player, the head of the NATO alliance said on Saturday.

Secretary-General Anders Fogh Rasmussen also cautioned that Europeans could not take the transatlantic alliance with the United States for granted.

Speaking at the annual Brussels Forum conference, Rasmussen said the European Union’s Lisbon reform treaty, agreed last year, provides for a stronger defence and security policy for the 27-nation bloc.

“But this will remain a paper tiger if it is not followed up by concrete contributions when we need concrete military contributions,” he said.

“We have a strong responsibility to demonstrate a clear commitment politically as well as through investment in necessary capabilities,” he said, referring to dwindling European defence spending.

Former U.S. secretary of state Madeleine Albright, who is heading an expert group drawing up NATO’s new mission statement, noted that public support for NATO was at its lowest in the United States. Rasmussen said Europeans needed to show Americans the value of the alliance.

“We Europeans should not take this strong transatlantic relationship for granted,” he said.

“The best way to demonstrate the value of the alliance is through practical examples, like non-U.S. allies’ contributions to our operation in Afghanistan.”

MISSILE DEFENCE AN OPPORTUNITY

Linking into a NATO-wide missile defence system advocated by U.S. President Barack Obama was another area where Europeans could show commitment, “and thereby also demonstrate to an American public that the alliance is relevant”, he said.

Rasmussen called on NATO states to agree at a November summit in Lisbon to make missile defence systems against states including Iran an alliance mission, saying this would show collective will to defend against a growing threat.

He urged them to look at every opportunity to cooperate on missile defence with Russia.

Rasmussen said current trends showed a “real and growing” threat from weapons of mass destruction and their means of delivery, with more than 30 countries possessing or developing missiles with greater and greater ranges.

“In many cases, these missiles could eventually threaten our populations and territories,” he said.

He said Iran, which the West suspects of working to produce nuclear weapons, had said it possessed missiles with a range putting NATO members Turkey, Greece, Romania and Bulgaria within reach.

If Tehran were to complete development of intermediate and intercontinental missiles after taking a key step in introducing a space-launch vehicle last year, “the whole of the European continent, as well as all of Russia would be in range”, he said.

Last year, Obama shelved Bush-era plans to install a land-based missile shield in Europe to guard against long-range threats from Iran, in favour of sea-based interceptors and a second phase of land-based systems to which existing anti-missile hardware in NATO states could be linked.

(Editing by Michael Roddy)

ROUNDUP: Lawmakers approve France’s return to NATO military command

Paris – As expected, lawmakers in the French National Assembly voted late Tuesday in favour of a measure that effectively approved President Nicolas Sarkozy’s decision to return France to NATO’s military command structure.

By a vote of 329 to 238, the deputies passed a vote of confidence in the foreign policy conducted by Prime Minister Francois Fillon and his government, including the decision to return to full NATO membership.

In 1966, then-president Charles de Gaulle pulled France out of the alliance’s military command and evicted US bases from French soil.

Tuesday’s vote in favour of the government was a foregone conclusion, because Sarkozy’s UMP party and its centre-right allies hold a substantial majority in the National Assembly.

However, the debate was lively. Opposition deputies accused Sarkozy of avoiding a direct confrontation over the issue by linking the NATO measure with a vote of confidence in the government.

“This debate is decisive, but the decision has already been made,” former prime minister Laurent Fabius said.

Even conservative lawmakers had complained about the ploy.

“We’re condemned to vote for it,” UMP deputy Georges Tron told the daily Le Parisien. “The executive is telling us: Push the nuclear button or shut up.”

Socialist Party head Martine Aubry said the return to NATO’s military command would be an obstacle in the construction of a European defence.

That argument was dismissed by Fillon, who told lawmakers during the debate that Europeans do not want to have to choose between NATO and their own, independent defence capability.

In defending his decision, Sarkozy said earlier this month that France’s return to full NATO membership would strengthen European defence capabilities by giving Paris a say in the alliance’s mission strategies and planning.

“Now we have soldiers deployed on the ground … but no influence on the missions in which they participate,” Sarkozy said. “We have excluded ourselves.”

France currently is the fourth-largest contributor of troops to NATO and has some 2,800 soldiers deployed in Afghanistan.

France will now officially be readmitted to the integrated NATO military command structure during the NATO summit on April 3-5, held jointly in the cities of Strasbourg, France, and Kehl, Germany. dpa

Sarkozy to announce France’s return to NATO military command

Paris – French President Nicolas Sarkozy is widely expected to announce later on Wednesday that France is returning to NATO’s command structure 43 years after Charles de Gaulle pulled Paris out and evicted US military bases from French soil.

Sarkozy will probably make the announcement during an address at the conference “France, European Defence and NATO in the 21st Century,” at the Ecole Miliaire in Paris, in the presence of NATO Secretary General Jaap de Hoop Scheffer.

The decision has stirred some protest, particularly from die-hard Gaullists within Sarkozy’s own UMP party and from his political opposition on the left and centre.

The Socialist politician who Sarkozy beat in the 2007 presidential election, Segolene Royal, has been particulary critical of the move, describing NATO as the “armed wing of the West.”

In an opinion piece in ther daily Le Monde, Royal called the decision a “withdrawal” in three directions: “regarding the evolution of today’s world; regarding the role of France and of Europe in international relations; regarding the guaranties for our collective security.”

Another former presidential candidate, Francois Bayrou, said the move meant that France was losing its independence.

Since de Gaulle’s decision to leave NATO’s military command, “France has gained a freedom of speech that allowed us to say no to the war in Iraq,” Bayrou said.

However, two recent polls show that a substantial majority of the French favours the move. In addition, it will have little real impact in a practical sense, since France is already the fourth largest contributor of troops to NATO.

For Sarkozy, the move represents a part of his long-stated aim of making France a major player in all major international institutions.

In addition, although French troops are deployed on several NATO missions, Paris has not had a full voice in forming strategy and long-range planning.

That is now expected to change. According to media reports, France has been angling to get two NATO commands, a command headquarters in Lisbon and the Allied Command Transformation in Norfolk, Virginia, which among other things provides the conceptual framework for the conduct of future Alliance operations.

A debate on the move has been scheduled in the French Parliament for March 17, and while it is expexcted to be spirited there is little doubt that Sarkozy has the votes to get his way.

The decision is to be formally announced at the NATO summit at the beginning of April. (dpa)