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. Last Updated: 07/27/2016

Deal Helps EU Close U.S. Defense Gap

Europe is betting billions that a new cooperation agreement with Russia can help it bridge its defense technology gap with the United States.

The agreement signed April 4 between the giant European consortium European Aeronautic Defense and Space Co., or EADS, and its Russian counterpart the Russian Aviation and Space Agency — the largest ever between the two — is a lifeline for Russia's struggling defense industry and a boost to Europe's efforts to gain ground on the United States in aerospace technology.

A source close to EADS's negotiating team said in a telephone interview last week that the deal could generate $2.3 billion worth of orders for Russia's aerospace industry over the next decade.

Russian Aviation and Space Agency general director Yury Koptev confirmed that figure Friday, with the caveat that "only if all of the projects planned with EADS get implemented."

The deal calls for Russian aerospace firms, under the supervision of the Russian Aviation and Space Agency, to help the Europeans in the development and production of satellite navigation systems, military transport aircraft, jumbo civil airlines, helicopters and upgrades of Soviet-made combat aircraft, EADS spokesman Gregor Kursell said.

Koptev added to that list the launching of European satellites by Russian-made Soyuz rockets from the equator.

Actual contracts between EADS and Russian enterprises could be signed as early as May, Kursell said.

"[The deal] is mutually beneficial," said Alexander Pikayev, defense analyst with the Moscow Carnegie Center.

Pikayev said the deal could help EADS catch up with America in "those spheres of aerospace technology where Europe has been lagging behind."

Pikayev singled out Russia's satellite navigation know-how as one of the main areas of interest for Europe.

The agreement calls for Russian participation in EADS's A-400M military transport aircraft program. Pikayev said Russia's contribution to the program may go beyond limited production and Russia's leading aviation design bureaus — such as Moscow-based Ilyushin — may end up on the project as well.

EADS and the MiG Russian Aircraft Co. have also agreed to continue a joint program to upgrade MiG-29 fighters in Eastern and Central Europe.

The accord encourages Russian participation in the European Union's Galileo satellite navigation systems, Kursell said, adding that while the EU has decided not to use Russia's own Glonass system, EADS plans to procure some Glonass subsystems for Galileo.

To launch the Galileo fleet of satellites, EADS is looking at using Russian-made rockets.

As for civil aviation, the accord provides for the Russian aerospace industry to produce subsystems and possibly contribute technology for EADS's A-380 jumbo airliner, Kursell said.

Since 1997 a group of Russian aviation companies, including Moscow's Tupolev and Ulyanovsk's Aviastar, have been cooperating on the project with Airbus Industrie, in which EADS has an 80 percent stake. Russian firms already supply titanium and design subsystems for Airbus.

EADS's Eurocopter, Moscow's Mil Helicopter Plant and the Kazan Helicopter Plant will jointly design and market a replacement for Russia's Mi-8 general purpose workhorse as part of the deal.

Independent defense analyst Pavel Felgenhauer said that Russian aerospace firms could generate more than $2 billion over the next 10 years from contracts for the A-400M military transport plane and A-380 superjumbo alone.