BERLIN, June 23 (UPI) -- There may be a diplomatic rift in the pipeline between Germany and France after French Prime Minister Dominique de Villepin hinted that he would like to expand his government's influence at European air and space company EADS.
De Villepin, in a parliamentary debate Wednesday, contested the current power structure at Euopean Aeronautic, Defense & Space, or EADS, shortly after the words of Finance Minister Thierry Breton, who, speaking in reference to a shareholder's pact over EADS' initial listing, had earlier said that "some people now consider that (the shareholder's pact) does not give enough power to the state, as it is the industrial groups that have operational control."
EADS' shares are owned by the French and Spanish governments and German-American company DaimlerChrysler. The company, which was founded in 2000 through the merger of Aerospatiale-Matra of France, Construcciones Aeronauticas SA of Spain, and DaimlerChrysler Aerospace of Germany, is led by two chief executive officers, Frenchman Noël Forgeard and German Tom Enders.
The company has been hit by a management crisis after it surfaced that Airbus, which is 80 percent owned by EADS, will have to delay delivery for its new A380 super-jumbo by six to seven months. After the bad news, Airbus shares fell by 25 percent in less than a week.
De Villepin and his followers are angry at what they likely see as bad management.
Paris will take "all necessary actions for EADS to guarantee its production deadlines and supply clients in the best of conditions," he said.
De Villepin in the debate also fired a round at the Socialists responsible for the shareholder's agreement, branding them "cowards" when they questioned the role of Forgeard, who has been accused of knowing about the delivery problems before he sold his stock portfolio in March, making a profit of more than $3 million.
After de Villepin's charge of cowardice against Francois Hollande, head of the Socialists, the entire faction left the National Assembly and threatened to boycott Wednesday's session unless the prime minister apologized, which he has since done.
The conflict over how to handle the power structure at EADS is ongoing, however; it is clear that any change will require the agreement of the Germans, and that a lone course by Paris will not be accepted.
Breton later tried to calm tensions, saying in a radio interview that Germany and France were by no means adversaries.
"If we see possibilities to better the common project together, then we will propose those in unison," he said.
The parliamentary conflict in France proves how heated emotions are when it comes to EADS.
"It really is a topic that has entered domestic politics in France," Martin Koopmann, Franco-German expert at the German Council of Foreign Relations, a Berlin-based think tank, told United Press International via telephone. "It is part of the ongoing struggle between de Villepin and (Nicholas) Sarkozy for the presidency."
De Villepin was seen as France's next president until he tried to enact a labor law, known as the CPE, giving companies more power to hire and fire people. Mass protests caused President Jacques Chirac to rescind the law and left de Villepin's reputation seriously damaged.
The Clearstream affair, France's Watergate-like scandal, has further hurt de Villepin after allegations surfaced that he ordered a secret probe into Sarkozy, who has been falsely accused of running secret offshore bank accounts.
He has since tried to stage a comeback, but observers say the recent efforts are only a prelude to his sure-fire domestic downfall, as he is doomed to lose next year's elections to either Sarkozy or Socialist lawmaker Segolene Royal.
The Germans will sit back and not be worried by the current discussion over EADS, Koopmann said.
"In the end I don't think it will damage the political relations between France and Germany. Berlin knows that most of this is based on politicians trying to profit for the elections."
