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Rudolf Scharping, Germany's defence minister, in a significant step towards a common defence capability, has called for Europe to set up a joint air transport command.
The proposed transport command would be important for ensuring Europe's ability to undertake military action around the world, reducing reliance on the US.
Mr Scharping proposed that European leaders commit themselves to setting up the transport unit at the same time as deciding between the options for a new European military transport aircraft, in "the first months of 2000". He said the idea had "met a very positive reaction from European governments as well as the US".
To strengthen links, Mr Scharping also proposed that Europe's defence ministers should take a more active role in the European council of ministers, or form a separate European defence "council".
"I hope it is in the interests of every European country . . . to drive forward European integration. To put it crudely, we have too much agricultural policy - and not nearly enough foreign policy," he said in an interview with the Financial Times.
A decision on the so-called future large aircraft, important for the swift deployment of troops, will be an important test of European countries' willingness to collaborate on defence projects. But Mr Scharping, who could face a political battle to secure German funding for the project, said a choice remained between the European Airbus A400M and the Russo/Ukrainian Antonov 70. The UK is also looking at US options.
The German defence minister admitted Germany's armed forces were being severely squeezed by the government's stringent financial austerity plans. However, as a longer-term solution he advocated greater specialisation by individual European countries to prevent costly duplication.
Mr Scharping believes Germany could focus skills in manufacturing battlefield weapons, such as tanks. He strongly supported the government's decision this month to authorise shipment to Turkey, a possible future EU member, of a Leopard II tank for testing - in spite of opposition from the Green party, the government's junior coalition ally.
However, he insisted the decisive issue was not the preservation of German jobs. "To co-operate with Turkey . . . is certainly better than not to co-operate. Jobs are no argument for weapons exports, at least not for me."
The tank issue is the latest row to hit Gerhard Schr�der's fractious coalition, exposing differences also within his Social Democratic party.
Mr Scharping stressed the importance of the SPD's party conference in Berlin at the beginning of December. Mr Scharping was chairman of the SPD before being unseated in 1995 by Oskar Lafontaine, the leftwing finance minister who resigned in March.
After a series of disastrous election defeats in the autumn and open rows within the party over attempts by the government to give itself a modernising image, Mr Scharping said: "I am sure that at our party congress we can return to a serious, thorough and responsible way of behaving."
The "overwhelming majority" of SPD members supported the direction the government was taking, Mr Scharping said. "Am I so sure the majority at the party conference will be as big? We'll have to see."