Investing in space-based communications and intelligence remains a top French Defense Ministry priority despite the tepid response of France’s European neighbors, who have yet to sign on to French proposals for space-based military systems, French government officials said.

French Defense Minister Michele Alliot-Marie said France’s forthcoming military program proposal would reflect the belief that military space technology “is an indispensable condition of our autonomy. We need to make a supplemental effort here.”

Addressing the 12th Annual Defense & Aeronautics Conference here April 27, organized by the newspaper Les Echos, Alliot-Marie said her counterparts in other European nations share her view, but have met resistance from other government agencies, or from their parliaments, when it comes time to allocate spending.

France spends about 400 million euros ($490 million) per year in military space efforts. In addition to major operational systems including the Syracuse 3 telecommunications satellites and the Helios 2 optical and infrared reconnaissance system, France also is investing in small demonstrator satellites.

These demonstrator systems, with a total budget of about 100 million euros per year, are intended to test technologies and to provide low-cost proof to France’s European partners that such systems should be funded multilaterally.

The French arms procurement agency, DGA, is responsible for capital investment for the French armed forces and has begun talks with its counterparts in Belgium, Germany, Greece and Spain on a next-generation space-based reconnaissance effort, DGA officials said April 25.

Addressing a press briefing here on DGA’s annual figures — including 10 billion euros in contracts to industry — DGA head Francois Lureau said his agency has begun early studies of what a post-Helios 2 system would look like. Belgium, Greece and Spain, all of which are taking minority shares in Helios 2, are part of the effort.

Germany and Italy are developing their own radar reconnaissance systems and have agreed that future space-based reconnaissance systems should be more easily interoperable with the next-generation Helios.

DGA said a third of its research and technology spending in 2005 was for technology demonstrators, including the two Spirale missile-warning satellites and the four small Elint satellites to listen in on ground-based radars. EADS Astrium is prime contractor for both programs, and the French space agency, CNES, is co-financing the Elint program, budgeted at 170 million euros including launch and operations.

Lureau said DGA backed the recent decision by Alcatel to sell its satellite divisions to Thales Group, which specializes in defense electronics, because it will put a satellite manufacturer — Alcatel Alenia Space — under the same roof as the builder of terrestrial communications links. Thales and Alcatel share the lead roles for the Syracuse 3 telecommunications satellites’ ground and space-based hardware.

Lureau said he would reserve judgment on whether Thales, which now will become one of two principal satellite manufacturers in Europe, should accept an offer to purchase EADS Astrium, Europe’s other big satellite prime contractor.

EADS, Europe’s biggest aerospace company, wants to own a piece of Thales to reinforce its defense-electronics position and has proposed exchanging EADS Astrium for an ownership stake in Thales. Thales and Alcatel have rejected the idea.

But Alliot-Marie said she backed the merger idea as a means of strengthening Europe’s position in the global defense and technology marketplace.

Alliot-Marie said the merger would not lead to a monopoly because satellite-component builders would continue to compete with each other. But even these second-tier companies need to consolidate to remain competitive in an industry that requires considerable research and development spending, she said.

EADS Co- chief Executive Noel Forgeard said the idea of a three-way merger remains sound, but that EADS would not continue to push for a merger that was not wanted.

“We had an offer on the table; it was not accepted,” Forgeard said at the same conference at which Alliot-Marie spoke April 27. “Now it’s time for us to move on. We think our reasoning was solid, and we’ll see what the future holds. In the meantime, we all have other things to do.”

Thales Chief Executive Denis Ranque told the conference that the EADS bid came too late in the Thales-Alcatel negotiations to be accepted, especially since EADS had insisted its offer be considered at the same time as Alcatel’s. Ranque said Thales remains open to future consolidation possibilities in the satellite sector, but that such a merger must be certain to have the backing of the government agencies that purchase satellites in Europe. It is not clear, he said, that Europe’s governments share the French Defense Ministry view that such a merger would be a good idea.