France is often characterised as a country where the government still keeps a great power in influencing corporate restructuring and ownership structure. This, it is argued, represents an obstacle in the process of creating a single European market for corporate control and produces inefficiencies whose costs are borne across national borders. In the case of the defense industrial base, in particular, the consolidation into a reduced number of large European corporations is hindered by French dirigisme. In this paper I analyse the tortuous path leading to the partial privatisationand consolidation of the French defense industry, identifying the initial obstacles to the adoption of a market logic. I argue that the recent merger of Aerospatiale and Deutsche Aerospace and the progress in corporatising Airbus cannot be understood without a careful investigation of the simultaneous process to define a common European defense identity.