There is not (or should not be ) an argument that subsidies going under various names of tax releif, sweetheart contracts, below market financing etc etc etc exist. It is a fact of life, so deal with it.
An argument that gets made on the European side is how the nasty american military "subsidizes" civil aircraft manufacture. An example brought up was the Boeing 707. It was alleged that the 707 would not have happened if the military had not ordered the KC-135 and that they are in essence the same airplane and the KC-135 is really a way of cleverly subsidizing the 707. I believe it has been pointed out that Boeing had the 707 program going before the KC-135 was ordered and that they bet the company on the 707 because of all the money it took to develop, test and certificate it.
There are aircraft that are alleged to be "copies" of military aircraft or were developed as military aircraft that end up as commercial aircraft and see how that subsidy works. An example I picked is the T-39 and the Sabre 80 that look pretty much alike and are alledged to be copies. They are not copies, ther eare no interchangable parts. The U.S. military did buy some civil spec Sabres and they are (were, all gone now to the bone yard) CT-39s. The subsidization also works in reverse: Gulfstream Is (with RR Dart engines) as TC-4s, the numerous variants of King Airs used by the U.S. Army and Navy, DHC products, and a number of other instances. And if you get into the subsystems the crossfertilization is also pronounced.
I brought up Galileo because as the reaction against GPS it is so classic.
The U.S. military budget comes from the taxpayers of the U.S. (and all the money the government borrows too, many times in non-U.S. financial markets). This budget is arrived at in the Congress that balances it with all other things the money could be spent on, not just military. In the executive branch GPS is managed by a interagency board based in the Commerce Department. By providing GPS without any direct user charge this is a SUBSIDY of everybody that doesn't pay U.S. taxes. It is political and is deemed a good thing to do in the national interest of the U.S. and it is pretty good for everyone else in the world too. The U.S. has promised for decades to provide the standard positioning service for anybody that wants to use it for anything except shooting/bombing etc people. (we use it for that to reduce the probability of hitting the school/orphanage/etc when we kill bad guys). The U.S. has provided the service as promised and it looks like the policy is to continue this. You are welcome.
Galileio is trying to put up a functionally similar bunch of satellites and is being very sly about who is going to pay for it. Can't get a straight story from the EU about what they are going to charge and how they are going to collect it. Various proposals have come up and all have been shot down, but new ones keep sneaking in. Should people who don't want to use Galileo be required to pay for it? (that was one of the proposals) Should Galileo be required equipage and then oh by the way user fees are required for Galileo? (another one) Should there be a contractual relationship between an air navigation service provider and a user and a fee required ? (still another one) Smells bad to me because once you get a bunch of politicians with a way to charge people for stuff so it generates a pile of cash for them to spend they will not be able to resist using the money for their own political ends.