France will not benefit from the increase in military budgets

“Si vis pacem, para bellum. » At the gates of Europe, the war waged by Russia has unearthed the Latin phrase that arming oneself would be the best way to ensure peace. Defense budgets are on the rise in many European countries, the most spectacular increase coming from Germany: 100 billion euros will be immediately released there to catch up on the industrial backlog, and 80 billion euros there will be spent each year by 2025. With 41 billion euros planned for 2022 (compared to less than 36 billion euros in 2019), the French defense budget is also continuing the increase provided for by the latest defense law. military programming (LPM), covering the years 2019-2025.

“Since the mid-1980s, these LPMs have not been well adhered torecalls Julien Malizard, Deputy Holder of the Defense Economics Chair at IHEDN, in particular because of a belief in a safer world allowing to cut back on investments. »

From the wave of attacks in 2015, credits began to rise, and the Rafale, flagship of the French defense industry, to be exported. Seven years later, Rafale sales to the United Arab Emirates and Indonesia, combined with a likely collapse in Russian exports, could make France the second largest exporter in the world in 2022.

Will the conflict in Ukraine consolidate this rank? “The period may be favorable for the defense industry, but not immediatelytempers Julien Malizard. It is used to operating on very long cycles, since certain products currently under development will enter service in 2040 and will remain there until the end of the century. » Dassault has already full order books and could find it difficult to increase production, due to recruitment difficulties and disrupted supply chains.

The appetite of other states for French production is far from certain. “Our trade surplus of 8 billion euros in 2021 proves that we have interesting materialnotes Senator Cédric Perrin, vice-president of the “foreign affairs, defense and armed forces” commission. However, via NATO, the market is totally dominated by the Americans. » In mid-March, Germany announced its intention to buy thirty-five American F-35s, dampening the French hopes aroused by the spectacular increase in credits allocated to defence.

The German announcement caused a great stir, as the country has been engaged since 2017 in the very expensive Scaf (future air combat system) project, which brings together Dassault and the German part of Airbus, and whose central object is an aircraft to succeed the Rafale from 2040. “We started from a political will, especially French, to build European defense sovereigntyexplains Mourad Chabbi, professor of geopolitics at Grenoble School of Management. Without taking enough account of what the manufacturers wanted to do. »

Dassault would like to keep the project management of the whole project, which Airbus disputes, which does not wish to be confined to production. As for the Spanish part of Airbus, which entered the game later, it says it is ready to finance the project… if it brings in business on its soil: this is the theory of the “fair return”. “History shows that many military programs are delayed by the theory of ‘juste retour'”emphasizes Julien Malizard.

A thorny issue which summarizes the difficult cooperation between States with different objectives and which weakens their commercial strength: the French want equipment capable of being deployed in external operations… and of being exported to its historical customers (Middle Eastern) or more recent (Asian); the Germans are attached to the defense of the national territory and do not envisage exports outside NATO.

On land, Franco-German cooperation is no more advanced in the tank project of the future, succeeding the French Leclerc and German Leopard tanks, associating the French Nexter with the German KMW within KNDS. This time, while the project management was entrusted to German companies, it was the French who opposed their proposal for a new distribution of costs.

“We consider that we form a couple with Germanysummarizes Cédric Perrin. But she only sees us as a partner. » In this context, French industrialists are going to study closely the merger proposals coming from English, Swedish or Italian companies for future cooperation. Without giving up its favorite markets, which are not in Europe.


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