Successively monopolised by the Greek debt crisis and massive migrant influx, the European Union (EU) had little time in 2015 for important announcements concerning its defence policy and weapons industry. Nevertheless, recent terror attacks in Paris combined with external pressure on France’s southern and eastern borders should remind European Union (EU) leaders of the necessity of a multilateral defence approach. If the 28 states frequently struggle to find a political coherence to their union, they must acknowledge that instability at their frontiers, in Ukraine, Turkey or North Africa, requires a common strategic answer which should overcome usual national gerrymandering and EU institutions paralysis.
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A more sustainable arms industry, allowing reinforced military capability and security of supplies, is at the heart of the issue for the EU. However, persistently decreasing defence budgets in Europe jeopardise the sustainability of the EU defence industry, with less economies of scale and scattered investments.[1] For that, terms such as ‘consolidation,’ ‘innovation’ or ‘interoperability’ have often been thrown in reports and other mass produced guidelines by EU officials over the past decades. The December 2013 European Council made a clear assessment of the state of its defence industry at the time, pleading for more integration of its industrial actors, more operational effectiveness of its armed forces through interoperability, and more investments in dual-used technologies and small and medium-sized enterprises (SME).[2] Consequently, the member states’ contribution to the European Defence Agency (EDA), a Brussels-based agency promoting European cooperation in defence and security matters, has been upgraded to €29.16 million in 2015. More than ever, the EU would like to see team work between its member states. Two years later, where are we?
Certainly 2015 has been a year of slow but steady progress for joint European development programmes. First, this article wishes to underline what might be the most significant programme both in terms of military capability and innovation for the European defence industry: the joint-development of Remotely Piloted Aircraft Systems (RPAS), commonly called drones. If the RPAS programme hardly gets the main headlines, we must pay tribute for its stabile progress and its lingering strategic relevance with time passing and new threats arising.
Today, the main European armed forces need to order their Medium-Altitude Long-Endurance (MALE) drones from foreign suppliers. Last December, France ordered a third batch of General Atomics’ Reapers drones to equip its troops, currently fighting in Africa and the Middle East, expected to be delivered in 2019.[3] The United Kingdom is also a loyal customer of the American drone industry. This trend is expected to change since France, Germany and Italy initiated in May 2015 an initial €60 million study programme for the development of a European made MALE RPAS, operational by 2025. The study was entrusted to three meaningful companies: the transnational Airbus Defence & Space, the French Dassault Aviation (producer of the Rafale aircraft), and the Italian champion Finmeccanica. With a genuine European drone programme eventually on the cards, 2015 has been a decisive year for the future of EU unmanned aircraft production.
Another important step has been taken in the perspective of a more integrated European defence industry. The rapprochement between the French Nexter and the German KMW, two land-systems manufacturers, in a holding-company named KANT was announced in December 2014 by the leaderships of both companies, and signed the 29 July 2015 in the presence of French and German government officials. With a cumulative turnover of €2 billion and around 6000 workers, KANT became a de facto European leader of land weapon systems. The perspective of a new battle-tank supposed to replace the historical Leclerc and Leopard models has been raised, but nothing concrete has emerged so far. Maybe some time should be given to KANT which held its first supervisory board meeting in Amsterdam (where the holding is based) on 15 December. At this occasion, the CEO of Nexter, Stéphane Mayer, and the chairman of the executive board of KMW, Frank Haun, have been appointed CEOs of the newborn company. Critics would notice that KANT, whose cumulative turnover hardly compares with European giants such as BAE Systems ($25.7 billion in 2014) or Airbus ($14.5 billion in 2014)[4], does not even rank amongst the top 10 European arms-producers. Yet, such mergers are precisely what the EU needs in order to rationalise its overstretched defence industry and to develop interoperability between its member states.
Other noticeable joint programs were raised along the year, giving some promising signs to more European cooperation and interoperability. The European Air Transport Fleet (EATF) project is one of them. Initiated by 20 European nations, including France, Germany, Italy and Spain in 2011, the EATF aims at promoting a European air transport community. Phase 1 of the project, which ended in 2014, focused on the harmonisation of training and procedure. Phase 2 was launched in 2015 with the inauguration of a multinational training centre in Zaragoza, Spain, and continuation of rules, tactics and procedures harmonisation. “European airlift is being trained like never before and interoperability between Member States keeps growing” explained enthusiastically Laurent Donnet, EDA Project Manager Airlift & Air-to-Air Refuelling in a January 2015 interview.[5]
Air-to-air refuelling is probably at the top of European defence weaknesses that EU officials are trying to resolve. Nobody forgot that during Libya’s intervention in 2011, boldly initiated by London and Paris, 80 per cent of British and French air forces refuelling were operated by the Americans. With the prominence of air strikes in current and future military interventions, as illustrated by the fight against Islamic State, air-to-air refuelling capacities is a strategic asset for European powers wanting to preserve the global outreach of their armed forces. The United Kingdom is privileging its Future Strategic Tanker Aircraft national programme, consisting of A330-200 aircrafts converted by the British company QinetiQ. But France joined Germany, Italy and the Netherlands for a groundbreaking European Air-to-Air Refuelling Training in April 2015, destined at mutualising their scarce tanker fleets and at preserving European know-how.[6]
Eventually, such kind of European initiatives to develop jointly air-to-air refuelling capacities should advantage Airbus tanker aircrafts. A330 MRTT was preferred by the Dutch-led Multinational MRTT Fleet (MMF) in 2014, when the Netherlands, Poland and Norway decided to mutualise their investments in tankers and to operate jointly their aircrafts. Illustratively, Germany announced last December its willingness to join the MMF after having recognised the efficiency of such multilateral cooperation and the capacities of the A330 aircraft. According to Colonel Ludger Bette of the Luftwaffe, speaking on 1 December 2015 in Seville, Germany will sign the current memorandum of understanding in 2016 and possibly invest in three more aircraft.[7] In the longer term, European air forces will tend to privilege the long-awaited Airbus A400M aircraft, despite an accidental crash in May 2015 only two years after its release. Germany relies on the A400M model to replace its old Transall C-160, while France and the UK are happy to balance their US-dependency (both are historical purchasers of Lockheed C-130 Hercules) with European made materials. Thereby, 50 units of A400M is to be delivered to France, 40 to Germany, 27 to Spain and 22 to the UK.
By looking at 2015, one can be satisfied with the overall progress made towards more consolidation of the European defence industry and better interoperability of European armed forces. Projects are numerous, and frequently involve the main European military forces (namely France, Germany, and the United Kingdom). In addition, concentration of efforts on air force capacities development is a good sign when military operations and global outreach primarily depend on aircrafts. The European defence industry is then consolidated on its two legs: investments in cutting-edge technologies, and interoperability of its European clients allowing rationalisation of orders. However, this positive picture must be tempered by some structural flaws.
In a 2015 interview[8], Mauro Moretti, CEO of Finmeccanica and President of the AeroSpace & Defence Industries Association of Europe, gave his recommendations for a better European defence industry. His statement, straightforward, defined five issues: ‘better [spending of] the available resources,’ ‘[concentration of] investments in the sectors with the best growth prospects,’ ‘more […] cooperative programmes,’ ‘[better] use of research and development related to the application of dual technologies,’ and ‘supporting the Small and Medium Sized Enterprises.’ One would have recognised almost word for word the recommendations delivered by European leaders during the already evoked European Council of December 2013. Mr Moretti’s words are actually a representative sample of what political and industrial leaders typically wish for the European defence industry. With the passing ofg the years, the EU is still confronted by its die-hard structural flaws.
European states are still globally reluctant to engage in common acquisitions and joint-developments. Despite some willing efforts already described, 2015 was another year of massive imbalance between modest cooperative programmes and overwhelming national development programs and investments. During the last EDA Annual Conference, held on 16 November 2015 in Brussels, Giovanni Soccodato, Finmeccanica Vice President and a respected voice of the European defence industry, complained that “only 12 per cent of European defence Research & Technology programmes are cooperative [while] 84 per cent of procurement is still national.”[9] Concretely, European states still tend to establish their defence procurement programmes individually, reinforcing the ramification of the European defence industry.
This tendency was confirmed again in 2015 throughout Europe’s main acquisition programmes. Very few of them were made in the spirit of cooperation, despite being between countries which have frequently similar strategic concerns and budgetary constraints.
Things changed since Great Britain’s Prime Minister David Cameron and the former French President Nicolas Sarkozy signed a treaty for defence and security cooperation, in London in 2010.[10] At that time an agreement was imagined to “improve dialogue between the defence companies of both Parties and foster their rationalisation with the objective of enabling the purchase of equipment best suited to the performance and cost requirements of both Parties.” Such cooperation materialised by the joint-development of three aircraft carriers, one of which France was to acquire. Five years later, France has withdrawn and the British government faces criticisms about its £6 billion valued acquisition of two aircraft carriers, said to be increasingly irrelevant in the face of the new threats confronted by the UK, most notably terrorism.[11]
The 2015 Strategic Defence and Security Review was instructive about future British military investments, most notably concerning the so-called Joint Force 2025.[12] Within this overhauling of its armed forces, London plans the acquisition of Typhoon combat jets and A400M, both European manufactured. But the Joint Force 2025 also relies on foreign contractors, notably Americans: 138 Lockheed Martin’s F-35 and nine Boeing P8 Maritime Patrol Aircraft are included in the programme. Furthermore, a £859 million demonstration phase contract was signed in 2015 with BAE Systems for the development of newly designed Type 26 frigates, aimed at replacing ageing Royal Navy’s Type 23. The ‘Global Combat Ship’ impresses for its capacities at sea, but it might as well become the British equivalent of the French Rafale aircraft: a brilliant piece of technology too complex and costly to find its place in the global market. Hence, no European country but Germany has so far shown any interest in acquiring the ship.[13]
France, the other bridgehead of the European defence effort, has not been much more interested than its British counterpart in a more consolidated defence industry. Two trends must describe Paris’ attitude in 2015: the conduct of its military operations in fighting terrorism and the pursuit of a competitive national defence industry. Regarding external military operations conducted by France, mainly in Saharan Africa and in the Middle East, Paris had few choices but to rely on existing network of alliances rather than pushing for an elusive European defence effort. When the French Defence Minister Jean-Yves Le Drian called for more European help in the fight against terrorism after the 13 November attack in Paris, few voices were raised besides Berlin’s plan to upgrade its contribution in the UN peace-keeping mission in Mali to 650 troops.[14] Overall, despite dramatic events of the past few months, 2015 was another frustrating year with regards to a European defence, with member states irremediably stuck in divergent military strategies. Consequently, France tends to ride alone when it comes to its defence industry.
2015 was a year of welcome success for Rafale aircraft, the emblematic French fighter jet, on the export market. With orders from Egypt, Qatar and India, the aircraft signed the first export delivery contracts of its history. This is good news for Dassault production lines and French defence budget, but rather bad ones for the European defence industry. No less than three different multirole fighter jets are currently produced by divers European states: Rafale (France), Eurofighter Typhoon (trans-European), and Gripen (Sweden). Even worse, they are frequently in direct competition with each other on international tender offers, like in Brazil in 2013, when the United States can propose its best seller Boeing F-18. Facing huge costs of developments for a next-generation aircraft similar to the American F-35, few projects are emerging from the European defence industry. For the rest, apparent successes sometimes hide grimmer realities. The French-German holding KANT might develop a new battle-tank for the two countries in the near future, but as emblematic as this project would be, it should not hide the increasing irrelevance of such heavy-armoured vehicles on modern battlefields. Orders from France and Germany are actually not expected to exceed a few hundred in total.
More generally, 2015 was an ambivalent year for the European defence industry. A range of joint-development programmes and multinational military trainings were launched or reaffirmed, giving some hope in the long term for a consolidated European cluster and more interoperability between European armed forces. Remarkably, specific technologies are targeted in order to answer peculiar needs of European countries like air-to-air refuelling or unmanned combat aircrafts. This is good from a militaristic point of view, but bad from a large-scale economical perspective because the absence of a global industrial policy keeps the EU stuck on its traditional flaws: internal concurrence, scattered investments, few economies of scales, and a general lack of interoperability. Consequently, 2016 will see the perpetuation of old preoccupations for the EU, from which guidelines and recommendations will continue to flourish.
[1] Military Spending in Europe in the Wake of the Ukraine Crisis, Stockholm International Peace Research Institute, Stockholm, 13 April 2015.
[2] Conclusions of the European Council (19/20 December 2013), General Secretariat of the Council, Brussels, 20 December 2013.
[3] Pierre Tan, “France Orders New Batch of Reapers,” Defense News, 11 December 2015.
[4] The SIPRI Top 100 Arms-Producing Companies, 2014.
[5] European Air Transport Fleet enters new phase, European Defence Agency, Brussels, 19 January 2015.
[6] European Air-to-Air Refuelling Training 2015 Factsheet, European Defence Agency, Brussels, 30 March 2015.
[7] Beth Stevenson, “Germany to join multinational tanker effort,” Flightglobal, 2 December 2015.
[8] Mauro Moretti, “Rationalisation is the key to creating European industrial champions,” European Defence Matters, Issue 9, European Defence Agency, Brussels, 2015: 22-25.
[9] “EDA Annual Conference: because ‘European Defence Matters,’” European Defence Matters, Issue 9, European Defence Agency, Brussels, 2015: 44.
[10] Treaty between the United Kingdom of Great Britain and Northern Ireland and the French Republic for Defence and Security Co-operation, London, 2 November 2010.
[11] Richard Norton-Taylor, “Huge question marks over Cameron’s pair of £6bn aircraft carriers,” The Guardian, 23 November 2015.
[12] National Security Strategy and Strategic Defence and Security Review 2015, HM Government, London, November 2015.
[13] Andrew Chuter, “Royal Navy to Reduce Frigate Buy, Design Lighter Warship,” Defense News, 23 November 2015.
[14] Auslandseinsatz der Bundeswehr: Mehr Soldaten nach Mali, Die Bundesregierung, Berlin, 28 January 2016.