The 7 mistaken premises of the construction of La Défense Europe

The construction of Defense Europe has become, in recent years, the guiding thread of French defense policy, the country sparing no efforts to try to create sufficient momentum to give birth to this initiative. This construction takes several forms, such as industrial cooperation programs, European consolidation of the Defense industry, and Defense programs of the European Union.

Although numerous arguments have been presented to support this policy, their methodical and objective analysis reveals weaknesses in these justifications, which have nevertheless been raised to the level of paradigm. In this analysis, we will study 7 of the main arguments put forward, across the spectrum of operational, political and economic realities, which apply in Europe.

1- “No country can develop future defense technologies alone”

This is one of the two main arguments put forward to justify Franco-German cooperation regarding the FCAS[efn_note]Combat Air System of the Future[/efn_note] program. The technological goodies necessary to develop a new generation combat aircraft program would, according to this premise, be beyond the reach of a single country. Which is completely false.

Model of FCAS Germany | Defense Analysis | Army budgets and defense effort
Presentation of the model of the model of the new combat aircraft of the FCAS program at the Paris Air Show 2019

Indeed, the French Industrial and Technological Base integrates an experienced aircraft manufacturer, Dassault Aviation, one of the main aviation engine manufacturers on the planet, SAFRAN, one of the main companies in terms of Radar, detection systems and avionics, Thales, and a of the main missile maker, MBDA. These 4 companies would, without difficulty, be able to carry out the FCAS program. Note also that the program's European partners, such as Airbus DS and MTU, have never independently designed combat aircraft, or turbojet engines for combat aircraft. The argument is so questionable that, from the launch of the program, France has never stopped trying to favor industrial sharing on the basis of skills, which it knows how to master, and not on the basis of economic sharing, unfavorable to the final performance of the program. Which was, obviously, rejected by both companies and the German government...

2- “No country can finance the development of modern defense systems”

Second argument put forward, both by the FCAS and MGCS[efn_note]Main Ground Control System[/efn_note] programs, the sharing of design costs, and the optimization of manufacturing costs. The reasoning is simple, by sharing the development costs among several people, and by seeking the best subcontractors for higher quantities, the prices of the equipment will be reduced. A theory which, unfortunately, has very rarely been confirmed in practice. Indeed, once the initial objective has been passed, each country will quickly impose its own characteristics which, in the end, will end up reducing the homogeneity of the program to such an extent that any notion of economy will have been erased. Thus, the NH90 program has more than 12 different versions depending on customer requests, and a study on the FREMM program showed that the price difference between the Franco-Italian FREMM program and a 100% French FREMM program, would have been €15 million, out of an overall program of €8,5 billion for France.

FREMM Italy Germany | Defense Analysis | Army budgets and defense effort
Italian FREMM share less than 15% of component with French counterparts

Furthermore, this reasoning does not take into account the reality of the budgetary return generated by the Defense industry. The Defense with Positive Valuation doctrine showed that a 100% French program generated a budgetary return greater than €1m (excluding exports) in the State coffers per million euros invested, leading to the creation of 25 annual jobs in addition . If the budgetary balance of investment in the national defense industry is positive for the State, distributing these investments with other countries mechanically reduces the benefits for public finances, to the point of being able to fall below the threshold profitability. This point is all the more sensitive when the partner overestimates its needs so as to benefit from higher industrial compensation, in order to subsequently reduce the amounts ordered.

3- “European programs expand the accessible European potential market”

This premise assumes that by developing programs between European actors, other European countries will assert their European preference for equipment, by choosing this equipment to the detriment of imported equipment, particularly from the United States. In fact, this is not the case. The Tornado program was not chosen by any European state outside of the program participants, and the program Typhoon will only have been chosen by Austria, in a very limited quantity, outside the 4 member countries of the Eurofighter consortium. In the end, the results recorded by these two European programs will not have been better in Europe than those of the Rafale and mirage 2000 built by France, and chosen by Greece (m2000). Likewise, no FREMM was sold to a European navy, nor a Horizon air defense frigate, although built in cooperation with Italy, while the German submarines, without design cooperation, were chosen by several countries. This premise is therefore not based on any observed reality, and is more wishful thinking than an objective observation.

Rafale Typhoon Germany | Defense Analysis | Armed Forces Budgets and Defense Efforts
Rafale as Typhoon did not enjoy real success in the European air forces

4- “This will allow us to be stronger against the United States”

This argument, a modern version of the proverb “Unity is Strength”, supposes that by uniting several European countries around the same program and the same objective, it will be possible to confront the political and technological power American in equipment programs, particularly in Europe. In fact, this postulate has never been proven regarding major programs. Thus, the F35 has established itself in Belgium, the Netherlands, Denmark, Norway (non-EU member), but also in Poland, Romania, and Greece, without the Typhoon, although it brings together 4 European countries, was unable to oppose it. Likewise, the Tiger helicopter bringing together 3 European countries will never have succeeded in establishing itself in Europe against the American AH 64 Apache. Finally, the Patriot PAC-3 system will have been preferred to the Franco-Italian SAMP/T Mamba system by Sweden, Poland and Romania, and has never been chosen, until now, by a European country, despite superior performance to the American system, and a more competitive price. To face the United States, European industrial cooperation does not seem to be an effective solution.

F35B and Typhoon RAF Germany | Defense Analysis | Armed Forces Budgets and Defense Efforts
The American F35 has established itself in Europe against the Typhoon European

5- “This will prevent fratricidal export competitions”

This is probably the argument with the most materiality, although it is far from absolute. Indeed, by bringing together several actors in the same project, we theoretically reduce the number of possible competitors that will have to be faced in an international competition. However, this would forget that sometimes, an actor can have divergent interests regarding a market, even if he is a partner of the program presented. This is the case, for example, of France and Italy, although partners in the Naval market, who have just signed a very high-profile Joint Venture, and who nevertheless continue to clash violently in Bulgaria and elsewhere. In another area, the partnership with Germany regarding various programs poses numerous difficulties regarding political trade-offs linked to exports. Therefore, the potential export benefits of European cooperation are far from neutralizing the risks and abuses linked to industrial partnerships.

Illustration of the Naval Group Gowind 2500 corvette acquired by Egypt and the UAE Germany | Defense Analysis | Army budgets and defense effort
Despite the creation of the joint venture between Naval Group and Fincantieri, the latter has attacked his partner in Bulgaria for the corvette order Gowind 2500

6- “We must be able to face emerging players, such as China, Turkey, or South Korea.”

Sometimes presented as one of the objectives of Defense industrial partnerships in Europe, the emergence of new players on this market imposes increased competition on each competition, and therefore more tenuous potential successes. The hypothesis put forward is that the joint action of European countries would be likely to compensate for the commercial and political arguments of these emerging countries, so as to preserve the overall volume of the market addressed. A more than contestable argument, if ever there was one. Indeed, one of the main advantages put forward by emerging countries is the price of the equipment offered. Thus, a Chinese Type 054A frigate is offered for less than $160 million, whereas a European frigate of the same performance cannot be offered for less than $500 million. Furthermore, these countries are not bothered by political considerations, and are very often not signatories to international treaties on the regulation of arms sales. European countries are all subject to the same economic, political and legislative constraints, so that, in this area, the increase in the number of actors does not act as a force, the economic and political perimeter of the offer remaining unchanged.

Type 054A frigate Germany | Defense Analysis | Army budgets and defense effort
China offers the Type 054A frigate at $180 million for export, 3 times cheaper than an FTI Belh@rra of the same tonnage and same firepower

7- “We must strengthen European strategic autonomy”

The latest justification put forward to support the current model of European Defense industrial cooperation highlights its action to strengthen European strategic autonomy, particularly vis-à-vis the United States. This argument is the most questionable of all, to the extent that this objective is far from being shared by all European actors. The notion of strategic autonomy is above all a French notion inherited from Gaullism, and from deterrence, aiming to guarantee autonomy of decision and action to the country. “We must be able to choose our wars and win them,” maintained General de Gaulle. In fact, no European country today, other than France, seeks to emancipate itself from the American protective bubble, which, obviously, explains the many commercial successes they have recorded on the old continent. And for good reason, the United States is today essential to the balance of power, and therefore to deterrence on a continent-wide scale, against Russia, as they are essential in terms of logistical and intelligence capacity, even to France, for external interventions. In fact, Strategic Autonomy boils down, today, for Europeans, to no longer depending, for defense equipment produced, on American ITAR regulations, particularly concerning exports, the United States using this to secure more commercially advantageous positions. It is therefore a very relative objective and, what is more, very uncommitting in the medium or long term, for the European countries, which quickly changed their position to return to huddle against the American ally at the least alert. Even recent German declarations in terms of strategic autonomy have not led the country to favor a European anti-air and anti-missile defense solution, in favor of a partnership with Raytheon, nor to consider the construction of a European super heavy helicopter, for the benefit of Sikorsky.

Leonardo Falco Xplorer MALE drone Germany | Defense Analysis | Army budgets and defense effort
The MALE Falco Xperience drone from the Italian Leonardo presents its ITAR-Free construction as a commercial argument

Conclusion

We see that the arguments put forward by both political and industrial authorities to justify European Defense cooperation programs considerably lack materiality. Furthermore, these actions are often carried out to the detriment of the BITD and French national industrial know-how, to support an idealized French ambition that is not widely shared at the European level. When France talks about Defense industrial cooperation, the key word for it is “Defense”, while the majority of our partners are only interested in the word “industrial”. There is no shortage of examples, unfortunately, of this French idealism exploited by our partners at our expense over the years, ranging from the DCNS-Navantia partnership to the Franco-British aircraft carrier.

Does this mean that the Europe of La Défense is a useless project, and harmful for France and its industry?

On the contrary, and the next article in this series will provide the objective arguments justifying the imperative necessity that it represents, both from an industrial and operational point of view. On the other hand, its current form, which results from a faulty analysis of objective realities, is not only counterproductive for the economy and French Defense, but limits the ambitions and chances of success of the project itself.

To be continued :
The 7 reasons why Europe of Defense is Essential
The 7 keys to building a sustainable, unifying and efficient Europe of Defense

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