FCAS, MGCS, EuroMale ... Franco-German defense cooperation could be structurally unstable

Since the election of President Macron, industrial cooperation in Defense matters with Germany has become a high priority area of ​​French Defense industrial policy.

Thus, in less than two years, 4 major cooperation projects have been announced: the FCAS for an air combat system by 2040, the MGCS for a new heavy armored combat vehicle by 2035/2040, the CIFS for artillery new generation, and the MAWS for a new post-2030 maritime patrol device. Added to this is the EuroMale program, a European medium altitude, long endurance drone, with Spain and Italy.

The preparatory work for these projects has already started, as well as the questions of industrial sharing between the countries: To France the management of the FCAS, Germany ensuring that of MGCS and the EuroMale. Tensions have already appeared in this regard, whether regarding the management of the “System of Systems” component of the FCAS, requested by Airbus DS, or regarding a pPossible merger between Rheinmetall and Krauss-Maffei Wegman, which would be likely to significantly unbalance the balance of power with the French Nexter in the KNDS group, raising fears of negative effects on industrial sharing and the French subcontracting chain.

But it is above all the choices made on the industrial balancing of projects which are likely to endanger, not a program, but the entirety of Franco-German cooperation.

Indeed, by distributing responsibilities and industrial sharing between programs, and not within programs, the French and German authorities have artificially linked their destiny, so that if one of the programs were to be abandoned or suspended, it isentire cooperation which would find itself unbalanced, with a major risk of implosion.

In addition, this will also be likely to create structural imbalances if a program were to open up to other European countries, and not the others. This probably explains Paris' lack of urgency towards the Spanish request regarding the FCAS.

Finally, note that this cooperation is not without arousing strong opposition in Germany, many elected officials believing that it is very unbalanced, and largely in favor of France. And it is clear that the difference in potential financial volume between the FCAS and the other programs is such that it will be very difficult to balance the fiscal and social benefits between the two countries, especially since the export market in 20 years remains a strong unknown.

One solution could be to agree toa clause for rebalancing social and tax revenues between the two countries, triggered when the differences observed exceed a certain threshold. Such a measure would be likely to limit the effects of methods of overvaluing acquisition commitments, while providing mechanisms avoiding a significant imbalance does not occur in the event of variations between volume forecasts and the observed reality.

In addition, this approach would make it possible to have a in-depth knowledge of the ecosystem of both countries, and the effects of Defense investment, and therefore to evaluate the effects of this or that decision with regard to the subcontracting chain, induced jobs, and the tax and social return coefficient of the investment Defense industrialist. It would even be possible to offer models optimized by program, or by subprogram, so as to obtain the best budgetary efficiency between the two countries.

Associated with a design in the form of “ Program schedule » to take into account the divergences linked to exports, budgetary compensation and knowledge of the budgetary efficiency of investments on both sides of the Rhine, would make it possible to significantly reduce structural risks which threaten all Franco-German defense cooperation.

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