According to the very well informed Michel Cabirol in Le Tribune, President Macron could sign a new Defense contract with Egyptian President Sissi on the occasion of his official visit to Cairo from January 27 to 29, 2019. This would involve from an order of 12 Rafale additional,complementing the 24 units acquired in 2015 by Egypt, the French aircraft's first export customer.
This signature will not fail to raise questions about the sustainability of Egypt's outstanding debt with France, which has already reached €6 billion today. Beyond the American blockage concerning technologies on board the SCALP missile, it is this question of the outstanding amount which was mainly responsible for the delays in reaching an agreement with Cairo.
This question is also at the heart of the difficulties encountered by Naval Group in the negotiation with this same country for the construction of 2 additional Gowind2500 corvettes, or in the negotiation with Greece regarding the FTI Belh@rra frigates.
However, it may well be that the paradigm used to assess the sustainability of this outstanding amount, and the associated financial risk, is, in some way, erroneous. Indeed, the social and tax revenues generated by such contracts greatly mitigate the risk of customer default for public finances. So, a contract for 12 Rafale and equipment, which we will estimate here at €2 billion, generates €500 million of injection into the French Defense industry over 4 years.
According to studies carried out in Defense employment areas, 1 million euros invested in the Defense industry leads to the creation (or maintenance in activity) of 10 direct industrial jobs, to which are added 9 indirect jobs, of under -processing. These 19 jobs in turn generate 8 induced jobs, linked to employee consumption. These 27 jobs produce on average €28.000 in social and tax revenue each year. In addition, an unemployed person costs the State, on average, €26.000 per year in social benefits and support measures. Our 27 jobs therefore generate a budget balance of €1.458.000 per year, or one and a half times the amount initially invested.
This approach, resulting from the Positive Valuation Defense doctrine, radically changes the perception of export risk. While we must obviously not sell defense equipment indiscriminately, it is above all a question of assessing the risk not in terms of the financial commitment alone, but of the budgetary balance generated.
It also highlights the role of subcontracting in the National Defense economic model. Thus, in the case of Rafale, the vast majority of the added value of the device and its equipment is actually produced in France, and the figures given above are therefore consistent. This is not the case for the Gowind2500 corvettes, a significant part of the value of which is imported, greatly reducing the real economic efficiency of exporting.
In any case, taking into account the budget balance in export programs would be likely to open up significant opportunities, or even to model very attractive and very competitive offers, even in the face of countries with labor costs. inferior works, such as Russia or China. This is therefore a significant lever in the international competition that is underway to maintain a powerful and autonomous defense industry in France.