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.

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

1- "No country can develop the defense technologies to come on its own"

This is one of the two main arguments put forward to justify Franco-German cooperation concerning the SCAF program.1. The right technologies needed to develop a next-generation combat aircraft program would, according to this premise, be beyond the reach of any single country. Which is perfectly wrong.

Presentation of the model of the model of the new combat aircraft of the SCAF program at the Paris Air Show 2019

Indeed, the French Industrial and Technological Base integrates an experienced aeronautical manufacturer, Dassault Aviation, one of the main aircraft 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 missiles, MBDA. These 4 companies would, without difficulty, be able to carry out the SCAF program. It should be noted, moreover, that the European partners of the program, such as Airbus DS and MTU, have never designed combat aircraft in autonomy, or turbojets for combat aircraft. The argument is so questionable that, from the launch of the program, France has constantly tried to favor industrial sharing on the basis of skills, which it knows how to master, not on the basis of economic sharing, unfavorable to the final performance of the program. Which was, of course, rejected by both companies and the German government ...

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

Second argument advanced by both SCAF and MGCS2, sharing of design costs, and optimization of manufacturing costs. The reasoning is simple, by sharing the development costs with several people, and by seeking the best subcontractors on larger quantities, the prices of the equipment will be reduced. A theory which, unfortunately, has only very rarely been confirmed in practice. Indeed, once past the initial objective, each country will soon have to 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 according to 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 € 15m, out of an overall program of € 8,5bn for France.

Italian FREMM share less than 15% of component with French counterparts

In addition, this reasoning does not take into account the reality of the budgetary return generated by the Defense industry. The Defense with Positive Valuation doctrine has shown that a 100% French program generated a budgetary return of € 1,45 million (excluding exports) in the State coffers per million euros invested, generating the creation of 27 annual jobs otherwise. If the budget 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 extend the potential accessible European 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, in particular from the United States. In fact, it is not. The Tornado program was not chosen by any European state apart from the participants in the program, and the Typhoon program will have been chosen only by Austria, in very limited quantities, apart from the 4 member countries of the Eurofighter consortium. In the end, the results recorded by these 2 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, yet built in cooperation with Italy, while German submarines, without design cooperation, were chosen by several countries. This premise is therefore not based on any observed reality, and is more of a wishful thinking than an objective observation.

Rafale like Typhoon have not been very successful in European air forces

4- "This will make it possible to be stronger against the United States"

This argument, a modern version of the proverb “Union is Strength”, supposes that by federating several European countries around the same program, and the same objective, it will be possible to face political and technological power. American in equipment programs, particularly in Europe. In fact, this assumption has never been proven for major programs. Thus, the F35 has won in Belgium, the Netherlands, Denmark, Norway (not a member of the EU), but also in Poland, Romania, and Greece, without the Typhoon, yet federating 4 European countries, could not oppose it. Likewise, the Tiger helicopter bringing together 3 European countries has never succeeded in winning in Europe against the American AH 64 Apache. Finally, the Patriot PAC-3 system has 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 higher performance than the American system, and more competitive price. To face the United States, European industrial cooperation does not seem to be an effective solution.

The American F35 won in Europe against the European Typhoon

5- "This will prevent fratricidal export competitions"

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

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- "You have to be able to deal with emerging players, such as China, Turkey, or South Korea."

Sometimes presented as one of the objectives of industrial defense partnerships in Europe, the emergence of new players in 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 such as to offset the commercial and political arguments of these emerging countries, so as to preserve the overall volume of the market addressed. Argument more than questionable, if it is. Indeed, one of the main assets put forward by emerging countries is based on the price of the equipment offered. Thus, a Chinese Type 054A frigate is offered for less than $ 160m, where a European frigate with the same performance cannot be offered below the $ 500m mark. In addition, these countries do not bother with political considerations, and are often not signatories of 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.

China offers the Type 054A frigate at $ 180m for export, 3 times cheaper than an FTI Belh @ rra of the same tonnage and the same firepower

7- "We must strengthen European strategic autonomy"

The last justification put forward to support the current model of European defense industrial cooperation, highlights its action to strengthen European strategic autonomy, in particular vis-à-vis the United States. This argument is the most questionable of all, insofar as this objective is far from being shared by all European players. The notion of strategic autonomy is above all a French notion inherited from Gaullism, and deterrence, aimed at guaranteeing autonomy of decision and action in the country. "We must be able to choose our wars, and to win them" maintained General de Gaulle. In fact, no European country today, other than France, seeks to free itself from the protective American bubble, which, of course, explains the very many commercial successes they are recording on the old continent. And for good reason, the United States are today essential to the balance of powers, and therefore to deterrence on a continent-wide scale, against Russia, as they are essential in terms of logistics and intelligence capacity, even in France, for external interventions. In fact, Strategic Autonomy today boils down for Europeans to no longer depend, for the defense equipment produced, on American ITAR regulations, in particular concerning exports, the United States using it to secure more commercially advantageous positions. It is therefore a very relative objective and, what is more, very little committing in the medium or long term, for the European countries, which quickly changed their position to come back to huddle against the American ally at the slightest alert. Even the recent German declarations on 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 building a European super heavy helicopter, for the benefit of Sikorsky.

Italian Leonardo's MALE Falco Xperience drone presents its ITAR-Free construction as a commercial argument

Conclusion

As we can see, the arguments put forward by both political and industrial authorities to justify European defense cooperation programs are considerably lacking in materiality. In addition, these actions are very often carried out to the detriment of the BITD and French national industrial know-how, to support an idealized French ambition that is little shared at European level. When France talks about defense industrial cooperation, the key word for her is the word "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, 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 need 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 French economy and La Défense, but limits the ambitions and chances of success of the project itself.

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

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