Banking services: is the defense industry getting the wrong target?

For several years now, companies with a Defense activity have encountered more and more difficulties in obtaining support from French and European banks. Even elementary services, such as investment credits, cash lines, or documentary credits, are refused to them, on the pretext of the sensitivity of the transactions, and the potential consequences on the brand image of the banks if they were to fail. be implicated in arms markets. In an attempt to meet this need, GICAT, an association bringing together land armament professionals in France, presented to the French authorities a project to create a specialized defense bank and an investment fund in the form of a public-private partnership, with the possibility of calling on savings from the French to supply the system.

We will pass on the fact that this model proposed by GICAT is surprisingly similar to the one presented 10 months ago in an article published on Meta-Defense, with the difference that the article recommended a private structure, without state intervention. Indeed, the French Defense Industry, with an annual turnover of nearly € 12 billion, and a market valuation of the main players exceeding € 15 billion, would have ample means to finance such a service for the benefit of of the entire defense ecosystem, without having to appeal, once again, to the guarantee of the State and to public finances.

Large defense companies do not encounter the same difficulties as mid-size companies and SMEs in this sector in accessing banking services.

In addition, as appeared during the study on the Europa-Defense project derived from this article, this issue of access to banking services goes far beyond the Franco-French framework, since the majority of European companies in this sector meet the same problems. However, if all the major players in this industry on a European scale came together to resolve the problem, both the risk and the investment required to launch a European “defense” bank would be very moderate. To paraphrase the moral of Jean de la Fontaine's fable "Le Chartier embourbé", "Help you, and the sky will help you" ...

On the other hand, it seems astounding that the French defense industries do not consider for a single moment to solve the basic problem which leads banks to want or be able to refuse to support the actors of an ecosystem bringing together more than 200.000 industrial jobs in France, and which represents the second largest exporting industry in the country. Once again, it is completely hermetic to questions of image in public opinion of this activity, however widely and easily valued. Because if the French defense industry could rely on the same public support as that of the American industry, or even Russian, the positions expressed by the banks would be much more difficult to support.

The French Defense industry conditions the loan of 400.000 jobs in the country, and represents the second exporting industry after civil aeronautics (which would not exist without military aeronautics)

The hypothesis of the creation of a defense bank is certainly attractive, but for such a solution to see the light of day, it is essential to profoundly modify the overall image of the defense industry in public opinion, not If only to be able to hope to capture part of the country's volatile annual savings, which still represents more than € 70 billion each year. In addition, the large defense companies that oversee the entire ecosystem activity, such as Thales, Naval Group, Nexter, Airbus, Safran, MBDA or even Dassault Aviation, could also use their influence to bring French banks to modify their positions in a lasting way, and this all the more easily as public opinion evolves jointly in the same direction.

In reality, it is not necessary to convince “the banking sector” to support the Defense industry. For a single European bank to declare itself in support of this activity is more than enough to respond to the emergency, and to get the entire banking sector to change its paradigms, for fear of losing significant market shares. And if all the large European defense companies were to transfer their banking activities to this bank, and a large part of the sector's employees did the same, there is no doubt that the situation would develop positively, very quickly, and without State intervention, to recreate normal relations between the banking sector and the defense industry. It would also be the ideal framework for starting a concerted action aimed at changing the image of this industry in European public opinion ...

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