How can we bring the French defense effort to 3% of GDP in 7 years, without widening the deficits?

The Defense Base offers an innovative and relevant approach to meet the challenges of financing the defense effort in France in the current context marked by strong budgetary constraints, and the needs for modernization and extension of the country's military capabilities as well. important.

In the first part of this article, we presented the structure and paradigms underlying this financing approach based on four pillars: a financing company offering equipment rental for the armed forces, a financing model with recourse to savings, a modern analysis of the budgetary efficiency of defense industrial investments to improve the sustainability of the effort, and a new paradigm for the design and long-term use of defense equipment.

In this second part, we will detail the application of this model for the four major players in this issue: the Armed Forces in order to meet their equipment needs, the French Defense Industrial and Technological Base to optimize its efficiency and attractiveness particularly in terms of exports, public finances and regional planning policy, as well as its applicability to cooperation programs.

The Defense Base for Armies

The Defense Base is above all designed to allow armies to have equipment and operating credits consistent with the evolution of the global threat. Indeed, if the action of the project focuses above all on the financing of major equipment, its implementation would allow the Armies to break down the use of their credits in a flexible and efficient way to meet security challenges in the short, medium and long term. term. 

An investment bubble to meet immediate challenges

Firstly, the SD would allow the Armed Forces to see their equipment capabilities increase very quickly and significantly. In the graph opposite, the hypothesis retained is an increase in equipment investments of €5 billion in 2025, to reach €20 billion in 2032, excluding inflation.

Rental costs, for their part, evolve progressively from €500 million in 2025 to €18,5 billion in 2039, based on an interest rate of 2,5% per year, a V0 at 10%, a VR at 35% and leasing over 15 years.

The gradual increase in investments responds to industrial constraints. On the basis of a defense effort brought to 3% of GDP over 7 years (constant euros), the model then generates a budgetary added value for the armies of €20 billion beyond the €20 billion increase in credits allocated to equipping the forces. 

Equipment eligible for the Defense Base

The Defense Base makes it possible to finance numerous defense equipment and major impact programs through its model, as long as they can potentially be re-exported at the end of the leasing.

This therefore excludes systems dedicated to nuclear deterrence, as well as equipment with a limited effectiveness potential over time that does not allow them to be exported under good conditions, such as certain munitions.

However, the main needs of the armies in terms of equipment are precisely based on equipment meeting the eligibility criteria for the Defense Base. 

The transfer of available credits to critical positions

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