Can the export successes of the defense industry finance the armies?

Although the armies and the defense industry collaborate in many areas, they are struggling to find, today, mutually fertile ground when it comes to supporting arms exports. However, a change in model could make it possible to considerably extend this cooperation, to the benefit of both manufacturers and armies, and their investment capacities for the acquisition of new equipment.

Since 2017, French defense spending has increased significantly, from €34 billion in 2016 to €44,9 billion in 2023, and €47,2 billion in 2024, an increase of almost 40% in just 8 years. The defense effort, for its part, increased from 1,55% of GDP to 1,95% today, with the objective of remaining above the 2% mark across the entire country. LPM 2024-2030.

A deficit in army equipment credits despite increases in defense budgets

Despite this additional budget windfall, the French Armies are still forced to make difficult trade-offs in their equipment programs. Thus, the Gazelle helicopters of the ALAT (Light Aviation of the Army), although already obsolete for a long time, will continue to fly until the middle of the next decade, while waiting for the complete equipment of H160M cheetah from the HIL program.

Gazelle Alat
ALAT's Gazelle helicopters will continue to fly until 2035, awaiting the arrival of all H160M Guepards

Likewise, only 7 of 10 offshore patrol vessels have been ordered to replace the A69 high seas patrol boats, which are still sailing despite their canonical age exceeding 40 years.

Finally, many needs, such as in the field of air defense, the armored weapon, artillery or the fighter fleet, are covered at a minimum in this LPM, which will not go without severely handicapping the performance of the French armies in combat, especially against a symmetrical adversary, if necessary.

The causes of this lack of credits are multiple. Firstly, a large part of the increase in the French defense effort has been absorbed by inflation in recent years, more than halving the reality of the increase in credits in recent years.

On the other hand, the budget of the starting armies, in 2016, was much lower than the budget necessary to cover the normal functioning of the French armies on that date, and this has been the case for more than 20 years. In fact, the armies have had to postpone numerous industrial programs, and must now face accumulated needs far exceeding their investment capacities.

Offshore Patrol Boat OPV Marine Nationale
The replacement of the A69s of the French Navy by the new Offshore patrol boats will not be done equally, despite the needs.

At the same time, the investment capacities of the French State are severely constrained, with public debt exceeding 110% of GDP and today threatened by rising interest rates, firm commitments made to -visits from Brussels concerning the control of deficits, and a growth which, although often better than that of its neighbors, remains insufficient to free up the budgetary margins which would be necessary for the armies, and for their investment capacities.

The Defense Industry, a tool with under-exploited potential by the French armies

In this context, it seems pointless to try to increase defense investments, particularly in the area of ​​arms acquisitions, beyond the effort planned by the 2024-2030 Military Programming Law.

If there is a solution, it can only emerge through the application of new paradigms, likely to profoundly modify the organization of defense industrial investments, as well as the release of credits to achieve this. It turns out that France has a tool adapted to such a challenge, its defense industry.

This is present in almost all defense technological segments, giving the country real strategic autonomy, by almost completely equipping the national armies with high-performance equipment. In addition, it is very exporting with, on average, 40% of its overall annual turnover of €15 billion generated internationally.

defense industry Nexter
The French defense industry allows the country to preserve its strategic autonomy.

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