France continues to flourish on EU arms sales market

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An increasing number of EU member states is buying weapons ‘made in France’. After its exports were high in 2018, France is even expected to top those numbers in 2019. EURACTIV’s partner La Tribune reports.

France’s sharp increase in arms sales to other EU member states in 2018 will not turn out to be a one-off as its arms exports in 2019 are likely to confirm this trend.

For example, Naval Group has already won a significant contract worth more than €2 billion for the construction and maintenance of twelve mine action vessels for the Belgian and Dutch navies.

The French group was also selected by Romania to build four Gowinds manufactured in Romania in partnership with Romania’s largest shipyard, the Santierul Naval Constanta (SNC) based in Constanta. The contract is worth €1.2 billion, provided, of course, it is signed by the end of the year.

These Gowinds will be armed with MBDA missiles: VL-Mica (surface-to-air) and Exocet Block 3 (sea-to-sea). The European missile manufacturer has already obtained a modest contract to sell Mistral 3 short-range air defence systems to Serbia.

Airbus Helicopters has signed a contract for the sale of 16 Caracal helicopters to Hungary.

The Czech Republic has purchased 62 Titus low-cost armoured vehicles manufactured by Nexter for an estimated amount of just over €230 million.

Finally, a consortium, bringing together Airbus and Thales Alenia Space in Spain and France, has been selected by the Spanish government satellite operator Hisdesat to build two new-generation secure communication satellites, Spainsat NG I and II (€750 million).

France's weapons exports see sharp increase on European market

France’s arms sales in 2018 were worth €9.118 billion, up 30% compared to 2017. Exports to European countries are seeing a strong increase, according to the French Ministry for Armed Forces. EURACTIV’s partner Brussels2.eu reports.

The 25% benchmark

In 2018, the share of arms exports by French manufacturers to EU member states (orders) exceeded the 25% mark for the first time (€2.29 billion out of a total of €9.11 billion).

Two EU member states, Belgium and Spain, are among the top five customers of French manufacturers.

Belgium signed a contract with France for the sale of armoured vehicles (CaMo) as part of a strategic partnership between the two countries in the field of land mobility (€1.1 billion). Spain signed a contract with France to purchase 23 NH90 helicopters (€550 million). Those two major contracts were signed in 2018.

Italy and the UK exceeded the €100 million benchmark in purchases of French military equipment (€115.1 million and €111.7 million respectively).

“We call for greater European cooperation and a better geographical balance in our orders. This was concretely confirmed in 2018,” was the comment from Armed Forces Minister Florence Parly’s entourage when the 2018 results were presented.

Over the last decade, EU member states generally bought very little from France. This is demonstrated by the figures for the previous two years: 2016 (€486.2 million) and 2017 (€512.9 million).

Over the past ten years, exports of weapons ‘made in France’ even reached the lowest level on several occasions: €375.6 million in 2011, €362.9 million in 2012 and €364.1 million in 2014.

Only the year 2015 (€929.7 million) comes close to the levels reached in 2018. However, that year was a record for French arms exports worldwide, which generated €16.9 billion.

MEPs call for stricter control on arms exports

EU lawmakers stressed on Wednesday (14 November) the need for tougher checks on EU arms exports and demanded a sanction mechanism to be put in place on those countries that systematically fail to comply with common criteria.

Are arms exports to the EU a structural or cyclical phenomenon?

Beyond the €360-million-mark under which France seems unlikely to fall, Paris and its industrialists are looking at major prospects on the European market in the next three years.

Dassault Aviation is currently eyeing Finland’s project of manufacturing more than sixty Rafale aircraft.

Switzerland (certainly outside the EU) has also budgeted 6 billion Swiss francs to strengthen its military. In 2021, Bern should also select a long-range ground-to-air defence system (Patriot versus SAMP/T), a programme worth 2 billion Swiss francs.

Naval Group is also targeting several significant projects, including one in Greece (two FTI frigates), as well as one in the Netherlands (four submarines).

The trend could, therefore, remain positive for France, provided the French defence industry wins part of these contracts against competitors.

Armed Forces Minister Parly, believes this trend is related to her government’s policy.

“First and foremost, this result (French arms exports in 2019, editor’s note) is linked to the European focus of our export policy,” the minister said.

“This year, 25% of our arms exports went to our European partners, compared to an average of only 10% in previous years,” she explained in her ministry’s report to the French Parliament.

Tools to ‘buy European’

However, Parly’s explanation is only partly true. In particular within the framework of a new tool set up to support French arms exports, inspired by the American Foreign Military Sales (FMS) system.

In response to the growing desire of some client countries to organise their acquisitions through state-to-state contracts, France has given itself the means to do so. It has been setting up government partnership contracts, as it did with Belgium under the CaMo contract.

These partnership contracts are intergovernmental agreements entrusting France only with the role of agent for the award of French public contracts in the name and on behalf of a third country.

The launch of the EU’s permanent structured cooperation (PESCO) in December 2017 to bring out major unifying projects to meet the needs of the European armies and the establishment of the European Defence Fund (EDF) proposed in July 2018 (€13 billion), also represent real progress in this field.

These projects will naturally oblige European countries to buy European weapons to support their industrialists involved in these future European programmes.

“Tomorrow, industrial and operational cooperation programmes will bring our armies and countries even closer together, making our European defence a reality. Behind the export, there is the continuous construction of European strategic autonomy,” Parly noted.

EU lawmakers rubber-stamp European Defence Fund, give up parliamentary veto

MEPs signed-off a deal establishing the multi-billion European Defence Fund (EDF) on Thursday (18 April), giving up parliamentary oversight of the EU’s military subsidies programme.

However, these tools are still far too recent to influence France’s policy on arms exports.  If France now exports much more weapons to EU member states, it is mainly due to a perfect alignment of the stars for French industrialists.

The latter have benefitted from European armies needing to renew their military equipment, a set timetable, as well as French products matching the demand.

Minister Parly has been lucky. No more, no less.

However, the French minister already managed to create tools to ensure the French defence industry continues to be efficient. France’s exports remain crucial for the economic model of French industrialists, and especially for France’s sovereignty.

[Edited by Zoran Radosavljevic]

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