Pandemic not affecting NATO budgets

25 August 2020

Despite the pandemic, European NATO members have no plans to cut their military budgets or revise their defence doctrines this year, according to statements made by the highest senior commanders of the Alliance and representatives of various ministries of Defence. Quite the contrary, many are considering a further raising of their combat potential as one way to stimulate their economies, which were negatively affected by COVID-19. 

New funding for its military and industrial sectors came in June 2020 when the German coalition government approved a €130 billion package of support to national economics. Of this, an estimated €10 billion will be directed to the German defence sector, and primarily to some of the country’s largest weapons producers.

Germany's Defence Minister, Annegret Kramp-Karrenbauer (left), chats with Chancellor Angela Merkel.

The defence industry has historically been considered a major segment of German national economics. “If we want to revive the economy faster, there is no point in reducing the defense budget, which is part of overall governmental spending,” said Defence Minister Annegret Kramp-Karrenbauer recently.

The approved state allocations will be prioritized towards domestic producers that primarily utilize local employees and subcontractors in their production processes. 

According to local German media reports, the pandemic has not resulted in suspension of any previously announced projects in the German defence sector; those will be implemented in accordance with the existing schedules. 

Moreover, some new projects came under consideration, and implementation has been recently approved by the German Parliament. 

One such project involves funding first stage development of a new tank (the MGCS program). This new funding was approved by a special budget commission of the German Parliament (Bundestag). 

Another major project that also received approval from Bundestag, is the MKS180 project that will see the construction of four multi-purpose ships for the navy, with an option for two more. 

Part of the planned state support is expected to be provided to Rheinmetall, one of Germany’s largest defence contractors. Rheinmetall has recently announced received a large contract with the German government for the production of 4,000 military trucks.

Germany and France signed a framework agreement in April for a joint Main Ground Combat System (MGCS) project to replace the German Leopard 2 and French Leclerc tanks. With this project (to be implemented under German leadership) Germany and France are sending an important signal for “European cooperation” in the defence sector.

The French Ministry of Defence has confirmed an increase to the country’s military budget to €44 billion annually by 2025.  Equivalent to 2% of the country’s national GDP, the new funding level will ensure France is in compliance with the NATO military agreement. For next year, France’s military budget will be increased to €34.2 billion, and provide an opportunity to continue the massive re-armament of its armed forces as had been planned before cuts were implemented.

During the 2000-2015 period, the number of troops as well as military equipment in service of the French army significantly declined compared to 1990s. However further military cuts were stopped by President François Hollande after the November 2015 attacks in Paris.

Part of these new plans will focus on implementation of the Scorpion (Synergie du Contact Renforcée par la Polyvalence et l’Info­valoris­ation) program – a massive rearmament of the French land forces that was initially approved in 2014.

The Scorpion program includes the modernization and upgrade of at least 400 Leclerc main battle tanks. These tanks currently represent the main combat force of the French land forces. France will replace the obsolete VAB armored personnel carrier (initially designed in the 1970s) – with new armored vehicles. The French Defence Ministry has already begun purchasing Griffon and Jaguar 6x6 armoured personnel carriers to replace the VAB carriers.

Both of these vehicles were developed by a consortium of three French companies – Nexter, Renault and Thales – and, under the terms of the contract, the level of unification of their main components and assemblies will reach 70%. This move is intended to significantly facilitate maintenance and reduce costs. The price of each carrier will not exceed €1 million.

The duration of the Scorpion program is 10 years, and the volume of investments in its implementation is estimated at €6 billion. Of these, about €750 million have already been spent on research projects.

Most of these vehicles will be supplied for the needs of the French land forces, while some of them will be sent for exports. Several months ago, the French government reached an agreement with the Belgian Ministry of Defense for at least 417 Griffons and 60 Jaguars to be delivered over the next several years.

In the case of Griffon, the carrier has a weight of 24.5 tonnes and can carry eight troops in full gear. Depending on the specification chosen, it can be equipped with 12.7 mm and 7.62 mm machine guns and a 40 mm automatic grenade launcher.

As for Jaguar, it is supposed to be used as a reconnaissance and patrol vehicle. Designed for a crew of 3 people, it can withstand 14.5 mm armour-piercing bullets and 155 mm shell fragments. The machine is also equipped with anti-tank launchers with a firing range of up to 4,500 meters, and a remotely controlled 7.62 mm machine gun.

According to local analysts, beginning massive supplies of both Griffon and Jaguar carriers will allow France to radically modernize its combat fleet of ground forces within the next decade. That goal will be also be achieved with a new generation of combat tanks that are jointly designed by France and Germany.

In general, France plans to invest about €295 billion in its armament and other military capability by 2025.

Some of the funding will be earmarked for strengthening military intelligence and cybersecurity investments. The volume of state funding of the recently established special cybersecurity department in the French armed forces will be increased by €1.6 billion next year. That infusion will allow it to focus more significantly on its level of cybersecurity. 

As for military intelligence, so far, the country has largely depended on the support of its American allies in this field, however there is a possibility such a situation will change in the short term. As part of these plans, more than €2.5 billion will be allocated to purchase additional reconnaissance aircrafts and drones that will be used by the French military intelligence, as well as the launch of MUSIS and CERES space programs, which involve the deployment of optical and electronic reconnaissance and communications interception satellites. Overall, intelligence staffing will be expanded by at least 1,500 new employees.

Moreover, a massive renewal is planned for the French Navy. Four new Barracuda nuclear attack submarines designed by French shipbuilder Naval Group, eight FREMM multipurpose frigates and two medium-sized frigates will be put in service. In May 2020, the French Ministry of Defense announced plans to replace the country’s only aircraft carrier Charles de Gaulle, whose operational life expires in 2040. The new-generation vessel is expected to be ready by 2038.

In regard to the French Air Force, next year a particular focus will be on the modernization of its tanker fleet, and this will see the old Boeing aircraft replaced by 15 new Airbus A330 MRTTs.

Rafale fighter jet
Rafale fighter jet

As for fighter aircraft, the Air Force plans also include the purchase of at least 28 new Rafale combat aircraft. The 55 existing Mirage-2000s will also be the subject of a massive upgrade. 

The French government also plans to increase funding of its overseas military operations. According to an official spokesman for Florence Parly, the French Minister of the Armed Forces, military operations were constantly underfunded in previous years (€450 million per year over the past four years, which, according to her, is an insufficient figure for operations of such scale).

The French army is currently conducting a number of military operations overseas, primarily in regions of North Africa, Syria and Iraq. Announced plans indicate the annual French budget for such operations will grow from the current €650 million to €1.1 billion by 2021. 

Finally, a particular attention will be paid to the funding of the domestic Sentinelle and Vigipirate counterterrorism operations, which involve the use of French military. As part of these plans, the French military forces will provide assistance to the national police and security services for the reduction of a terror threat in the country.

Plans for the further strengthening of its combat potential this year have also been confirmed by Spain. Although its economy was severely affected by the pandemic, the government of Spain has no plans to cut its military spending either. 

This has been recently confirmed by Pedro Fuster, deputy director general for Inspection, Regulation and Industrial Strategy of the Spanish Ministry of Defence. “We are currently exploring the potential of the industry and major domestic weapons’ manufacturers to find a way out of the crisis,” said Fuster. Accordingly, Spain is studying the impact of the pandemic on the domestic military and industrial complex and will soon submit a report for consideration  by the national government, after which some new steps for the development of  the Spanish armed forces will be taken. 

According to Fuster, steps could include special financial support to local weapons’ manufacturers, the volume of which, however, has not been disclosed. Fuster confirmed that Spain’s military budget for 2020-2021 will not be changed due to negative economic consequences of the pandemic, and there will be no major changes in the implementation of existing state programs in the field of defence.  

Fuster believes that the current financial crisis could become “a catalyst for the implementation of new opportunities” in the defense and aerospace industries […] both at the micro and macro levels.”

In the meantime, Poland is another NATO member from the EU region to have announced plans for further increases of its military budget in years to come. 

According to some local media reports, implementation of these plans will be part of the “Plan for technical modernization of the Polish armed forces for 2021-2035”, which was approved by the Polish government at the end of 2019. 

As  Polish Minister of Defence Mariusz Blaszczak recently stated, investments in the implementation of these plans is estimated at PLN 522 billion (US$133 billion). 

Rearmament of the Polish Air Force is a priority of the newly approved program. This will accelerate implementation of the Harpia project launched in November 2017, and involves the purchases of low-visibility fifth-generation F-35A Lightning II fighters designed by Lockheed Martin to replace the outdated MiG-29 multi-role fighters and Su-22 fighters of Soviet origin. 

The development of low-visibility UAVs with artificial intelligence and ability to operate in conjunction with manned fighters is another priority for this budget. 

Finally, as part of the Obserwator program, which involves the creation of multi-level and integrated reconnaissance system, the Polish Ministry of Defence plans to accelerate purchases of satellites, microsatellites, reconnaissance aircraft and a range of drones.

In contrast to these bold moves by longstanding NATO EU members, there is a possibility that the pandemic may force some of the more recently-joined states, particularly those from Eastern Europe and the former Soviet space to consider reducing their military spending this year. 

This is despite the recent calls of Jens Stoltenberg, head of NATO, to its members to increase their military spending up to 2% of their GDP as previously agreed. 

Still, some leading EU defence analysts suggest that reducing military spending will be associated with serious difficulties, as the decline in the purchasing power in the number of major weapons importers will inevitably affect producers, who will continue to call on their governments to increase subsidies in order to stay afloat. 

According to some Russian military analysts, the effects of the pandemic will affect the plans of many countries in Latin America, Africa, parts of Asia and the Middle East for the procurements of new weapons and combat equipment this year. That may lead to shifts in implementation for some of these programs and possibly their complete cancellation. 

Overall, it seems the pandemic and its consequences will result in a shift towards strengthening national rather than collective security for many NATO members. 

Eugene Gerden is an international writer specializing in global military and defence industries.
© FrontLine 2020