LONDON, UK — In the wake of NATO’s 2014 Summit, and Putin’s aggression in Ukraine, Avascent’s Christina Balis has co-authored an occasional paper with Henrik Heidenkamp for the Royal United Services Institute (RUSI) entitled: “Prospects for the European Defence Industrial Base.” As Director of European Operations for Avascent, Balis often contributes thought leadership to this topic. In this paper, she and Heidenkamp offer an essential argument for the immediate scrutiny of options to revitalize the European defense industrial base. Citing examples across the six Letter of Intent (LoI) countries that house Europe’s defense industrial capacity—including France, Germany, Italy, Spain, Sweden, and the UK, as well as smaller arms-producing countries Norway, Finland, Switzerland and Poland—the authors sound the alarm on decreasing capabilities.
Protectionist measures have no place if there is to be a meaningful transition from a purely national to a European conceptualisation of autonomy that prioritieses capability over assets.”Balis and Heidenkamp call for cross-border consolidation and specialization in specific technologies, to combat the unfortunate trend of nationalization, which has led to redundant programs, decreasing economies of scale, subsequently increased competition in global markets, and therefore will result in a loss of revenues and skilled workers. In addition, much like the US defense industry, European industry is burdened by Ministries of Defense who have increasingly shifted the burden of Research & Development (R&D) and Research & Technology (R&T) onto defense corporations, be they state or privately controlled. Some of these firms have the capabilities and capacity to exit the defense market in favor of commercial activities, which could lead to a further deterioration in defense innovation and talent, and less competition for less qualified competitors.
The authors cite sovereignty, economic protectionism, negative past experiences in cross-border programs, and the political sensitivities of defense industrial policies, as reasons for the trends that stymy regional consolidation and subsequent growth. To reverse the damaging effects of nationalism, European countries could start by finding ways to prove that they will effectively provide each other with agile support and security of supply during a security crisis. This is doubly important because currently, no one European country is truly capable of mounting major military operations without “substantial support from allies.” In addition, they emphasize that to further cross-border consolidation, nations must define a coherent European Defence Technological and Industrial Base (EDTIB) strategy, then harmonize demand and procurement schedules, as well as consolidate supply to meet more clearly stated regional defense needs.
To read the full paper, click here.