The Weekly Wire: For Your Situational Awareness 11.1.18

 In Weekly Wire
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NATO Allies Flex Their Strength During Trident Juncture 18

Jessica Di Paolo, Senior Market Analyst

On October 25, NATO kicked off one of its largest military exercises in the Nordic region, dubbed Trident Juncture 18, which will last until November 7. NATO allies and partner countries are participating in what news sources are calling the largest NATO military exercise since the Cold War, no doubt irking Russian officials who are watching the training take place next door. The military exercise includes the participation of 31 countries, over 50,000 participants, 250 aircraft, 65 vessels, and 10,000 vehicles taking place across Norway, Finnish-Swedish airspace, and the Baltic Sea. The scenario being played out by the Alliance is restoring a Scandinavian country’s sovereignty following an attack by an aggressive country. While Russia was invited by NATO to monitor the training, it’s no surprise why Russian officials would express anger over the scenario being played out since it largely echoes Western perceived Russian action in Ukraine in 2014.

Nordic countries have become increasingly concerned over Russia’s activity in the region, notably Finland and Sweden which have historically maintained their neutrality during regional spats but can no longer deny Russia’s aggressive foreign policy. While talk of joining NATO has become a trending topic in both countries, which are participating in the Trident Juncture exercise as partner nations, NATO membership is still far off. In late 2017, Avascent Analytics took a closer look on how Nordic defense spending compared to the rest of Europe and provided insight on where defense spending was heading for Denmark, Finland, Norway, and Sweden. Sweden has stepped up measures to counter perceived Russian aggression, with relations between both countries at an all-time low. Since Crimea’s annexation in 2014, Sweden has reintroduced conscription, bulked up its military presence on the strategic Gotland Island, and is increasingly modernizing its defense equipment, such as the recent purchase of Patriot air-and-missile defense systems. Sweden has gone as far as sending pamphlets to homes on how to prepare for a potential war.

Finland on the other hand must tread a bit more carefully, given the roughly 800-mile border shared with Russia. Finland has reiterated that Russia does not pose an immediate threat to the country and restates its commitment to neutrality, but has been taking subtle measures to secure cooperation with several NATO aligned countries. During 2018, Finland increased its number of defense cooperation agreements by signing pacts with Sweden, the US, and France. The current prime minister of Finland even hinted that the country might seek NATO membership in the future, though the Finnish population is largely against joining the alliance.

Norway has been increasing security measures along the northern-most part of the country where it shares a border with Russia. Norwegian officials claim that the Arctic threat remains low and does not view Russia as a threat as well, but the recent invitation to double the number of US Marines stationed in the country contradicts official statements. Furthermore, Norway’s decision to host the Trident Juncture exercise alongside the growing presence of foreign troops on Norwegian territory is meant to display to Russia that Norway can rely on its allies to come to its defense should Article 5 of the NATO treaty be invoked.

Airbus

A400M contract renegotiations between Airbus and partner nations are unlikely to meet their November 30 deadline. Since January, Airbus, the European procurement agency OCCAR, and the six A400M partner nations have been reviewing the existing contract with the intent of resetting the delivery and payment schedules. The contracting arrangement has come under significant pressure over the last few years as production problems have plagued the A400M program, leading to the announcement earlier this year that the program would be restructured to deliver eleven aircraft per year over a longer delivery period. However, that restructuring plan has grounded to a halt as both sides maneuver over the payment structure. The issue has become contentious as nations have withheld payment due to late deliveries and inoperable aircraft, leading Airbus to threaten to stop the program as it suffers from continued revenue shortfalls.

India flag

India

On October 29, India and Russia signed a $950 million contract for two Project 11356 Talwar-class frigates. An Indian Ministry of Defense official stated that the purchase would be through a rupee-ruble transaction instead of a US dollar transaction to avoid sanctions from the US. This contract is the product of an October 2016 agreement for four Talwar-class frigates, two to be built in Russia and two to be built in India with associated technology transfer. The two frigates signed for this week will be built in Russia, and a follow-on contract for the Indian built ships is expected later. The Russian built frigates are partially built Admiral Grigorovich-class frigates, a more advanced derivative of the Talwar-class for the Russian Navy. Due to the Crimean crisis, Ukraine refused to supply Russia with engines, forcing Russia to instead finish these hulls as Talwar-class frigates for India, for which Ukraine will supply engines. Deliveries are expected by the end of 2022. India already operates six Talwar-class frigates, which were built in Russia between 1999 and 2011.
The Indian Navy also awarded a contract worth $348 million for the design, construction, and supply of four survey vessels to Garden Reach Shipbuilders & Engineers (GRSE). GRSE beat out Indian firms Goa Shipyard Limited, Hindustan Shipyard Limited, Cochin Shipyard Limited, and two private shipyards. The first ship is scheduled to be delivered by 2022, and the final delivery is planned to take place no later than 2024. GRSE has emerged as one of the most important Indian shipyards, with an order book valued at more than $3.2 billion. In addition to the new survey vessel contract, the Calcutta-based firm is the OEM for four ASW Kamorta-class corvettes and three Project 17A stealth frigates.

Belgium flag

Belgium

On October 26, Belgium started negotiations to purchase two medium-altitude, long-endurance (MALE) unmanned aerial vehicles (UAVs). Official details on the purchase are minimal, but Belgium is most likely trying to purchase unarmed, NATO-variant Predator systems that will function in a reconnaissance role. Additionally, the language around the announcement of the negotiations implies that Belgium views this as a step towards greater integration with other European militaries. The Belgian Defense Minister pointed out that European defense forces have relatively few MALE UAVs overall and positioned the purchase as an attempt to close a capability gap for Europe, rather than just for Belgium.

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