What budget for which risks?

The question: “Defence industries, an asset for the economy?” posed by Le Cercle des économistes (The Economists’ Round-table) at a symposium held on 22 March in Paris, was not answered, but the 10-minute speeches made by General Pierre de Villiers, Chief of Staff of the French Armed Forces, and Laurent Collet-Billon, director of the DGA French procurement agency, nevertheless contained some interesting nuggets of information.

General Pierre de Villiers, Chief of Staff of the Armed Forces (photo credit: Ministry of Defence)

First, de Villiers revealed that “work to identify requirements and quantities is being finalised within the Ministry of defence between the armies, the DGA and the departments and services of the ministry,” concerning “a concise, operational reference document that lays out the political path to achieve the objective of [the defence budget reaching] 2% of GDP in 2022 and not in 2025.

This effort must meet three imperatives, said the general: “To recover the capacities to which we had temporarily renounced in a period when the situation was different; relaunching contracts to reflect what we actually do; and preserving our deterrence capability.

On balance, the necessary financial effort amounts to approximately €2bn per year, .i.e. €35.5bn in 2018 (in constant 2017 euros), €37.5bn in 2019, €39.5bn in 2020 and €42.5bn in 2022.

Laurent Collet-Billon, director of France’s DGA procurement agency.

And the nugget dropped by Collet-Billon is that “what is not smart today are the contracting and subsidies terms” offered by the Ministry of Defence notably to SMEs. He explained to the audience that “we have a device at the DGA called RAPID which allows those in luck to get their subsidies in roughly six months. There is a time lapse which is absolutely phenomenal and the administration, the prescriber, has to adapt. We must find a way of functioning that is radically different from today‘s, hence the idea of ​​a defence fund.” He was referring to the idea launched last summer by Thierry Breton, the CEO of Atos and former minister of the economy, of a fund which would buy the debt of the eurozone states arising from their former defence spending and which would serve to finance some of their future expenditure in this area.

At the first round table of the symposium which posed the question: “Is the world more risky?”, de Villiers said he thought that “what marks our epoch above all is its growing complexity, due mainly to the phenomenon of globalisation which creates interactions and interdependencies amongst all the actors.

For him the new face of war has four dominant traits: “Hardening (ultra-violent terrorist attacks, but also the actions of some powerful states which no longer hesitate to cross the red line); Dispersion (conflicts in ever more remote, extensive, distant areas, for e.g. Operation Barkhane in the Sahelo-Saharan strip with a 400km front and 1,000km depth); Digitization (which allows the implementation of an integral strategy through the use of cyber and influence) and finally the Duration of the conflicts, which ends up wearing out those who try to oppose force to violence.” And he added: “I could have added ‘time-span’ because of the acceleration of time which leads to almost immediate reactions.

The solution, for the general, “obviously also involves co-operation at a European level.” He explained his “conviction that the EU has a decisive role to play in the defence of Europe through the support it can give to the most committed nations, through development aid or through Europe‘s defence industry. I also believe that inter-state cooperation based on trust makes a complementary and essential contribution to the defence of Europe.