European Mandate: Cut Spending, But Carefully
Defense budgets will decrease in 2011 in many European countries with few exceptions: Poland is increasing its budget, while Italy, France and Turkey are keeping spending essentially stable. Countries facing the most pressure to reduce national deficits—the U.K., Spain, Greece and Portugal—are being forced to take exceptional measures, but this is not going to have a great effect on capital investments such as the force modernization or RD. Where cuts are necessary they are being applied gradually and are often not as dramatic as feared. For example, in the U.K. last summer, a 20% budget cut was envisioned, but the actual figure is 8%.
Almost everywhere attempts will be made to spend efficiently and reduce overhead and support costs. For many nations this means reducing the size and personnel of the armed forces. Most have moved away from “mixed” militaries made up of professionals and conscripts. Abolishing conscription has reduced overall numbers and led to leaner, better qualified and more motivated forces. Even Germany, which among the major players is the only one still using a mixed force, has decided to eliminate conscripts. Turkey, reluctant to shift toward an all-volunteer force, is creating more professional units that are performing better against PKK (Kurdistan Workers’ Party) guerrillas and suffering fewer casualties.
Overall, end strength will continue to decline: European militaries had 3.5 million personnel in 2001 and 2.3 million in 2009, with further cuts looming.
The reduction in numbers does not diminish combat capabilities. On the contrary, it generally leads to an increased “capitalization ratio,” i.e., more money spent per soldier. This trend is not new but is accelerated by operational requirements—money to improve protection of soldiers in Afghanistan or those deployed in other operations is set to increase.
There is also a qualitative change on how money is going to be spent, with a shift toward land warfare and areas such as intelligence and counter-IED (improvised explosive device) systems. The Brussels-based Aerospace and Defense Industries Association of Europe reported recently that revenues derived from sales of land and naval defense systems in 2009 were, at €45.5 billion ($60.5 billion), higher than those from military aeronautics, at €41 billion. It adds that “the emergence of new priorities—such as maritime surveillance, border-control missions, situational awareness, as well as [urgent operational requirements], through-life operational support, and integrated logistics and training—have led companies to adapt and transform their traditional structure.”
To compensate for budget cuts, some defense ministries, notably in France and Italy, are counting on selling redundant real estate and other military assets such as radio frequencies, or the lease and sale of satellite services to raise revenue. However, in France, where expected income from these sales has been included in the budget for the past two years, sales have either not materialized (radio frequencies and satellites) or failed to bring in as much as hoped. Complicated accounting mechanisms have to be brought into play to ensure this does not weigh too heavily on the 2011 budget.
Those countries with big defense industries—U.K., France, Spain, Italy, Germany and Sweden—have resisted pressure from NATO and the European Union, and sometimes their own governments, to rationalize and specialize to avoid technology duplication. NATO, in particular, while insisting that defense budgets need to be spared deep cuts, points out that only four countries meet the alliance minimum for defense spending of 2% of GDP. NATO proposes that each country provide one or more key capabilities in the name of efficiency, but nations have rejected this for years, trying instead to build a little of everything in order to be able to mount independent military operations.
Nevertheless, the economic crunch has accelerated a rapprochement between two nations, the U.K. and France, which together account for 50% of Europe’s defense budget. In November they signed two wide-ranging defense and security treaties to maintain critical capabilities in an era of budget shortfalls, says Etienne de Durand, of France’s Institute of International Relations. The U.K. made the overture, but for both countries the choice was “entente or oblivion,” he adds.
“The U.K. wants to be global, and cannot afford to be. Perhaps Britain and France can back each other up a bit as the two principal countries that can be taken seriously [in Europe],” notes Robin Niblett, director of the London-based think tank Chatham House.
Robert Walter, president of the European Security and Defense Assembly, welcomes the agreement as “a major bilateral contribution to European security, covering the whole range of security and defense aspects including deterrence.” But he warns that even if the accord provides further impetus to European cooperation, it would first have to prove its relevance through results.
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