From FCAS Fighters To MGCS Tanks – How US Is Elbowing Out France To Gobble Lucrative Defense Deals

France’s new Parliament, where President Emmanuel Macron does not have a majority, is about to take an important decision that could affect the country’s image as the world’s third-largest manufacturer of arms.

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Will it agree to Macron’s plea for sanctioning more funds for the French military industry to preserve France’s “strategic autonomy” and Europe’s “sovereignty” in the face of the US emergence? And it is ironic, as the US is its most prominent commercial rival following the Russian invasion of Ukraine.

Currently, the French Parliament is considering Macron’s €44 billion ($44 billion) budget for the country’s military in 2023, including a €3 billion ($3 billion) increase over last year’s budget. If enacted, the increase would be near twice as much as France had previously committed to boosting its budget during the previous two years.

On July 7, the Defense Committee of France’s National Assembly listened to the newly appointed Minister of Defense Sébastien Lecornu elaborating on the details of this proposal.

And tomorrow (July 13), it will hear from the chief of the military procurement office, Direction Générale de L’Armement (DGA), in a closed session. According to Committee President Thomas Gassilloud. Joël Barre, the Committee will interview additional government leaders and industry chiefs before recommending the final budget to the Parliament.

For Lecornu, France is in “a delicate situation” regarding the ongoing war in Ukraine. The support Paris is providing to Kyiv in its self-defense has prompted several updates to the budget.

Because, so runs his argument, the military would need to replenish munitions and equipment that have been sent to Ukraine, along with advanced Rafale fighter jets that have been exported in recent times. His main point before the Committee was that France needed to maintain its strategic autonomy and ensure its place as a key actor within NATO and in Europe.

It may be noted that, unlike other NATO members, France has always maintained its strategic autonomy while being an active partner of the Alliance.

File Image: Macron and Putin

France, the second European power after the UK  to be a permanent member of the United Nations Security Council,  maintains its nuclear deterrent and capability to project its forces around the globe to defend its overseas territories or support partner countries.

France develops and maintains costly weapon systems such as an aircraft carrier and nuclear-powered ballistic missile submarines.

While asserting its strategic autonomy, France is also an ardent advocate of what it says is “European sovereignty.” As Macron said last month at Eurosatory, a weapons industry fair that France organizes yearly, Europe needs “a much larger defense industry” to avoid relying on suppliers elsewhere for its equipment needs.

Macron urged his European compatriots not to repeat previous mistakes. “Spending a lot buying abroad is not a good idea. We should spend a lot, but we should think in the veins of European strategic autonomy,” he said. “We need to reinforce a European technology and defense-industrial base.”

It is a fact that since he assumed office in 2017, Macron has been strongly pro-European. He has supported the launch of the European Defence Fund and contributed to the European Union’s nascent “Strategic Compass” document.

At Eurosatory, Macron assured the domestic military industry that “the nation will need to invest further in its defense-industrial base as well as become more agile and innovative to respond to its troops’ needs while supporting the equipment requests of certain partners.”

At the same time, he also acknowledged the importance of many ongoing collaborations between France and its European neighbors “to develop joint programs, improve partnerships and encourage European sovereignty.”

And when one talks of collaborations with neighbors, Germany has always been one of France’s important partners.

In fact, due to the size of their armed forces, the French-German tandem played a key role in developing European defense policies. The two represent the main contingent of European Defense.

Two Franco-German joint projects at the moment are particularly noteworthy: the Future Combat Air System (FCAS) and Main Ground Combat System (MGCS), which will produce critical technologies to improve European resilience against Russian threats.


Major Challenges

However, at the moment, the French military industry is confronted with three major challenges.

First, there are not only supply chain shortages but also rising inflation. These adversely affect the long-term plan and commitments. The Covid-19 pandemic has made the matter worse.

France has experienced 4.8 percent inflation over the past year through April. The defense budget has been affected due to a large public deficit and rising inflation. The government has to take care of the shifting priorities in this situation, resulting in the usual guns vs. butter curve.

In other words, despite the increasing responsibilities of the French armed forces, their capabilities are not expanding at the expected level.

As experts point out, several pieces of military equipment intended for the French armed forces were reallocated to other recipient countries. For example, Rafale aircraft initially earmarked for the French air force were sold to Croatia in 2021 (Six more were to be given to Greece in 2024).

Similarly, the donation of weapons such as the artillery gun César and the financial support to Ukraine have diminished the French arsenal and impacted the defense budget. New ones must replace these weapon systems.

France-UAE Rafale Deal – File Image

Secondly, Covid-19 has partly affected France’s defense exports. France, it may be noted, is the third biggest exporter of weaponry in the world, after the US and Russia. Between 2017- 21,  arms exports by France made up 11% of total global exports, up from 6% in the previous four-year period (2012-2016), meaning it overtook China as the third biggest exporter.

But the real challenge to these exports has now come from the US arms industry, the biggest in the world. In the past two years, multiple major contracts with French arms exporters have been abandoned in favor of US suppliers.

In late 2021, an American counter-offer threatened the sale of several frigates to Greece, and Australia suddenly canceled a submarine contract in favor of US goods. Similarly, most European countries have decided to purchase Lockheed Martin’s F-35 aircraft, while the French-made Rafale manufactured by Dassault found few customers in Europe.

The point is that while France and the US remain allies, they are increasingly becoming competitors in the field of arms exports. And in this competition, France is proving to be a loser.

Thirdly, this Franco-US competition affects Paris’ collaborations with European neighbors in arms production. The neighbors even think purchasing arms directly from the US is better than manufacturing at home.

As has been pointed out, the two most relevant projects that France and Germany collaborate on are the FCAS and the MGCS.

Both projects are critical to France, as these new systems are supposed to replace its Rafale aircraft and its main battle tank Leclerc. But both the projects are now lagging because Germany, of late, has been perceived to be revaluating France as its main partner.

For instance, Berlin abandoned a joint project to modernize the Tiger helicopter and pushed for the addition of Spain to the FCAS project, reducing the role of French enterprises.

A fixed-wing aircraft mechanic with Marine Fighter Attack Squadron (VMFA) 121, conducts preflight checks on a #F35B Lightning II aircraft at Marine Corps Air Station Iwakuni, Japan – Twitter

And there has been no reciprocity either. While France chose the German HK 416 F as its new combat rifle, Germany chose the F-35 instead of the Rafale and the US Poseidon sea-patroller aircraft instead of the Maritime Airborne Warfare System developed with France.

As if this has not been bad enough, the Russian invasion of Ukraine has worsened the matter. Germany has indeed agreed to increase its defense budget to 2% of its GDP.

But it is doubtful whether the added money to Germany’s defense budget will go to the existing and planned collaborative defense projects among the European partners. It is speculated that Germany will prioritize buying off-the-shelf US military systems rather than developing new military assets with France and other European partners.

In other words, it is feared that the increase in the German defense budget would more likely benefit US companies rather than European or French ones.

Viewed thus, Macron’s emphasis on an increased defense budget to maintain the edge of the French military is understandable. But it remains to be seen whether or not the loss of his absolute majority in Parliament in the elections held last month, which, in turn, will compel him to make compromises in a coalition government, shall dent his ability to keep the French forces and military industry agile enough.

  • Author and veteran journalist Prakash Nanda is Chairman of Editorial Board – EurAsian Times and has been commenting on politics, foreign policy on strategic affairs for nearly three decades. A former National Fellow of the Indian Council for Historical Research and recipient of the Seoul Peace Prize Scholarship, he is also a Distinguished Fellow at the Institute of Peace and Conflict Studies. CONTACT:
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Prakash Nanda
Author and veteran journalist Prakash Nanda has been commenting on Indian politics, foreign policy on strategic affairs for nearly three decades. A former National Fellow of the Indian Council for Historical Research and recipient of the Seoul Peace Prize Scholarship, he is also a Distinguished Fellow at the Institute of Peace and Conflict Studies. He has been a Visiting Professor at Yonsei University (Seoul) and FMSH (Paris). He has also been the Chairman of the Governing Body of leading colleges of the Delhi University. Educated at the Jawaharlal Nehru University, New Delhi, he has undergone professional courses at Fletcher School of Law and Diplomacy (Boston) and Seoul National University (Seoul). Apart from writing many monographs and chapters for various books, he has authored books: Prime Minister Modi: Challenges Ahead; Rediscovering Asia: Evolution of India’s Look-East Policy; Rising India: Friends and Foes; Nuclearization of Divided Nations: Pakistan, Koreas and India; Vajpayee’s Foreign Policy: Daring the Irreversible. He has written over 3000 articles and columns in India’s national media and several international dailies and magazines. CONTACT: