France Willing to Put Assets on Fire Sale to Keep Defense Budget Nominally Flat
- France’s Ministry of Defense released its 2015 budget plans [in French]. They’re looking at a nominally flat (i.e. excluding inflation) 31.4 billion euros ($39.7B) budget, within which €5.7B go to major programs and €2.8B are assigned to the nuclear deterrent. 1 FREMM frigate, 11 Rafale jets, 4 A400M transport aircraft, and 25 VBCI infantry vehicles are among the planned deliveries next year.
- To get there the French government will need to successfully auction the 700 Mhz frequency range, with €2.3B in one-off asset sales necessary to meet the €31.4B topline number. Canada got almost CAD5.3B from its own auction in that range earlier this year. However the Coe-Rexecode research firm thinks [in French] that market participants are not ready to use these frequencies, and the government would leave a lot of money on the table by rushing their auction. There are also technical reasons why this frequency auction is unlikely to happen before the end of 2015 at the earliest.
- On the other hand that the French ministry of defense will fire 7,500 people next year can be taken for granted. The French military, known as the “Great Mute” has been growling about accounting tricks and job cuts mostly though spouse and retiree associations. This may change as the European Court of Human Rights just ruled [PDF] that “the blanket ban on trade unions within the French armed forces is contrary to the [European Convention on Human Rights].”
- But pressure on fiscal issues is mounting on the Hollande/Valls administration within their own party (Hire more teachers! Spend more!) as well as from their German neighbors (Get your act together, schnell!). They have their work cut out for them. Defense Minister Le Drian brought up the idea [AFP, in French] of “project companies” set up to acquire and lease equipment back to the government, with partial state backing. Sounds woolly. Instead, expect some planned equipment deliveries to slip.
US FY14 Spending
- The Pentagon has predictably been through a splurge in September to consume the tail of its annual budget: Seapower | Intercepts.
- The prolific Anthony Cordesman from the CSIS think tank is urging the US [PDF] to get real in Afghanistan:
“Yes, it would be nice to see Afghanistan emerge suddenly in 2015 or 2016 as a unified, peaceful, developing democracy. It would be nice to seek Pakistan on the same path. It would be nice to resolve the tensions and risk of conflict between India and Pakistan. It would be nice to see Central Asia develop as a region, and do so in ways that are peaceful, and involve the same progress towards democracy.
But, these are not meaningful and practical strategic objectives for the US, its European allies, or NATO. The current realities on the ground strongly indicate that the present US approach to Transition in Afghanistan will fail at the military, political, economic, and governance levels.”
- That’s not a good place to be in with ISIS making inroads in AfPak [Foreign Policy].
- Not a week goes by without some grand pronouncement by the Russian authorities and its subservient media of sweeping defense modernization. The Russian Defense Policy blog notes that the reality is underwhelming, with construction work in military bases consistently late and of poor quality.
- Resources used by France in its “Operation Chammal” against ISIS have been increased, with the deployment of 3 additional Rafales (to a total of 9) and other assets. MINDEF [in French]. In 2014 France has been spending [Le Figaro, in French] hundreds of euros more in external operations (OPEX) than budgeted. Something will have to give.
- Michael Fallon, the UK’s recently appointed Defence Secretary, talks about the UK’s strikes in Iraq in the video below. Their extension into Syria sounds likely, pending a separate authorization from Parliament. He’s then using the word “more” a lot, relative to the state of his country’s defense budget: