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UK/France Defence Spending Contrasts By Howard Wheeldon, FRAeS, Wheeldon Strategic Advisory Ltd.

Recent confirmation that the plan to increase the defence budget by EUR 600 million next year had been approved by the French Parliament is welcome. Even so, it is worth reminding that what the French Government proposes to spend on defence next year will continue to be well below the ‘agreed’ 2% of GDP that all NATO members signed up to at the NATO Conference in Wales in 2014.

The approved French defence budget which has now been set at EUR32.44 billion for 2017 represents a EUR 1.1 billion or, if you prefer, a 1.8% increase over that of 2016 spending plans. This is substantially higher than had been envisaged back in July within the official 2014-2019 Military Programming Law (LPM).

Just as the UK defence budget also includes, the French budget figure includes exceptional income benefit of around EUR250 million from anticipated funding made available from land and property sales. If, as the UK has seemingly done and in one of several moves that has allowed the UK Government to claim that it is spending 2% of GDP on defence, the additional EUR8.15 billion of spending on military pensions in France is incorporated, it could be argued that overall French defence spending planned for 2017 would total EUR40.84 billion, a figure that would, on a like for like basis, push the equivalent GDP percentage figure for French defence spending up to 1.77%.

Former French defence minister Alain Juppe, a centre right candidate in the recent presidential primaries before losing out to Francois Fillon, is on record as having said earlier this year that French defence spending would need to rise by at least EUR 7 billion in 2022 if France was to be able to hit the NATO target of 2% GDP spending on defence by 2025. Realistically, given the weakness of the French economy, achieving this whilst remaining in the EU would be a tough call.

Having witnessed several shocks already within the French primaries, it is extremely difficult for any of us over here to predict who might be the eventual winner of the Presidential Election next May but the hope is that, whoever it is, will remain committed to increasing defence expenditure.

As France and Britain are the only two countries in Europe that have a nuclear deterrent and that are regarded as the two most important European NATO members in respect of their ability and willingness to deploy military capability when required, it is not uncommon that their respective defence budgets are frequently compared. And that is where it gets very interesting as in France spending on defence represents the third largest element of government departmental spend behind that of education and debt interest payments on the nations huge level of borrowings.

However, whereas in Britain defence spending is ahead of that in France, defence spending comes well down the list of priorities over here. Defence spending in the UK today rates substantially below that of spending on health, welfare, education and of course, the cost of our paying back the ever rising level of national debt.

It is worth noting that UK defence spend as a proportion of GDP had halved between the years 1988 and 2013 whereas spending on health during the same period rose from under 3% of GDP to well over 7% today. Spending on Welfare in the UK rose from just under 5% of GDP to just under 12% and that of education from 2.9% of GDP to 5.1%. Interest payments on UK national debt currently represent a figure of around 4.2% of GDP, a figure that is interestingly, not that dissimilar from where it was in 1985 following the Thatcher fight against inflation.

So what next? Despite what I have suggested in previous commentary pieces on the issue of European defence, I do now both believe and fear that, excluding Britain, other EU member states will over the next two years reconsider their attitudes toward NATO being the all-embracing defence alliance for Europe and that they will attempt to create a new pure EU defence body. Whilst I doubt that they will not walk away from NATO, given that the EU budget is already stretched and that without Britain as an EU member state overall Brussels funding will suffer would mean that any new money’s would I assume need to be taken out of NATO budgets. I fear trouble ahead!

Whatever the future outlook is, the one thing that has been learned from the present impasse caused by Trumps statements in respect of NATO and Europe is that all countries in Europe will need to increase spending on defence in the years to come. France and Germany will be in the centre of the EU based requirements and that will, just as it should, place a greater level of responsibility on the United Kingdom to increase spending on defence. Today, in my humble view, as we face up to an ever increasing level of threats to our security, we need to be talking of a real 3% of GDP level of spending in respect of defence. France and Germany may need to think along similar lines.

(Note that UK Defence -263 has been reserved for a wider piece on RAF Marham F-35 infrastructure development together with F-35 Force structure. This will follow at a later more appropriate date after the holidays).

CHW (14th December 2016)

Howard Wheeldon FRAeS

Wheeldon Strategic Advisory Ltd,

M: +44 7710 779785

Skype: chwheeldon

hwheeldon@wheeldonstrategic.com

@AirSeaRescue

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