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08 Nov 24. GCAP Green Light. The UK has given the green light to building a new multibillion-pound fighter jet with Italy and Japan, ending fears that the flagship project could fall victim to the new Labour government’s strategic defence review. Ministers gave the go-ahead for the Global Combat Air Programme (GCAP) at a meeting on Tuesday, according to several people familiar with the decision. A formal announcement is expected in the coming weeks. UK Prime Minister Sir Keir Starmer “chaired a meeting of some ministers . . . at which they made a firm commitment to GCAP”, said one British government official. The news will come as a relief to Italy and Japan, Britain’s partners on GCAP, after Labour sparked fears in the summer shortly after taking power that it could axe the jet project on cost grounds. Armed forces minister Luke Pollard in July described the programme as “really important” but had said it would not be right for him to prejudge Labour’s strategic defence review (SDR). Starmer similarly stopped short of confirming Britain’s participation would continue during a visit to the Farnborough Air Show in late July. GCAP is intended to expand each nation’s defence capabilities to address rising threats from Russia and China. It merges Japan’s F-X programme with the UK and Italy’s Tempest project, with the aim of delivering a supersonic jet by 2035. The UK has committed just over £2bn to the original Tempest programme alone but the eventual cost of GCAP is not yet fully known. The project is underpinned by a trilateral treaty between the partner nations signed in December last year. Britain’s biggest defence companies, BAE Systems and Rolls-Royce, are working together alongside industrial partners Leonardo of Italy and Mitsubishi Heavy Industries of Japan on the programme. “Starmer was aware of the discomfort from Japan and Italy at the uncertainty the SDR was creating and wanted to make a firm decision one way or the other sooner rather than later,” said a person familiar with the meeting. UK defence secretary John Healey has stressed the importance of GCAP in recent weeks, including at the G7 Defence Ministers Summit in Naples. The Ministry of Defence said the UK was a “proud member of the Global Combat Air Programme, working together with our partners Japan and Italy we are fully focused on delivering a next-generation combat aircraft for 2035”. “We are making rapid progress across the programme, driving innovation, creating jobs and boosting the industrial base of each country.” British chancellor Rachel Reeves announced an additional £2.9bn for the MoD for next year in her recent Budget, intended to ensure the UK continues to meet and exceed its Nato commitments. Labour’s defence spending review comes after the UK’s National Audit Office last year branded the MoD’s equipment plan for Britain’s armed forces “unaffordable”. (Source: ft.com)
BATTLESPACE Comment: This is a brave move given the limited number of airframes under the exiting agreement, 600, which puts a huge cost per airframe. Starmer would have been better off increasing the land budget and increasing ammunition production capability with war in Europe looming and go for the upgraded F-35 with Lockheed Martin. In addition, the F-35 fleet as briefed by Lockheed Martin last month is now the fighter of choice across Europe with a logistics system to back it up. The F-35 is available now and delivers £45.2bn GVA and 20,000 jobs to the U.K. alone plus interoperability with 19 other nations (so far) – as well as actual aircraft needed in a challenging geopolitical scenario. Team Tempest says benefit to the U.K. is £37bn and 16,000 jobs, interoperability with two other nations and is at the very minimum 12 years away? In addition there no GCAP timeframe has been confirmed so the programme could conceivably be pushed to the right to allow evaluation of lessons learned from recent and ongoing conflicts, which is what the U.S. is doing with its own NGAD programme. This might be a sensible thing to do but not if it means lots of additional funds are directed towards buying more Eurofighter Typhoon fighters over upping the size of the F-35 fleet. For Typhoon to remain relevant for the next 20+ years will require a significant investment for this 4th generation fighter that has not been the export success that was expected, with most potential Typhoon export customers opting to buy the F-35. This being the case surely the sensible choice would be to buy more F-35s, a programme that sustains 20,000 British jobs and which would maximise interoperability and interchangeability with European and NATO allies who will soon operate around 750 F-35s in Europe. Any new F-35s purchased by the UK would remain relevant to defeating the increasingly complex threats of the future for 30+yrs and already have a clear technology insertion programme ahead of them.
08 Nov 24. A new IISS report highlights gaps in Europe’s defence capability and the progress the region has made in increasing defence spending and industrial investment after a decade of stagnation. The IISS Strategic Dossier, ‘Building Defence Capacity in Europe: An Assessment’ looks at issues related to the readiness of European armed forces and the ability to supply them in the wake of Russia’s full-scale invasion of Ukraine in 2022. Given NATO’s objectives under the New Force Model, the demands on member countries to supply troops and equipment raise often uncomfortable challenges.
The findings are being published at the launch of the IISS Prague Defence Summit which takes place in the Czech capital this weekend. Ministers, military officials and other interested groups will meet to discuss how Euro-Atlantic capability can be improved and how quickly that can be achieved.
Europe’s ability to defend itself is explored in five key areas: defence relations between Europe and the United States and where Europe can, and will, do more to help itself; defence spending in Europe; the state of European defence-industrial capability; personnel challenges within Europe’s armed forces and the security of supply of materials important in Europe’s defence production.
TRANSATLANTIC DEFENCE TIES
The United States remains a source of key equipment, especially in advanced combat aircraft. Europe’s continued acquisition of US material is also seen as an end in itself as it appears to lock the US into European security, but it also reflects years of European underinvestment in the continent’s defence sector.
Capacity issues remain a hindrance for European firms to be able to respond as swiftly as their US counterparts. This also explains partly why other nations have increased their market share, for example, South Korea.
Nonetheless, as referred to in the recent IISS Military Balance blog, as Europe spends more on defence, European purchases are mostly being sourced from European manufacturers. After February 2022, 52% of spending by European NATO states was on European systems, compared to 34% on systems from the US.
US primes in the sector have long had a presence in Europe and vice versa, but the same is beginning to happen for medium-sized European companies. Some important US capabilities are now derived from European designs: one will be the new Constellation-class frigate.
DEFENCE SPENDING IN EUROPE
There are few more obvious signs of the change in Europe’s strategic environment than to see how European countries have increased defence budgets in recent years.
Overall defence spending by European NATO member states has increased by nearly 50% over the decade with momentum gathering after Russia annexed Crimea in 2014 and accelerating following the full invasion of Ukraine in 2022.
Several NATO members have more than doubled defence spending over the past decade, while non-NATO countries such as Austria, Serbia and Switzerland have also raised their budgets in recent years.
But uplifts in key countries are increasingly sourced from non-core budgetary funds, creating transparency challenges and undermining the security of longer-term funding; this ultimately limits industry’s ability to invest with confidence.
As a result, attention is shifting to the role that alternative methods of financing can play. Finance from the private sector may appear to be a ready-made solution but is not without its issues.
EUROPEAN DEFENCE-INDUSTRIAL CAPABILITY
European states and companies have re-invested in their production capacity since 2022, following post-Cold War reductions, and especially so in ammunition and missiles where the drive has been to supply Ukraine’s war effort. Quality did not diminish in the intervening period, but short production runs increased unit costs and contracted the supply chain and resulted in ’skill-fade’ after the conclusion of contracts.
This has highlighted two issues within the European defence industry: systems by European companies are produced in low numbers and with long lead times, while some sectors have little capability at all which leads to imports from countries such as the US, Israel and South Korea.
Most European defence industrial capability within NATO exists within France, Germany, Italy, Spain, Sweden and the UK. Turkiye has developed a range of domestically produced systems which it is now exporting, while Poland and Romania also have ambitions to enhance their defence industries.
SIZE OF EUROPEAN ARMED FORCES AND THEIR IMPACT ON READINESS
Key European armed forces and their equipment holdings are much reduced compared to the Cold War period. Current personnel and equipment and munitions shortages risk creating difficulties with regard to NATO readiness and sustainment objectives.
Recruitment and retention remain an issue across Europe. Improved pay is one way of tackling this issue but so too are more flexible career structures and whether armed forces need to adapt better to the modern workplace. The urgency of the challenge depends on location: particularly in Eastern and Northern Europe, a number of governments are either reintroducing or amending conscription systems to rebuild mass.
SECURITY OF SUPPLY
Greater awareness of supply-chain risks following COVID-19 and the war in Ukraine, and broader geopolitical tensions including in the Asia-Pacific, are leading countries to scrutinise their defence supply chains. A number of Western governments are examining diversification strategies to reduce risk of overdependence on one supplier.
Competition with other sectors for vital components and materials as well as concerns over the source of specific items which are largely produced outside Europe, will need to be managed alongside modernising production processes and infrastructure investments.
Europe’s requirement for raw materials, many currently sourced from outside the continent, will most likely grow not just because of Europe’s increasing focus on rebuilding defence capability, but also due to European states’ ambitious climate and digital objectives.
05 Nov 24. Poland to spend $750m to boost ammunition production. Poland plans to invest 3bn zlotys ($750m) to boost ammunition production, according to a bill published late on Monday, aiming to ensure it has sufficient supplies in the event of an attack from Russia.
Since Moscow launched its full-scale invasion of Ukraine in 2022, Poland has become NATO’s biggest spender on defence in relation to the size of its economy, with the 2025 budget allocating 4.7% of gross domestic product for the purpose.
“The draft act aims to create opportunities to provide financing for activities aimed at increasing the capacity for ammunition production,” the bill says, with a particular need to expand large-caliber production to bolster the potential of the Polish Armed Forces.
The government aims to adopt the bill during the fourth quarter, according to its website.
Some NATO officials have said the Kremlin might be ready militarily to attack NATO countries in five to eight years’ time, once it has rebuilt its forces after the war in Ukraine. Moscow has regularly dismissed Western suggestions that it might consider an attack on NATO. (Source: Google/Reuters)
04 Nov 24. USAF to send bomber task force to Europe. The Air Force plans to soon send its latest task force of strategic bombers to Europe to train with NATO allies. U.S. Air Forces Europe-Air Forces Africa said on Friday that the bomber task force deployment will begin “in the coming days,” and would last several weeks. But details about the deployment are scant, and USAFE declined to say what type of and how many bombers would make up the task force, when they would arrive in Europe, and where they would be stationed, citing operational security concerns. The Air Force flies B-1 Lancer, B-2 Spirit and B-52 Stratofortress bombers.
The bombers will train and carry out missions with NATO allies and partners, USAFE said, and would “demonstrat[e] the U.S. commitment to global security and stability.” The deployment has been “long-planned,” USAFE said.
“Our commitment remains steadfast to ensuring the readiness and strategic flexibility of our forces as they support regional security and our allied partnerships in the region,” USAFE said in a follow-up email.
That bomber deployment was one of two announced Friday. The military also plans to send B-52s, alongside fighters and Navy ships, to the Middle East to deter Iran and its proxies. Tensions in the Middle East remain high as the war in Gaza rages on after more than a year, and following Israeli strikes on Lebanon and Iran. Iranian Supreme Leader Ayatollah Ali Khamenei this weekend threatened to soon conduct a “crushing response” to Israel’s strikes on the nation’s military.
The war in Ukraine, which is nearing its third year, also marks the heaviest fighting in Europe since World War II. The Air Force has sent multiple bomber task forces to Europe since then to signal support for NATO allies and deter Russia from further aggression.
Since 2018, the Air Force has regularly rotated bombers overseas as part of task forces instead of permanently stationing them abroad. That allows the bombers to train and operate overseas for several months – as well as deter potential adversaries – before returning to the U.S. for more in depth maintenance and stateside training. The military also was concerned that stationing bombers overseas for long periods could leave them vulnerable to attack. (Source: Defense News)
04 Nov 24. In a Trump win, ‘buy-the-dip’ opportunity seen in European defence. A Donald Trump victory in the race for the White House is widely seen as bullish for European defence stocks, given his warnings to scale back U.S. military support in the region and force NATO members to spend 2% or more of their GDP on defence.
However, should he win and follow through on pledges to bring about a rapid end of the war in Ukraine, there is the possibility that the sector goes through heightened volatility.
JPMorgan has advised clients to hedge against short-term declines going into the November 5 vote.
Analysts estimate a Ukraine ceasefire could trigger big declines in defence stocks, but stock pickers look ready to jump in to add exposure to this high-growth sector at a bargain.
Shares in Germany’s Rheinmetall (RHMG.DE), Sweden’s Saab (SAABb.ST), and Italy’s Leonardo (LDOF.MI), have risen 230-360% since Russia invaded its smaller neighbour in 2022. (Source: Google/Reuters)
01 Nov 24. Military corridor expedites transport of armoured vehicles to Poland. The Netherlands is the gateway to Europe – a crucial logistics platform from which Nato partners can coordinate supply lines towards the Eastern Flank. US armoured vehicles have just unloaded at the Dutch ports of Vlissingen and Eemshaven on 30 October 2024. More than 2,000 containers will be transported, with Dutch Defence assistance, via road and rail, and through Germany, mostly bound for Poland. Credit: Netherlands Ministry of Defence.
The US Army have unloaded hundreds of armoured vehicles at the Dutch ports of Vlissingen and Eemshaven on 30 October 2024.
Many of the platforms, sitting in more than 2,000 containers, are bound for Poland.
A grand logistical vision, this endeavour among Nato partner nations will make use of a military transport corridor – via road and rail – spanning across Western and Central Europe.
This infrastructure was first established in accordance with an agreement struck in February this year between countries through which the Corridor passes, namely Germany, the Netherlands and Poland.
Since Russia’s annexation of Crimea in 2014, and later in response to their full-scale invasion of Ukraine in 2022, Nato increased its troop presence in Eastern Europe as a deterrent. Reinforcements must reach the Eastern Flank at pace when exercises, operations and in the event of threats occur.
As the lead coordinator for the Corridor and the host nation, the Netherlands have committed to assisting US units in this military mobility mission. Notably, it is the first time that foreign material has arrived at the Eemshaven port.
Some of the wheeled vehicles will travel in convoy from Eemshaven to Germany. This is done under the escort of the Royal Marechaussee – a police force and branch of the Dutch Armed Forces.
The logistical task will take three weeks in all, from 30 October until the 20 November, according to a press release issued by the Dutch government.
Army Technology has contacted the Dutch Ministry of Defence and the Polish Ministry of National Defence regarding further details of the logistical plan and what Polish units will operate the vehicles but neither organisation responded at the time of publishing.
Kitting out the Eastern Flank
Poland has ascended as a strategic partner to the US and Nato since the onset of the Russian invasion of Ukraine nearly three years ago. The transfer of hundreds of armoured vehicles demonstrates the significance of the country’s presence on the Eastern Flank and the need to bolster its capabilities there.
While the transportation of hundreds of armoured vehicles to Poland is a demanding task, we need only look to the Russia-Ukraine war to see that this large number of platforms is a fleeting figure in a high intensity warfare environment.
On 1 November, the Ukrainian Ministry of Defence revealed that the losses of Russian armoured fighting vehicles reached 923 units in the whole of October 2024.
“It’s the highest monthly number since the beginning of the invasion,” according to an X post. “On average, Ukrainian warriors destroyed 30 [platforms] every day.”
Ukraine Ministry of Defence post on X.
US and Poland defence cooperation
The Central European republic’s relatively new posture hinges on its thriving military expansion. According to Chatham House, Poland is spending 4% of its GDP on defence while few others in the North Atlantic alliance are beyond straddling the 2% benchmark set in 2014.
On October 30, the UK government unveiled its autumn budget in which it has yet to reach its own aspirational target of 2.5%. Content to inch closer to an arbitrary target that, if ever reached, will actually have little impact on Britain’s military readiness. All the while some analysts anticipate the need to be ready to fight the Russians by 2028.
A newly appointed member of the UK Defence Select Committee, a Liberal Democrat MP, Mike Martin, recently expressed his view on the social media platform X that attention must be given to Russia as the primary strategic threat to Britian and Europe.
“You wouldn’t know this from the House of Commons where a lot of time is spent debating the Middle East,” he commented while still highlighting the relative importance of the conflict.
Nevertheless, Poland is preparing in the medium- to long-term for the prospect that the US will pull out of Europe and pivot towards the Indo-Pacific where they face growing aggression from China.
In the meantime, Poland is securing offset agreements and licences to build US equipment and platforms domestically, and to shore up its military infrastructure should Nato enter the conflict in Eastern Europe.
At present, the US has military units stationed in Poland which they rotate every few months. This time, the 3rd Armored Brigade Combat Team of the 1st Armored Division is rotating in. There is also an interwoven military structure when we consider the V Corps, or Fifth Corps, a Polish-led unit comprised of American soldiers based in Poznan.
(Source: army-technology.com)
01 Nov 24. The UK supports Bosnia and Herzegovina’s aspirations towards greater European integration: UK statement at the UN Security Council.
Statement by Ambassador Barbara Woodward, UK Permanent Representative to the UN, at the UN Security Council meeting on Bosnia and Herzegovina
The UK welcomes the renewal of the mandate of EUFOR Althea today, and I join others in thanking France for its efforts as penholder on the text. EUFOR’s presence continues to play a vital role in safeguarding peace and security in Bosnia and Herzegovina.
I also express my thanks to High Representative Christian Schmidt for his latest report and I welcome his excellency Mr Denis Bećirović in our meeting today.
I would like to use my remarks today to make three points:
First, the UK fully supports Bosnia and Herzegovina’s aspirations to make progress towards greater European integration.
Pursuing a reform path will help to achieve this goal and will boost stability and prosperity. We encourage continued progress on key steps that will unlock long-term benefits for all of Bosnia and Herzegovina’s citizens.
Second, Bosnia and Herzegovina must avoid actions which undermine this progress. We remain deeply concerned by secessionist rhetoric and actions from the Republika Srpska Entity, designed to undermine the unity and function of the state.
One such example is the proposed agreement on peaceful disassociation. We are also concerned by elements of the All-Serb Declaration which we assess do not align with the Dayton Peace Agreement.
And we regret the reported rise in genocide denial and glorification of war criminals. This has no place in a modern, inclusive and multi-ethnic society.
Third, this mixed picture reinforces the ongoing vital role of the High Representative, who is tasked with upholding the Dayton Peace Agreement.
The international community must enable an environment in which Bosnia and Herzegovina can make progress on reforms and advance its European ambitions. As such, we must continue to promote domestic responsibility and accountability.
We particularly welcomed the High Representative’s recent changes to the Election Law, which contributed to the more positive atmosphere in which the recent local elections were held.
In closing, it is important to emphasise that Bosnia and Herzegovina is and must remain a single, sovereign and multi-ethnic country.
The UK encourages all politicians to put aside their differences and show the political courage to work together towards a more stable and prosperous future for all citizens. (Source: https://www.gov.uk/)
01 Nov 24. The Budget. With the benefit of roughly 48 hours of space between now and the first Budget from a Labour Government in 14 years, and the first from a female Chancellor ever, we can begin to take a holistic view of what was announced and even start to look to the future.
The desire of this Government to provide a clear and stable economic climate for business to plan and invest for the long-term has to be strongly applauded. Decisions like the cap on corporation tax, and maintaining existing rules on full expensing and R&D relief are notably positive examples of the Government delivering on that aim. However, the decision to increase employer National Insurance Contributions (NICs) seems to run contrary to it, and we will work with members to understand the full impact of this change.
While the Chancellor’s £1bn of support for the aerospace sector should be more accurately described as a reconfirmation that planned funding will be delivered, the certainty that it provides is something we really value ahead of the Spending Review.
The £2.9bn for the Ministry of Defence next year is also welcome, however we continue to stress that purely monetary decisions in this area cannot be best for effective delivery and that funding must match the decisions of the Strategic Defence Review.
Importantly, the range of policies announced on Wednesday were significant for our sectors and point to the high regard in which they are held. I do also return to the point I made last week that this Budget is a part of a wider multi-month pivot in this Government’s economic policy rather than a single turning point.
We are happy that this Government appears committed to extensive consultation with industry on its policy decisions. However, until next Spring we will be waiting for clarity on the Industrial Strategy, the Spending Review and the Strategic Defence Review, with the results of these undertakings presumably all announced in relatively quick succession. Similarly, we again saw the pathway to 2.5% of GDP being spent on defence being pushed to a later date by the Chancellor.
Cumulatively, this period of review is not completely convincing on the economic certainty and stability that this Government made clear it wants to foster. This is obviously something we’re feeding into our engagement with them.
With the Budget now passed, we can concentrate on the upcoming results of the Government’s policy reviews and the final publication of the Industrial Strategy, but in the meantime we will continue working very hard to support your business. (Source: ADS)
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