Blog AnalysisEU Defense (Doctrine)

Don't we need a European FMS?

American companies benefit from the Pentagon’s “Foreign Military Sales” program, here the RQ 4 – Global Hawk drone recently sold to South Korea (credit: Northrop)

(BRUSSELS2) European countries do not really dare to take the bull by the horns yet. But it will have to be one day. The reduction in defense budgets – and therefore acquisitions – is not temporary but seems to be a long-term trend in almost all European countries: those in the South hit hard by the crisis (Greece, Spain, Italy), those of the East (Romania, Bulgaria… but also Poland in the long term) but also, to a lesser extent, those of the West and the North: the United Kingdom which has started an important 'review' and could further accentuate it and France which should further reduce its budget.

Current projects are no longer enough

The need to preserve a certain capacity of both the European armies and the defense industry has not yet been fully taken into account. But the debates during the last informal meeting of Defense Ministers (in Dublin) showed it: there is an increasingly heightened awareness of the need for action. The “Defense” year should be the start of a more common reflection than until now. If the capacity and regulatory projects currently on the table are interesting; they are no longer enough given the scale of the crisis.

The example of Foreign Military Sales made in US

Like the Americans, shouldn't the Europeans equip themselves with a “Foreign Military Sales” which would not only allow existing surpluses in certain armies to be transferred to others but also to offer a complete “package” to those who want to equip themselves? Because the advantage of the American FMS is above all to be a one-stop shop and to offer a finalized package: from equipment to maintenance, including financing, export authorization, training, etc. buyer does not go through the industrialist but through a Defense Security Cooperation Agency (CASD) which serves as an intermediary, both for the call for tenders and for the rest of the contract. This allows not only to have an attractive price – because purchases are grouped – but also to have an “all inclusive” service. This also has the advantage for the industrialist of finding new markets and therefore no longer producing in infinitesimal quantities.

An effort to make

This means abandoning certain prerogatives at the national level, or rather grouping them together at the European level. This would also force the European level to have a more “industrial policy” approach than until now and less “finger on the seam” of the competition regulation. But this “step” deserves to be examined closely. Because European industries are currently facing an “unfair” but intelligent organization from their American “friends” who have both this efficient instrument and “products” available in quantity. In January 2013, the Pentagon had already collected $2012 billion for the 69 fiscal year; almost doubling compared to the previous year ($34 billion), thus benefiting from the expansion of defense spending around the world. And 2/3 of sales are made via the FMS program. The DSCA portfolio is valued at nearly $400 billion and oversees approximately 13.000 files in 224 countries around the world! And the American agency makes no secret of its objective "These sales also contribute to American prosperity by improving the US balance of trade position, sustaining highly skilled jobs in the defense industrial“. Why not the Europeans? Such a program could be developed first internally, at European level, but also externally.

Nicolas Gros Verheyde

Chief editor of the B2 site. Graduated in European law from the University of Paris I Pantheon Sorbonne and listener to the 65th session of the IHEDN (Institut des Hautes Etudes de la Défense Nationale. Journalist since 1989, founded B2 - Bruxelles2 in 2008. EU/NATO correspondent in Brussels for Sud-Ouest (previously West-France and France-Soir).