Europe’s Fratricidal Defense Exports
BERLIN/MUMBAI--The announcement last week that India was entering into exclusive negotiations with Dassault for its Rafale fighter jet represents a major coup for the French defense contractor and for Nicolas Sarkozy. The embattled French president was evidently relieved by the prospect of the Rafale’s first ever foreign sale in a deal worth over US$10 billion, telling reporters, “we have been waiting for this day for 30 years.” The announcement is also a blow for the Eurofighter consortium, consisting of the leading aerospace manufacturers in Germany, Britain, Italy, and Spain, whose Typhoon had been the Rafale’s chief competitor. Two other recent decisions have gone against the Eurofighter group, with Switzerland opting instead for Saab’s Gripen and Japan for Lockheed Martin’s F-35. However, Eurofighter had thought itself better positioned in the Indian competition. It believed it was offering the technically superior aircraft and, indeed, the Typhoon had performed better in competitive trials in 2010. Of course, defense sales are about much more than technical specifications, with considerations related to costs, technological transfers, joint production opportunities, and political relations playing vitally important roles. Indian observers had long discussed the higher up-front costs of the Eurofighter, but calculated over the total life cycle, the relative differences would not have been too significant. Cost is therefore unlikely to have been the sole rationale for the decision. One can only imagine that Dassault’s offers on technology transfers and joint production must have been generous. Yet Cassidian, the EADS subsidiary that led on the Eurofighter bid, had only last year signaled its commitment to India by opening the country’s first foreign-operated defense-oriented engineering center. Politically, the prospect of a sole partner in France should have been outweighed by relations with the four Eurofighter partner nations, although Indian officials may have calculated that a single partner would be easier to hold accountable than a coalition. Where there was a real difference between the Dassault and Eurofighter bids was in the nature and scale of political support each received. The French government is comfortable with providing support for its arms export industries in ways that Germany—the lead nation on this Eurofighter bid—is not. In Germany, the idea of coordinating one’s defense, finance, and foreign ministries to support a major defense bid through the establishment of a “war room,” as Sarkozy did, is simply unimaginable. If nothing else, such top-down political support makes it easier to bundle incentives. The sale was also a clear priority for the French president, and given the Rafale’s non-existent record of exports and uncertain future, finding a foreign buyer for the aircraft had become a declared world-wide mission for Sarkozy. These are trying times for Europe’s defense aerospace companies, with European spending on defense falling by about €24 billion in the past three years alone whilst the global marketplace is also becoming increasingly crowded. The sight of Eurofighter and Dassault competing for overseas sales is a further reminder of the complexities surrounding the ongoing attempt to pool and share Europe’s defense-industrial capabilities, efforts that should be finding new momentum in these times of austerity. Europe’s governments and industries know that between the Rafale, Typhoon, and Gripen, they have produced two more variants of fighter aircraft than they actually need. Such legacy programs place a further unnecessary burden on Europe’s shrinking defense budgets and constrain European militaries from effectively configuring their resources to meet evolving requirements. Worse, it is entirely unclear whether any lessons have been learned. The same national imperatives and industrial concerns are now in danger of driving the expensive development of two medium-altitude long-endurance unmanned aerial vehicles (MALE UAVs), Talarion and Telemos. The development of unmanned capabilities may well be the future for defense aerospace, but few in Europe think that two versions of a MALE UAV are really necessary. Fewer still think that Europe won’t end up with two anyway. Sarah Raine is a non-resident fellow with the German Marshall Fund of the United States (GMF) in Berlin and a consulting research fellow with IISS. Dhruva Jaishankar is a program officer with GMF’s Asia Program in Washington.
The views expressed in GMF publications and commentary are the views of the author alone.