Don’t cut your defence budget too deeply, Nato chief warns Britain

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From Times Online May 27, 2010

Deborah Haynes, Defence Editor



Nato’s Secretary-General warned Britain yesterday not to cut defence spending too deeply as it grapples with its budget deficit.

In an interview with The Times, Anders Fogh Rasmussen advised all cash-strapped Nato members to use the tough economic climate as an opportunity to make their armed forces more efficient to tackle the unpredictable nature of modern warfare. “All governments are faced with budgetary constraints,” Mr Rasmussen, the former Danish Prime Minister, said.

“It is very hard for governments to argue that they make deep cuts in social programmes, educational programmes, and pensions but not in defence budgets. So, obviously, defence budgets will be affected by the economic crisis.”

He noted, however, that investment in a country’s defence and security involves much more than just money. “All governments should be aware of the long-term impact of too deep cuts in defence budgets because we know from experience that economic growth is very much dependent on a secure international environment. We know that instability and insecurity hamper economic growth. So if we make too deep cuts in defence budgets it might have a long-term negative impact on economic growth.”

Referring to the budgetary choices faced by George Osborne, the Chancellor, and Liam Fox, the Defence Secretary, he said: “I would give the advice to strike the right balance.”

David Cameron has pledged to keep the defence budget safe this financial year but most analysts expect painful cuts thereafter as the Government concludes a Strategic Defence and Security Review that will signal the shape and size of the Army, Royal Navy and Royal Air Force.

Experts predict that personnel numbers will shrink, while a number of big-ticket procurement projects, such as two new aircraft carriers, scores of fast jets, transporter planes and a fleet of armoured vehicles, are also under threat.

Mr Rasmussen, speaking at Nato’s headquarters in Brussels, said it was important to implement constructive reforms. “If cuts are made primarily within the more stationary parts of our military and if new investments are directed towards more flexible and more mobile and more modern armed forces, then budgetary constraints could be turned into something positive,” he said.

He declined to specify what areas should be axed but suggested that Nato members share equipment. Asked what Britain’s particular strength was within the alliance, Mr Rasmussen said: “Britain, alongside the US, has a capacity to deploy troops out of area and other allies could get inspiration from that.” It was important for the British military to retain that skill, he added. As for whether a slimmer budget would diminish Britain’s Nato role, Mr Rasmussen said: “Britain will remain one of the very important allies.”

Turning to Afghanistan, where Nato faces its biggest challenge, the Secretary-General agreed that there was a need to present tangible results this year to ensure ongoing support.

“It would be the light at the end of the tunnel if we could hand over the lead responsibility for security in some provinces and some major cities,” he said. As its first important campaign outside Europe, success in Afghanistan is hugely important for the future of Nato, particularly as critics question its relevance in the post-Cold War era and with the United States increasingly looking across the Pacific rather than at Russia.

“Nato is about much more than just Afghanistan, but Afghanistan is a test case as to whether Nato is capable to address the new security challenges of the 21st century,” Mr Rasmussen said.

He argued that there had never been more of a need for the alliance, with member states facing ever evolving threats from cyber attacks and Islamist terrorism to Iranian missiles and nuclear proliferation. He is due to present a new strategic concept for Nato to be agreed by all members at an annual conference in November.

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Changes Coming as Bundeswehr Faces Budget Cuts

By ALBRECHT MÜLLER

Published: 27 May 2010 20:18

HAMBURG - Planned German defense budget cuts could affect not only the Bundeswehr but also local industry, said Defense Secretary Karl-Theodor zu Guttenberg, who has called for a strategic review to coordinate procurement and budget planning.

"It cannot be ruled out that we will be facing cuts into the abilities of the Bundeswehr, the operations, and, as it is connected with everything, also into the structures and numbers over the next years," the defense secretary said.

In his May 26 keynote address before generals and admirals at the German Military Academy here, Guttenberg said the planned budget cut of more than 1 billion euros ($1.2 billion) per year would need more than just symbolic reductions or cuts to individual projects.

The budget cut will also affect new procurement and prevent the executive from first defining needed capabilities and financing them later. The budget now could dictate military conditions and plans, Guttenberg said.

Therefore, he announced, one of his major goals is to conduct a strategic review to coordinate armament, equipment and budget planning. The review also would examine the state of core military capacities.

The priority would be to develop a military structure, defined by what Germany can or wants to afford, that can be properly supported and maintained.

There would be the urgent need for some basic changes, he said.

"With present structures and some present processes, we will not be able to guarantee the capability of our Bundeswehr in the long run," he said.

The German defense secretary called for a different basing structure as well, saying he wants to raise the average number of soldiers per garrison to more than 900. Smaller garrisons are less economical and could be closed under certain conditions, he said.

While Guttenberg approved maintaining compulsory military service, which has just been cut from nine to six months, he expects further discussion about its abolishment. Among the service benefits would be recruiting new personnel and better integrating the military into the community.

Guttenberg said that the consolidation of the national budget would be the foundation for all future defense planning. He also said the NATO goal for each nation to spend 2 percent of its yearly GDP on defense by 2010 should be viewed as nonbinding.

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Italian Military Hit by 10% Budget Cut

By TOM KINGTON, ROME

Published: 27 May 2010 11:04

Italian defense officials struggling to cope with reductions in their budgets are bracing for a fresh 10 percent cut delivered by an emergency debt reduction package launched by the Italian government on May 26, a spokesman for Defense Minister Ignazio La Russa said May 27.


An Italian soldier with the NATO-led International Security Assistance Force waves the Italian flag during a ceremony to mark the change of command of ISAF forces in western Afghanistan's Herat province in April. (ARIF KARIMI / AGENCE FRANCE-PRESSE)

The cuts would hit defense ministry coffers in 2011 and may also endanger the top-up funds Italy's armed forces receive from the industry ministry and other sources, a senior defense source warned. The austerity package would also trim state wages and take other measures. In all, it is aimed to save 24 billion euros ($29.4 billion).

The center-right government of Prime Minister Silvio Berlusconi wants to chip away at Italy's public debt and avoid attacks by speculators looking for the next weak link in the Euro zone after Greece's bailout. In presenting the planned cuts, Berlusconi said Italy, "like all countries in Europe, has been living beyond its means."

But according to one senior defense official, the cuts mean "the military is now in a really bad way."

The 10 percent cut comes on top of defense budget reductions executed in 2009 and 2010 and ones planned for 2011. Maintenance-and-operations spending was already poised to decline by 20 percent in 2011, the senior defense official said.

"To that, we would now have to add the 10 percent cut just announced," he said.

Spending by the Italian defense ministry in 2010 stands at 14.28 billion euros, down 0.4 percent from 2009.

Italian opposition politicians said the cuts could damage Italy's military operational capabilities.

"This would be a dangerous cut to make," said Sen. Gen. Mauro Del Vecchio. "Maintenance and operations would be the most delicate area, with the reduction in flight and navigation hours affecting training, which affects operational capabilities."

A fellow opposition senator, Roberta Pinotti, warned that the government had done little about restructuring the Italian military to allow it to survive with less funding.

"The commission set up to look at defense reorganization in the wake of the first cuts produced a document which merely said rationalization was needed, but did not say how," she said. "Those cuts were dramatic; this new cut will be devastating."

To protect defense procurement from dwindling budgets, the Italian government has long relied on top-up funds from the Italian industry ministry, also known as the ministry of economic development. Purchases of Eurofighters, FREMM frigates and new Freccia armored vehicles are among the programs that rely on funding from the industry ministry.

Now the top-up funds could be at risk, the military source said.

"The 10-percent cuts would affect the industry ministry from 2011, which is when a number of funding streams from the ministry for defense programs terminate and require renewal if the procurements are to be completed," the source said. "Funding for the Freccia expires in 2011, yet money is needed through until 2014. FREMM funding from the ministry also expires in 2011, yet is required until 2016 or 2017. Eurofighter funds from the industry ministry expire in 2012, but are required until 2017.

"Funding from the ministry for only four new AW101 combat search-and-rescue helicopters for the Air Force has been agreed, but the Air Force requires 12 helicopters," he said.

The Berlusconi government has tried to beef up maintenance and operations spending with funds normally reserved for overseas missions. Those funds are approved at intervals by the Italian parliament, separate from ministry of defense funding.

In 2009, parliament increased funding this to 1.5 billion euros; defense minister Ignazio La Russa said that the money could be partly used for maintenance of equipment in Italy, before and after that equipment was used in theater.

The defense official said that roughly the same figure would likely be freed up for operations this year.

"About 400,000 euros of that could be used for maintenance and training in Italy," he said.

But the specter of austerity-linked cuts to mission spending in 2011 was real, said the official.

The official said that Italy was also about to send around 1,000 extra troops to Afghanistan.

"This will correspond with a reduction of troops in areas like the Balkans, meaning the number of troops abroad may not change, but considering the extra distance and the greater protection required, a soldier in Afghanistan costs more than one in the Balkans," he said.

E-mail: tkington@defensenews.com.

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French MoD Won't Deny Reports of Budget Cuts

By PIERRE TRAN

Published: 27 May 2010 10:58

PARIS - The French Defense Ministry declined May 27 to rule out spending cuts of up to almost 5 billion euros ($6 billion) over the next three years as officials draw up prospective reductions ahead of the annual dispatch of budget letters from the prime minister's office.

Ministry spokesman Laurent Teisseire declined to deny a report in business daily Les Echos, which said the ministry is preparing for a reduction of 2 billion euros to 3 billion euros in the best case and 4.8 billion euros in the worst over the next three years.

"There are people whose job it is to think of budget scenarios," Teisseire told journalists. "For the time being, it's only an internal exercise which doesn't mean too much since we haven't set out the spending limits yet."

The actual figures will only be known when the prime minister's office sends out the letters, due in mid-June, to each government department, setting out the spending cap, Teisseire said.

Prime Minister François François Fillon has said there will be a freeze in government spending in a bid to manage the massive public deficit.

Teisseire said there were no plans to cancel the move of the chiefs of staff of the armed forces and ministry officials to an integrated site at Balard, in the east of the capital, dubbed the "French Pentagon."

The Defense Ministry has already signed up to cut 54,000 staff - 46,000 military personnel, 7,000 civilian - over the next three years as part of a public sector review.

Any cuts in the defense budget, which is usually around 30 billion euros a year, will likely hurt large companies such as Dassault, EADS, Nexter, Safran and Thales, as well as the small and medium-sized sector, which look to government orders to maintain a steady flow of business.

The Defense Ministry has enjoyed two years of budgetary buoyancy, with equipment spending for 2010 set at 17.02 billion euros out of a total budget of 32.15 billion euros, excluding pensions. The 32.99 billion euro budget for 2009 included 17.94 billion for equipment.

The equipment amounts were unusually high because equipment ordered years ago was delivered, forming a budgetary bow wave.

Defense officials had hoped to find new sources of funding by selling property and digital radio waves, but the real estate market is in the doldrums.

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Bundeswehr Might Be Cut By 100,000 Troops

By ALBRECHT MÜLLER

Published: 2 Jun 2010 15:14

The German defense department is considering a cut in troop strength by 40 percent and suspension of compulsory military services in the latest effort to reduce costs within the country's military.

If enacted, troop strength in Germany would shrink from 250,000 personnel to 150,000.

The newest proposal is coming in anticipation of this weekend's cabinet budget conclave set to begin June 6 in Berlin, according to the newspapers Hamburger Abendblatt, Stuttgarter Nachrichten and Bild, citing sources within the military and the government coalition.

While Finance Secretary Wolfgang Schäuble said the military is targeting savings of more than 1 billion euros ($1.22 billion) annually, suspending compulsory military service would save about 400 million euros.

A spokesman for the defense department would not confirm or deny the reports: "At the moment different scenarios are investigated as a preparation for the cabinet conclave. In this process there are no thoughts prohibited, but there are also no decisions made," said the spokesman, who spoke on condition of anonymity.

Defense Secretary Karl-Theodor zu Guttenberg is expected to hold talks with the finance department on June 4 about his position during the budget negotiations.

"The actual task of national defense could not be met any more with a reduced number of personnel of around 150,000, with a consistent level of deployment," said the head of the Deutsche BundeswehrVerband, Col. Ulrich Kirsch. However, members of the political opposition, such as Agnieszka Malczak of Bündnis90/Die Grunen, welcomed such proposals and called compulsory military service outdated.

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From The Times June 3, 2010

Financial crisis could kill off German national service

Roger Boyes

The German army could lose as many as 100,000 soldiers and suspend conscription as part of radical plans to cut Government spending.

The scale of the national financial crisis may be brought home to Germans next week as ministers outline plans for the 2011 budget. Public debt is now €1,800 billion (£1,500 billion) — with €80 billion of that added this year.

The Cabinet is to go into conclave on Sunday to discuss the situation. The most dramatic plan comes from the Defence Ministry. At a time when it is having to finance important overseas missions, with a force of 3,000 in Afghanistan, it is still being seen as extravagant.

The result: Karl-Theodor zu Guttenberg, the Defence Minister, is ready to abandon one of the country’s most enduring institutions. Military service was established when West Germany joined Nato in 1955. The idea was to educate young people and create a new German soldier, aware of his civic responsibilities: the citizen in uniform. It was accompanied by a scheme of officially vetted conscientious objection, where pacifists could choose to work in old people’s homes rather then bear arms.

Time spent in the army and the alternative civilian service have become bonding experiences for young Germans, and part of the social fabric.

National service is expensive and the trend — with increasing pressure to supply troops for overseas combat and peacekeeping missions — has been to professional force.

From July, conscription was to be cut to six months, which generals say is too short a period to train soldiers for significant military duties.

Now Mr Guttenberg is proposing to suspend – and effectively drop – conscription. The aim would be to cut the army’s strength from 250,000 to 150,000, and save €400 million.

Other plans would be to reduce the number of barracks in the country to 400 and cram more soldiers into the available space. All large armaments projects are also under review. Only overseas operations will be protected from the cuts.

The target is to slash more than €5 billion from the €31.5 billion defence budget by 2014.

“Different scenarios are being played through at the moment,” said a spokesman for the ministry. “There are no taboo subjects, but we must stress that no decisions have yet been taken.”

The focus has been on the army because cuts in almost every department are more politically sensitive.

With Germany paying the lion’s share of the Greece and euro rescue plans, voters have become highly sensitive to the closure of public libraries and swimming pools. Yet these measures too are on the agenda at the cost-cutting summit this weekend.

The economics ministry will have to slice subsidies from coal-mining (currently €1.5 billion), from the film industry (€60 million) and even solar heating manufacturers. Altogether, €5 billion is handed out in direct subsidies and tax breaks for industry.

The biggest-spending ministry is the Department of Employment, which intends to cap rent support given to the jobless. The Family Ministry meanwhile is considering freezing money given to mothers and fathers on maternity and paternity leave.

The Transport Ministry will make many more highways into toll-roads. Germany’s regions, most of them heavily indebted, will also be making cuts. Many of these measures will result in job cuts and a surge in public sector unemployment.

[buglerbilly]

France to Slash Defense Spending

Agence France-Presse

Published: 1 Jul 2010 20:43

PARIS, July 1, 2010 - France's defense ministry will slash spending by 3.5 billion euros between 2011 and 2013 to contribute to government efforts to rein in the public deficit, an official close to the issue said Thursday.

The cuts - less than four percent of the defense budget if pensions are not taken into account - will be partly compensated to the tune of two billion euros due to one-time sales of buildings, the official said.

Defence Minister Herve Morin vowed in March to cut spending.

The official said the cuts would not affect production and delivery of weaponry, planes, ships or nuclear submarines.

The official said the defense budget was provisionally pegged at 95 billion euros for the period from 2011 to 2013 but with the spending cuts, the figure would now be around 91.6 billion euros.

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Weapons Budget Grows Amid Obama Cuts, Pentagon Comptroller Says

July 06, 2010, 12:07 AM EDT

By Tony Capaccio

July 6 (Bloomberg) -- U.S. spending on weapons through 2016 likely will grow faster than the overall defense budget, which will have annual increases of only about 1 percent above inflation, according to Pentagon Comptroller Robert Hale.

“Our goal would be to get forces and modernization to grow by 2 or 3 percent,” Hale said in an interview, while saying that “it’s not a given.”

An increase in weapons spending will include greater purchases of Bethesda, Maryland-based Lockheed Martin Corp.’s F- 35 fighter, new ground vehicles, ship construction, satellite systems and unmanned drones, according to the Pentagon’s long- range plan. Northrop Grumman Corp., of Los Angeles, and Chicago- based Boeing Co. also stand to benefit.

Some money may be shifted into equipment and personnel accounts from an effort to cut $100 billion of overhead costs over five years, announced by Defense Secretary Robert Gates on June 28, Hale said.

“Procurement and research are in the ‘gaining’ portion of the budget,” Hale said. “The goal would be to move money from support-type activities -- operations and maintenance, military construction -- into acquisition.”

Hale’s remarks are good news for defense contractors, said Todd Harrison, a defense analyst with the Washington-based Center for Strategic and Budgetary Assessments.

“It sounds like they are trying to do everything they can now to avoid major program cuts in the next few years,” Harrison said. Yet, if the Pentagon goal of cutting overhead and support costs isn’t achieved, “they will have no choice but to cut” programs, he said.

‘Gusher’ Turned Off

Gates has announced plans to revamp Pentagon spending, saying in a May 8 speech that future budgets will see little real growth because a defense-spending “gusher” that opened after the Sept. 11 attacks “has been turned off and will stay off for a good period of time.”

In April 2009, Gates proposed to cut and truncate programs worth as much as $330 billion over their service lives.

The Pentagon’s $549 billion base budget request for fiscal 2011 represents an increase of about 1.8 percent over fiscal 2010, when defense spending rose 2.1 percent. Those budgets follow eight years of 4 percent average annual growth.

Hale said there still may be more cuts in store for some weapons programs after a Pentagon review later this year for the fiscal 2012 budget.

Weapons Spending

Congress approved $104.8 billion for weapons buying this year and is considering proposed procurement spending of $111.2 billion for fiscal 2011, which begins Oct. 1. The Pentagon may request $120 billion in 2012, rising to $137 billion in 2015, according to comptroller’s office projections that Hale said are, at this time, only for planning purposes.

Estimates about how much money may become available from the cost-cutting efforts are “going to get squishier” as projections move further into the future, Hale said. “That’s just inevitable.”

The Pentagon plan calls for $7 billion in savings in 2012, increasing to $11 billion in 2013 and $18.9 billion in 2014, according to a Pentagon fact sheet. The largest savings are projected at $37 billion in 2016.

While it will be a “significant challenge” to achieve those goals, Hale said that Gates wants “to push the process a little bit. Let’s see how far we can get.”

--Editors: Bob Drummond, Ann Hughey.

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Ares

A Defense Technology Blog

Germany Considers Cuts

Posted by Nicholas Fiorenza at 7/8/2010 12:01 AM CDT

The German Ministry of Defense yesterday was playing down media reports of massive pending defense cuts. The MoD said that the reports concerned an internal study seeking EUR9.3 billion in savings, and described the study as “the basis for upcoming discussions in the ministry and parliament” which Defense Minister Karl-Theodor zu Guttenberg "reserves the right to modify or expand".

The Handelsblatt and Bild newspapers reported that the number of A400M transports and Eurofighters would be drastically reduced and the Talarion UAV program would be cancelled.


EADS photo of Talarion

The 23-page list of proposed cuts reportedly includes:

- halving the procurement of Tiger combat helicopters to 40
- reducing the number of NH90 transport helicopters from 122 to 80
- cancelling orders for 37 Eurofighters, out of 180 originally planned
- reducing the procurement of Class 125 frigates from four to three
- decommissioning eight frigates, ten fast patrol boats and 21 Sea King helicopters
- grounding 15 aging C-160 Transall transport aircraft

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More on this............

Germany Debates Steep Cuts in Aircraft, Ships

By Albrecht Müller

Published: 8 Jul 2010 12:22

BONN - According to an internal working paper, the German military might retire large numbers of planes, helicopters and ships as well as reduce buys of new weapons.

According to a July 7 report by the German newspaper Bild, this could save up to 9.3 billion euros ($11.7 billion) over the long run.

The 23-page paper, "Prioritization Material Investments - Recommended Actions," would affect all services and many major defense projects. However, a Defense Department spokesman said no decisions have been made.

"This paper is only a basis for upcoming discussions in the department and parliament," he said.

He pointed out that Defense Secretary Karl-Theodor zu Guttenberg would reserve the right to amend the paper.

The paper itself suggests retiring 15 of 86 Transall transport planes immediately and reducing the planned purchase of its successor, the A400M. The paper also calls for the immediate retirement of 100 of 185 Tornado fighter jets and the scrapping of the last tranche of the Eurofighter, which contains 37 planes.

Defense Department experts also suggest scrapping the Tailaron UAV being developed by EADS in favor of immediate procurement of the Saateg AA medium-altitude, long-endurance UAV and an advanced version of the Heron UAV.

While the future of the tri-nation Medium Extended Air Defense System had been subject to discussion, the new paper does not suggest it be abandoned.

According to media reports, the Bundeswehr might also buy only 80 instead of 122 NH90 type helicopters and cut new tiger attack helicopter buys by half from 80 to 40.

The paper recommends the German Navy retire eight frigates, 10 fast-attack boats and 21 Sea King helicopters over the medium and long term. At the moment, it owns 21 Sea Kings, 10 fast-attack boats and 15 frigates. The number of new F125 expeditionary class frigates also could be reduced from four to three.

While ThyssenKrupp Marine Systems, one of the members of the consortium to build the F125, did not want to comment, an EADS spokesman said no decisions had been made.

"We are convinced the constructive dialogue will continue and that research and development will always be protected and considered," the spokesman said.

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Air Force Programs Hard Hit in French Budget Cut Effort

By PIERRE TRAN

Published: 8 Jul 2010 13:33

PARIS - The government plans to postpone a number of French Air Force programs, including replacement of the inflight refueling fleet and the 700 million euro ($888 million) upgrade of Mirage 2000D aircraft, in a bid to slash 3.5 billion euros from the defense budget, member of parliament Jean-Claude Viollet said.


Upgrade of the Mirage 2000D fighter-bombers, shown above, would be delayed, Defense Minister Herve Morin said at a July 7 parliamentary committee hearing. (WIKIPEDIA)

Among the programs to be delayed are the upgrade of the fleet of Mirage 2000D fighter-bombers, acquisition of the Multi Role Tanker Transport (MRTT) aircraft and level four of the SCCOA national air command-and-control system, Defense Minister Hervé Morin told a hearing of the parliamentary Defense Committee on July 7, Viollet said.

According to defense sources, Morin told the committee that some elements of the Scorpion land systems modernization program also would be postponed.

An option to buy a small number of Falcon 2000 jets to replace the Falcon 700 for the government comes due in the next few months and is under consideration.

Defense sources said Morin told lawmakers that major programs - such as the Barracuda nuclear attack submarine, Felin infantry gear, FREMM multimission frigate, Rafale fighter and VBCI armored vehicle - would escape the budget cuts.

Studies are now being done on how to implement the delays to mitigate the effects, a defense official said.

The purchase of A400M airlifters will go ahead without any change in numbers, although there are questions whether Germany will buy all 60 planned units.

The revised defense budget for 2011 will be 30.15 billion euros, 30.5 billion in 2012 and 31 billion in 2013, Morin told the committee.

The figures published in the 2009-14 military budget law were 29.65 billion for 2011, 30.32 billion for 2012, and 30.73 billion for 2013.

The 3.5 billion euros of cuts was a significant contribution by the Defense Ministry, but would leave the main operational capabilities outlined in the military budget law intact, Defense Ministry spokesman Laurent Teisseire told journalists July 8. The budget reduction would not affect staff numbers, he said.

[buglerbilly]

Only the Best for Our Boys ...


Guess who will carry the burden of defence budget difficulties?

Commentary by Dr. Ezio Bonsignore, Editor-in-Chief of MILITARY TECHNOLOGY

07:17 GMT, July 9, 2010 Well, I mean, provided that the choice of such “best” does not adversely affect the interests of our own national defence industry. The question, as to whether defence procurement shall always take the shape of an uncompromising search for the best affordable products that would satisfy the operational requirements, as formulated by the responsible military authorities, virtually irrespective of the origin of these products – or rather industrial policy considerations shall be allowed to lead to a clear preference towards domestic systems, even when these have a higher cost and/or inferior performance than corresponding foreign models, is a hotly debated and indeed most crucial issue in many countries. And, contrary to what people outside the defence community might perhaps intuitively assume, there are no clear-cut answers to that question.

On the one hand, it can certainly be stressed that our military are tasked with the extremely important mission to defend and protect our population and sovereign territory, and to foster our national interests abroad. To deliberately and knowingly equip them with inferior tools than our financial muscle could otherwise provide, simply because doing so leverages a certain political capital in sustaining jobs at home and ensuring that taxpayer’s money remains within national borders, would not only put soldiers’ lives at unnecessary risk, but it might ultimately prove suicidal in strategic terms.

But on the other hand, it would take an utterly myopic view of national security issues to ignore that a robust domestic industrial base is a key element in a country’s overall defence posture. Indeed, it is arguably only the existence of such an industrial base that will enable a truly independent defence and security policy, or will anyway ensure a prominent position within an Alliance. This is particularly in terms of guaranteeing that a decision by the national government to use of threaten the use of military force against an hostile opponent would not remain dependent on a possible veto by foreign suppliers. Needless to say, a viable defence industrial base can only be created and then sustained through a determined and far-sighted policy of governmental support – a policy which, yes, under certain circumstances might even imply accepting to pay more for less. Political decisions in this latter direction should not be automatically perceived as always and necessarily involving undue subservience to industrial clout.

Walking the tight line between wasting taxpayer’s money, while undercutting the Armed Forces’ operational capabilities, and starving the national defence industry until it eventually collapses and disappears, is difficult enough under normal circumstances. But it has now become a very tricky affair for many Western and most particularly European nations, which are currently facing a crisis situation in defence procurement.

Countries such as France, Germany, Italy and the UK are all experiencing severe financial difficulties, that will unavoidably dictate substantial cuts in (amongst several other lines of government’s expenditures) their respective defence budgets. At the same time, the continuing commitment to the ongoing counter-insurgency conflict in Afghanistan creates a mounting flow of urgent requirements for new or additional equipment, to be procured and fielded within the shortest possible delay – and this in a situation, whereby the available financial resources are declining, while the national defence industry is often not in a position to immediately supply the troops in the field with the materiel they need. The net result is that the traditional balance these countries have always strived to maintain between domestic procurement and purchases abroad is not longer sustainable. Furthermore, and in my eyes even more alarming, the competition for even scarcer financial resources exacerbates the perpetual fratricidal struggle amongst the Services for a larger share of the defence pie, and risks putting our industries and the military on a collision course.

This unsavoury state of affair did came rather dramatically to the fore during the latest “Eurosatory” show in Paris, when the leading French daily, “Le Figaro” (which incidentally belongs to the Dassault family) ran a full-page article to criticise the French Army’s tentative decision to acquire the Israeli SPIKE anti-tank missile system rather than the national MILAN-3, and the Air Force’s expressed interest for the US PREDATOR UAV system over the various notional schemes for national or European development programmes. The article was moderate in tone, and it leveraged very much the same rational considerations that I have expressed above. Yet, it remains that it effectively demanded for the choices of the French Armed Forces to be overturned, in the name of industrial interests – even though these choices originate straight out of operational experience in Afghanistan, and are not intended to fill the depots at home, but rather to support the troops engaged in combat. I doubt very much whether the French military would appreciate such a move, or whether it would be conducive of a good relationship between the military and industry.

By the same token, during his inaugural speech at the show the French Defence Minister, Hervé Morin indicated that he intends to brave the coming cuts in defence expenditures (he hinted at some €5 billion being chopped off) by maintaining procurement investments more or less at the current level, while unloading all of the required savings onto the operating portion of the budget. Industry was delighted, but here again I don’t seem to think that the French military would really appreciate receiving equipment, they can’t then train with or properly maintain for lack of funds.

Mr. Morin also forcefully stressed the case for further expanded European cooperation, at both governmental and industrial level, as the only way to carry all of us out of the current threatening predicament. But while it would certainly be difficult to deny the advantages of cooperation in times of decreasing resources, I for one do harbour severe doubts as to whether yet another row of concentrations and so-called “rationalisation” across the European defence industry would really be the panacea the Minister seems to assume.

Just to stay with the issues raised by the “Le Figaro”, the existence of very large pan-European industrial concerns did not prevent us from failing miserably to I wouldn’t dare suggesting anticipate, but not even reproduce the technological advances obtained by US and Israeli industries in the ATGW and UAV sectors. It is not simply a case of more or less equivalent products being available in Europe, albeit at a higher price, which could still be acceptable; they are not available at all, which is what now forces the military to look abroad.

The responsibility for this emblematic failure must be evenly distributed between the industry, the governments and the military. Industry quite clearly did not only gain strength through the concentration process of the past decades, but unfortunately also very robust doses of complacency and self-delusion about a captive domestic market virtually impenetrable by foreign competitors. And on the opposite side of the procurement fence, if someone ever encountered something resembling a rational and coherent industrial defence policy, in any European country, please warn me, because I would be very interested in taking a close look at such a bizarre animal. Interventions have rather been hapzard, mostly reactive rather than proactive, and far in between. Say, it was all fair and well for the French government to gently “persuade” Dassault to cough up a couple billion Euros to buy a large stake in Thales, that the aircraft company didn’t really need or want, but apparently nobody came to the idea that it might prove wise to invest 1/10th of that sum towards the development of a UAV family.

But there is no sense or scope in crying over the spilled milk. At least, the perception has now been brought home that we are all sitting into a leaking and rudderless defence procurement boat, while the sharks are circling even closer. This I would in a sense regard as the good news, because I still do believe that we have the resources and capabilities to plug the holes in our boat and sail here to safety – if we really want to.

But whether we also have the will, is a different question altogether.

----
By Dr. Ezio Bonsignore, Editor-in-Chief of MILITARY TECHNOLOGY

[buglerbilly]

France To Delay Air Programs

Mirage Jets, Tankers, C2 Hit by Cuts

By PIERRE TRAN

PARIS - France will postpone program contracts worth some 5.4 billion euros ($6.8 billion)

Published: 11 July 2010

A sketchy outline of affected programs emerged during a July 7 hearing in which Defense Minister Hervé Morin appeared before the parliamentary defense committee. Morin said the government plans to postpone orders for a new fleet of multirole tanker and transport (MRTT) aircraft to replace the C-135 fleet and the 700 million euro ($888 million) upgrade of Mirage 2000D aircraft, according to Jean-Claude Viollet, a member of Parliament who attended the hearing.

Other programs to be pushed back include an upgrade to level four of the SCCOA national air command-and-control system, worth some 500 million euros to Thales in new radars, and elements of the Scorpion land systems modernization program, Viollet said.

Defense sources said Morin told lawmakers that the Barracuda nuclear attack submarine, Félin infantry gear, FREMM multimission frigate, Rafale fighter and VBCI armored vehicle would escape the budget cuts.

Defense Ministry spokesman Laurent Teisseire declined to confirm which programs would be affected, saying anything that had "not been signed or put under contract" could be delayed.

But he told journalists on July 8 that the budget reduction would not affect staff numbers. And he said the intended cut of 3.5 billion euros was significant but would leave intact the main operational capabilities outlined by France's military budget law.

One defense official said that even after the cuts, revised budget figures show the Defense Ministry getting an average annual raise of 3 percent. That's far better than the "zero value" increase set by the prime minister's office for other government departments. Such a scenario for the Defense Ministry would have meant cutting 4.8 billion euros.

Another defense official said studies are now being done on how to implement the delays to mitigate the effects. Ministry staffers were looking to get a 50-50 split between equipment and administrative costs.

Morin told lawmakers that the reduction allows maintenance of the broad balance in capabilities.

"The concern is how to succeed in the reforms for defense and the consequences of the cuts on the contract for operations," Viollet said.

He said the Defense Ministry needed to lay all the cards on the table, giving details of the different budgetary scenarios and the effect the cuts will have on the price of equipment.

Invalidated White Paper?

But at least one analyst said the cuts push the military off the track laid down by the government's most recent broad strategic guidance.

"The budget announcement renders invalid the defense white paper," said Loic Tribot La Spiere, chief executive of think tank Centre d'Etude et Prospective Stratégique.

The white paper set out objectives for an operational contract for the armed forces, notably deployment of 30,000 troops within six months for a year, backed by 70 combat aircraft for high intensity operations, and air assets projecting 1,500 soldiers out to 8,000 kilometers, with full autonomy in command and control, air detection and air traffic control.

But key to that vision are the MRTT aircraft now slated for delay. The biggest item in the budget - an order for 14 aircraft - could cost around 4.2 billion euros, based on one market analyst's estimate of 300 million euros per militarized Airbus A330 MRTT.

The expected delays on upgrading the Mirage 2000D and the SCCOA air command-and-control system would hit Thales, which stood to sell equipment on both programs.

Work on converting the Mirage 2000D fighter bomber to an air defense variant was worth about 700 million euros, Viollet said.

An Air Force spokesman confirmed the figure.

The upgrade of some 70 Mirage 2000Ds, expected this year, is essential to meeting the operational contract, the Air Force spokesman said.

Under the planned delivery rate of 11 Rafales a year, the service would have a fleet of 130 of the multirole aircraft by 2020. That is when the Mirage 2000D would be retired from service, leaving insufficient fighters to meet the operational contract.

The upgrade, however, would extend the operational life of the Mirage 2000D to 2025 and give additional air-to-air capabilities to the aircraft, which is equipped as a strike fighter.

"This is a big operational requirement," an Air Force officer said. "This is a complete mission change."

Gen. Jean-Paul Palomeros, the Air Force chief of staff, told the defense committee on Oct. 7 that he looked to the 2010 budget to "allow us to start the process of upgrading our Mirage 2000D, which will allow us to extend our fleet to 2025." He added, "guaranteeing the life of our combat aircraft remains a challenge of the absolute first order."

For the Mirage upgrade, Thales stood to have signed a contract to swap out the present terrain-following radar and install the RDY 3 radar and a fire-control system for the infrared-guided Mica air-to-air missiles needed to boost the Mirage's self-protection. The refit would also include integrating the Astac radar reconnaissance pod and changing the man/machine interface.

Technical studies, worth 36 million euros, have been done on the conversion, but the delay means less revenue for Thales.

On the SCCOA command-and-control system, Thales had expected to sell some 500 million euros of new GroundMaster radars in the next three to four years in the upgrade to level four.

EADS and Thales have a 50-50 joint venture company dubbed MOSS SAS, which acts as prime contractor for the SCCOA program.

Other Programs in Limbo

Among other measures, an option to buy a small number of Dassault Falcon 2000 executive jets, to replace the Falcon 700, for the government falls due in the next few months and is under review. A second Falcon 7X was bought in March but has not yet been delivered.

The purchase of A400M airlifters will go ahead without any change in numbers, although there are questions about whether Germany will buy all planned 60 units.

The revised defense budget for 2011 will be 30.15 billion euros, 30.5 billion in 2012, and 31 billion in 2013, Morin told the parliamentary committee.

Those figures compare with those published in the 2009-14 military budget law: 29.65 billion for 2011, 30.32 billion for 2012, and 30.73 billion for 2013. Those figures were at 2008 prices.

On that basis, the 2011 equipment spending would be about 15 billion euros, 2 billion less than the 17.02 billion budgeted for 2010.

A projected 1.9 billion euros in "extra-budgetary revenues" has been revised upward to 2.3 billion euros because the digital frequencies to be sold, along with buildings, and sale and leaseback of the Syracuse military telecommunications satellite, had been undervalued.

A decision to postpone programs is "just smoke and mirrors," Tribot La Spiere said. Given the size of the reduction, real decisions need to be made on which programs to cut. "This is a no-decision decision."

He said the delay would simply put off a decision to someone else.

Cooperative Tanker?

Given the planned cuts in Britain, France, Germany and Italy, decisions need to be made on pooling capabilities and a specialization of defense tasks, he said. Given the lack of money to perform the full range of missions, governments should think about which ones to opt for, he said.

Senior Air Force officers had been hoping an order of 14 air tankers will be placed next year to replace the aging fleet of 14 C-135 FR aircraft by 2015.

The parliamentary committee asked Morin if the British Future Strategic Tanker Aircraft fleet might be shared as a stopgap measure.

The MRTT is to refuel nuclear-armed strike aircraft, and also carry cargo long distances.

[buglerbilly]

Analysis: Defense in firing line as Europe begins budget cuts

By Peter Apps, Political Risk Correspondent

LONDON | Fri Jul 16, 2010 7:08pm EDT

LONDON (Reuters) - For European policymakers desperate to cut spending, the defense budget looks an appealing option. But military chiefs and arms firms will lobby hard, arguing that jobs and geopolitical clout are on the line.

In the early going of the financial crisis, defense budgets were under little pressure and indeed were often seen as part of a wider economic stimulus effort. But with the focus shifting to austerity and rebalancing books, that dynamic will change.

"In the short term, defense is an obvious area to cut," said Jonathan Wood, global issues analyst for the London-based consultancy Control Risks. "It doesn't have the same political dangers as cutting social spending."

Britain's new government is already pushing through a comprehensive defense review, making it clear that military budgets will come under particular pressure. Other European governments have frozen key decisions.

Across the continent, the main choice will be whether to scale back or axe major projects -- warships, aircraft, new vehicles -- or cut manpower including sometimes bloated conscript or formerly conscript armies.

"My worry is that they do precisely the wrong thing and keep the numbers while cutting the kit we really need, particularly heavy airlift and helicopters," said Giles Merritt, director of Security and Defense Agenda, a Brussels-based think tank.

That could hit the value of firms such as BAE Systems (BAES.L), Finmeccanica (SIFI.MI) and EADS (EAD.PA).

"Valuations for European defense stocks continue to look attractive, (but) this alone will not be enough to drive these stocks upwards," wrote Morgan Stanley analysts. "Near-term news flow around European defense budgets is likely to be negative."

But the companies are fighting back.

THREATS OVER JOBS

"At worst, firms like BAE can threaten that they might move their domicile somewhere else -- and you know what that would mean for jobs," said defense analyst and former lobbyist Robin Ashby.

That may mean which projects survive could depend as much on domestic electoral politics as strategic need.

For example, Britain's junior coalition partner Liberal Democrats are generally cautious on defense spending but enthusiastic about it in their keystone southwestern constituencies.

Policymakers are also hamstrung by the costs of cancelling pre-committed projects. Short-term costs -- payroll, fuel -- are easier to cut, but risk leaving costly equipment unused and wasted.

Immediate commitments such as Afghanistan also make it politically dangerous to be seen as cutting support for troops.

"Short-term projects aimed at keeping soldiers safe will get priority," said Alastair Newton, once a diplomat and civil servant responsible for spending cuts and now a political analyst for Nomura. "Other projects will be more vulnerable. There will be a lot of swapping between budgets."

Britain's Foreign Office and Ministry of Defense would particularly look at how they could use funding from the Department for International Development (DFID) that looks to have been ringfenced, he said.

On one level, analysts perceive a drive to high-tech new solutions: drones, satellites, robots and cyberwarfare. But powerful vested interests protect the status quo.

Most analysts agree there are multiple savings that could be made. Britain's Parachute Regiment and Royal Marines could be combined into one elite unit, for example, Ashby suggests. All three services -- army, navy, air force -- could even be merged into one.

HITTING EUROPE'S CLOUT

But virtually no one expects defense chief to back that idea since they are desperate to protect their key jets, ships and regiments. "They are not only protecting their services, they are protecting career structures," says former lobbyist Ashby.

A nascent protectionism -- at least in the short term -- means few expect any drive to set up new multinational projects as governments hunker down to try to protect domestic industry.

"I think it will get worse before it gets better," said former European Defense Agency chief Nick Witney, now a senior policy fellow at the European Council on Foreign Relations.

"I think after 18 months or so... the logic of pooling effort and resources will reassert itself, I hope."

That could see France and Britain, the two military powerhouses of the European continent, come together with projects on tanker aircraft.

In the meantime, which projects live or die might also heavily depend on what stage they are at. The A400M cargo aircraft is regarded as sufficiently advanced to be relatively safe, Witney says, while the chances of funding a helicopter program -- still at a much earlier stage -- are more remote.

Europe might be finding making defense cuts is tough, but the United States -- by far the world's biggest defense spender -- is expected to struggle even more as it starts to look at its own military budget as operations in Afghanistan wind down.

"The military-industrial lobby... is much more entrenched in the American political system than in the European so it's less likely to see as serious a hit," said Ian Bremmer, president of political risk consultancy Eurasia Group.

That means Europe will be cutting defense spending faster than anywhere else at a time when emerging powers -- particularly China and India -- are building.

Some argue that short-termist policy-making could further reduce the continent's dwindling global clout.

"This is part of a much larger story," said Nomura's Newton. "It's been a bad year for Europe. They were more or less sidelined in the Copenhagen climate talks and the euro zone crisis has really undermined them. This will play into that."

(Additional reporting by Tim Hepher in Farnborough and David Brunnstrom in Brussels; Editing by Mark Heinrich)

[buglerbilly]

Published 08:44 18.07.10
Latest update 08:44 18.07.10

Defense budget to be sliced for first time in years

Twenty ministers − from Likud, Labor and Habayit Hayehudi − voted in favor. The five Israel Beiteinu ministers objected, the four Shas ministers abstained.

By Moti Bassok

The cabinet passed the draft budget for 2011 and 2012 and the Economic Arrangements Law by a large majority on Friday afternoon, after 18 hours of debate that started Thursday evening.

Twenty ministers − from Likud, Labor and Habayit Hayehudi − voted in favor. The five Israel Beiteinu ministers objected, the four Shas ministers abstained, and one Labor minister, Isaac Herzog, was absent.

The most contentious portion of the nation’s second two-year budget involved defense − the Finance Ministry fought bitterly to decrease defense spending, while the Defense Ministry pushed for an increase.

Ultimately, the matter was put on the table of Prime Minister Benjamin Netanyahu, who decided to cut the defense budget by NIS 2.7 billion over the next two years. Defense had sought a NIS 6.76 billion increase.

Netanyahu also made a decision on another contentious matter − retirement age for non-combat career soldiers will be gradually increased to 50, up from the current 45. The move is expected to save NIS 600 million over the next two years.

The Finance Ministry had demanded the retirement age be raised to between 52 and 57, and that the defense budget be cut by NIS 4.2 billion.

Because the defense budget is not being cut by as much as the treasury had demanded, the other ministries will also be facing an across-the-board cut − 2% this year and 3% in 2011 and 2012.

While the Finance Ministry has been pushing to reduce the defense budget for years, this is the first time in years it has convinced the prime minister to go through with the move.

Defense Minister Ehud Barak had objected categorically to a budget cut, but accepted Netanyahu’s compromise, and his faction, Labor, showed nearly unanimous support for the draft budget.

Netanyahu and his finance minister, Yuval Steinitz, rejected the demands of the Shas faction. The budget calls for freezing the automatic updates for child and old-age stipends in 2011, and Shas wanted that move undone.

This matter is likely to come up for debate during the Knesset discussion on the budget.

Now that the budget and Economic Arrangements Law have been approved by the ministers, the Finance Ministry will pass them along to the Knesset by the end of October. The Knesset and Finance Committee will have until the end of the year to approve them.

The total state budget for 2011 was set at NIS 345.1 billion, and the budget for 2012 was set at NIS 358.6 billion. It was drafted based on the assumption that the economy will expand by 3.8% in 2011 and 4% in 2012 − both relatively high rates of growth for the Western world.

The maximum budget deficit for 2011 was set at 3% of GDP, or NIS 25.9 billion, and the 2012 deficit was capped at 2% of GDP, or NIS 18.3 billion.

The draft budget predicts total government revenues at NIS 232.8 billion in 2011 and NIS 248.5 billion in 2012.

“The budget we’re submitting today is responsible and balanced, and creates a level of stability for Israel and its economy for the next two years,” Netanyahu told the ministers before the vote. “The Bank of Israel governor, our friend Prof. Stanley Fischer, told me yesterday, ‘This is an excellent budget.’”

He reminded the ministers that every addition to the budget comes out of the public’s pocket.

“It may not be immediately evident when the deviation is first made, but all you need to do is to look at what’s happening in some of Europe’s leading nations. We won’t let something irresponsible like that happen in Israel,” he said.

Steinitz said after the vote, “After many years when the defense budget received significant increases, which helped strengthen the defense establishment, the government chose to give some of these additions to the budgets for education and higher education, and to advance the country’s main growth engines such as infrastructure development and high-tech industry.

“The defense budget will continue to grow over the following years at a moderate rate, in keeping with the Brodet report’s recommendations, alongside the necessary efficiency measures,” he added.

[buglerbilly]

Related to the above this is just confirmation of the obvious, EADS (along with BAE) are making significant moves re-focussing efforts Overseas....................not least because European budgets are in decline for the next 5-10 years...........

EADS Looks Outside Europe to Fuel Growth

By NICOLA CLARK, NY Times

Published: July 17, 2010

(July 18, 2010) “It is quite clear that European markets will decline, or be stable at best,” Stefan Zoller, chief executive of the military division of the European Aeronautic Defense and Space Company, said Saturday. Mr. Zoller was speaking as aerospace industry executives were converging here in advance of the Farnborough International Airshow, which begins Monday.

The mood among major contractors is grim amid forecasts that austerity programs across Europe will force the region’s military budgets to shrink 10 to 15 percent through 2012 and continue to decline until at least 2014.

The $660 billion defense budget in the United States — the world’s largest — will probably be cut by about 7 percent over the same period, analysts say.

“Strategically, we have to go where the money is, and the money is around the globe,” Mr. Zoller said.

EADS said Brazil, India, Saudi Arabia and Qatar were among the countries budgeting more for defense and security and where the company is pursuing lucrative deals to supply its Eurofighter jets, Eurocopter helicopters as well as border security and surveillance systems.

Military spending in Brazil rose 23 percent in 2009, while in India the defense budget was raised by 35 percent this year to $40 billion. Analysts at Frost & Sullivan predict that budgets in the Middle East and Persian Gulf regions will surpass $100 billion by 2014.

“These are developing markets, they are huge markets,” Mr. Zoller said.

But such deals are increasingly coming with strings attached that oblige contractors to invest in developing the industrial bases of customer nations and share critical aerospace technology, he said.

“It’s clear that the old concept of exports won’t prevail,” Mr. Zoller said. “These nations are asking for their own competence and for the ramp-up of their own industries.”

Louis Gallois, the EADS chief executive, stressed that the group was keen to work with European governments to find ways to avoid the permanent transfer of aerospace jobs and expertise overseas. But he argued that the current environment was pushing the entire industry to reconsider strategies that for decades have relied heavily on home-market demand.

“We have seen the U.S. looking abroad as well,” Mr. Gallois said. “Export competition will become tougher. And everybody, including the U.S. companies, will go outside to foreign markets and they will be obliged, by and large, to invest and partner and share technology with the customer countries.”

In an interview, Mr. Gallois conceded that demand from emerging markets was unlikely to be of a scale sufficient to compensate fully for the budget reductions in Europe. “But it could be a way, among others, to mitigate the impact of the defense budget constraints.”

EADS has long sought to increase the size of its military activity relative to its Airbus civil aircraft business, which generates about 65 percent of revenue. Mr. Gallois said that task would be more difficult in the short run as Western governments seek to pare military costs. But over the longer term, he predicted EADS would achieve an equal balance between the two divisions.

“Globally, the threats are such that a lot of countries will wish to build and sustain their defense capacities,” Mr. Gallois said.

Mr. Zoller, the EADS defense chief, warned that if Europe could not provide the economies of scale to support growth, “then we have to become more global, and we have to do that even more speedily than we have envisaged so far.”

“And once we have industrialization in other countries,” Mr. Zoller added, “it’s quite clear that a lot of labor will be going there.”

[buglerbilly]

Winter Of Discontent For European Militaries

Jul 28, 2010



By Douglas Barrie, Robert Wall, Michael A. Taverna
Farnborough

London will decide in September where the ax will fall on defense as Europe’s main spenders come under ever-increasing pressure. Serious cuts and delays are inevitable as governments tighten belts.

Liam Fox, the British secretary of state for defense, used the platform of the Farnborough air show to reiterate there was no option but change for the U.K. defense sector, for the ministry, the armed forces and industry.

Fox, in a keynote address, told the audience of defense industrialists: “The current defense program is entirely unaffordable, especially if we try to do what we need to do in the future while simultaneously doing everything we have done in the past.”

Berlin and Paris are facing similar budgetary challenges, with present spending plans under review. Pan-European programs caught in the upheaval include the Airbus Military A400M, with contractual negotiations expected to drag on until the fourth quarter.

London is planning to make public the findings of its Strategic Defense and Security Review (SDSR) in late October. The outcome of deliberations in all three European capitals will have far-reaching ramifications for the Continent’s defense and aerospace industry.

Fox is committing the government to revamp the Defense Industrial Strategy (DIS) after it concludes its strategic review. He says a consultative green paper on strategy is to be published this year, with the full-blown revised DIS to follow in Fall 2011.

The industrial strategy was launched in December 2005, with expectations that it would be updated in 2007-08. In the past 24 months, as the need for a U.K. defense review became increasingly clear, any DIS revision made sense only post-review. Industry, however, wants to see the two published as close together as possible.

Ian King, BAE Systems CEO/chairman of the Defense Industries Council, says a “new DIS is essential.” Following Fox at the podium, King said there was a “need for a clear coherent strategy.”

Elaborating on the SDSR effort, Fox cautioned that, “Without cost containment in the current programs, we have no option but to either cut the programs currently underway or curtail investment in future programs.”

Though the government has not identified specific programs as being vulnerable, Fox stressed, “We must reduce fleet numbers that provide any one capability because we cannot afford the luxury of multiple supply chains and the associated training and infrastructure costs.”

Fox last week used the example of the Royal Air Force’s airlift fleet, which under present plans will add the A400M to the already in-service aircraft—Boeing C-17s and Lockheed Martin C-130Js. Whitehall officials have already suggested the C-130J could be withdrawn well in advance of the original out-of-service date of 2030.

One area of contention, however, is whether the A400M will be capable—given its comparative size—of meeting some special forces roles now fulfilled by the Hercules fleet. A dwindling number of C-130Ks provide this capability, which is in the process of being shifted to some of the C-130J fleet.

An earlier than planned withdrawal of the Harrier GR9 and Tornado GR4 fleets is also being considered. The long-term future of the air force’s Tranche 1 Typhoon aircraft may also be examined given that this variant will require a “mid-life” upgrade late in this decade.

Germany is also mulling cuts in aircraft and helicopter numbers as it struggles with its defense budget. Italian politicians, meanwhile, have indicated that they are the latest partner nation planning to drop Tranche 3B production.

While the SDSR may be a financial stick, Fox is offering industry a carrot—increased government support in the export arena. Part of the “deal here to be struck,” said Fox, is that: “the British government will support the U.K. defense industry as a strategic asset; we will support the drive for exports with an active and innovative program of defense diplomacy.”

Discussing the A400M, EADS CEO Louis Gallois says he believes industry will have to wait a few more months before a new contract governing the airlifter is in place.

In March, the partner governments and industry agreed on a way forward for the three-year-delayed and over-budget aircraft, but this has not yet been translated into concrete action. Airbus Military was hoping a new contract could be in place by around mid-year, but that has failed to happen.

Gallois does not anticipate a finalized contract until fall. Talks are continuing and, he says, everyone is sticking to the terms of the March accord, although he cautions that this could change.

The increasingly bleak budget environment also is forcing businesses to rethink strategies. For instance, EADS will need to step up efforts to globalize, says Stefan Zoller, CEO of its Defense & Security Div.

Gallois pins a time frame to the discussion, noting that 3-4 difficult years probably lie ahead.

Just how deeply the European budget crisis will affect EADS and defense markets in general is not certain.

Cuts in the U.K. defense budget could reach 20%. Germany is looking to slash at least €4 billion ($5.1 billion), and France projects a €3-5-billion curtailment. Spain is eyeing a reduction of more than 6% in spending.

But Zoller notes, “It is quite clear European markets will decline or will be stable, at best.” As a result, “we have to go where the money is and the money is around the globe,” he says, referring to India, Brazil and the Middle East.

“They [have] huge . . . developing markets.” For his business, Zoller says that means, “We have to become more global and we have to do that faster than we had envisioned.” To be successful, industry must focus on building agreements with companies and countries to help them grow their respective industrial capacities.

Zoller also expects U.S. companies to be chasing those markets more aggressively as the Pentagon’s spending flattens.

In the European markets, Zoller says the near- to mid-term will be turbulent as budgets and forces are restructured. However, he sees an overall positive outcome. “The restructuring of the forces today will, in the long-term, support our business,” since it leads to healthy customers.

Nevertheless, he notes, “We have to manage the interim effect.”

Germany could see significant cuts to its armed forces as it, too, faces budget woes.

Gallois suggests that focusing on services will help mitigate near-term budget pressures. “I think we can propose innovative solutions, allowing the governments to save money, but at the same time getting the capacity we need.”

Meanwhile the French defense ministry faces a near-term €3.5-billion cut over the next three years to help curtail the country’s ballooning deficit. Although this is less than the €5-billion chop it initially feared, it will be targeted squarely at hardware. Moreover, a lower-than-expected economic performance could increase this sum later, caution industry executives.

The consensus is that at least some big-ticket purchases will be deferred and other existing programs stretched out.

French Defense Minister Herve Morin told a national assembly defense committee July 7 that the multirole tanker transport (MRTT) program, Mirage 2000D and Sccoa air command-control system upgrades, along with the Ceres signals intelligence satellite network, would be among the programs likely to be deferred.

All of the systems are covered by the 2008-13 multiyear defense spending plan and the 2007 defense white paper on which it is based.

Defense officials insist that the ministry will do all it can to preserve the top priorities of the white paper and note that a final decision is not expected until September-October, when the next annual budget proposal is to be submitted.

The French air force says the Mirage 2000D upgrade, intended to provide the aircraft an air-to-air role and extend its life to 2025, is necessary to maintain a minimum combat aircraft capability. Only 83 new-generation Rafale fighters will be available by 2013 and barely 130 by the end of the decade.

An MRTT delay could be politically sensitive because it could hit France’s ability to refuel its nuclear strike aircraft.

Photo: Airbus Military

[buglerbilly]

Germany Looks to Cut Defense Spending

Sep 30, 2010

By Jens Flottau, Robert Wall
Frankfurt, London



Concerns are growing in Germany that adjustments in the size and scope of the country’s armed forces could threaten its defense industrial capabilities and jeopardize a multinational agreement on the A400M military transport.

The revised modernization plans aim to trim more than €8 billion ($10.5 billion) from the defense budget and reflect potentially much reduced military assets.

Labor groups are worried about the extent of the cuts. Germany’s metal workers union, IG Metall, warns of the “dramatic impact” on aerospace employment, particularly if the Eurofighter Tranche 3B and Talarion unmanned aircraft system project are scrapped.

EADS has been pushing Germany, France and Spain to launch the Talarion program for more than a year. But France has been exploring other options to meet its medium-altitude unmanned aircraft needs and the German air force has expressed a preference for an off-the-shelf system that could be fielded more quickly. Berlin has indicated it is keen to retain independent German technology skills in unmanned aircraft.

Thomas Pretzl, head of EADS Germany’s works council, says 15,000 industry jobs are at stake. He points out that without the Talarion, the country will be dependent on foreign products. Export chances for the Eurofighter would also be hit, as important product upgrades would only be incorporated in Tranche 3B.

A German defense ministry official says the proposals will have to be weighed against each other. A decision to keep more of one system would lead to deeper cuts in other areas so as not to threaten the reduction targets.

The report on revising the German defense structure is due by year-end. It will trigger a detailed review and decisions on future investment.

IG Metall warns the A400M procurement could be slashed to as few as 25 airlifters, although industry officials say that number does not reflect any known planning scenario. Since Germany is the largest customer for the transport, its actions will have considerable consequences on the program.

Even protracted decision-making on the German A400M buy could have consequences. Industry is paying €100 million in monthly A400M development costs, holding out for a contract that it had hoped would come this summer.

Under a March agreement among the seven A400M-buying governments—devised to deal with program delays and cost increases—states have committed to cut no more than 10 aircraft from the 180 planned joint procurement.

One industry official indicates that if Germany reduces its initial order to markedly fewer than 60 A400Ms, industry would strive to renegotiate the contract with Airbus.

The country’s liberal FDP party, one of the three parties in the coalition government, is arguing in favor of a much smaller buy. FDP defense spokesperson Elke Hoff suggests taking only 45-49 aircraft. Juergen Koppelin, an influential FDP budget specialist, advocates an order of just 40 aircraft.

Another German government official indicates the defense ministry might move the A400M decision forward, in spite of the pending overall review, to assuage uncertainty, but that is not guaranteed and the decision could slip into 2011.

EADS CEO Louis Gallois says he wants a deal by year-end. So far the company has been patient, but as the year draws to a close and potential implications of continuing cash outflow have to be built into full-year accounts, that could change.

In addition to weighing the A400M buy, the defense ministry is proposing to phase out 15 Transall C-160s and 100 of its 187 Tornados, as well as halving the in-service 44-aircraft Phantom fleet. The internal defense ministry paper also suggests reducing the operational fleets of MBB BO105s and Dornier UH-1D 105s and taking no more than 80 NH90s. Tiger attack helicopter numbers also may be cut back.

The moves are part of a broader restructuring of Germany’s armed forces, which will be cut to well below 200,000 from the current 250,000. As part of the changes, Defense Minister Karl-Theodor zu Guttenberg suspended compulsory military service, a move that was highly controversial in his conservative CSU party.

Photo: Mark Wagner

[buglerbilly]

Mirage 2000D Upgrade, Tanker Fall In French Cuts

Oct 1, 2010

By Robert Wall

LONDON — France is facing the prospect of real capability gaps as the country adjusts its defense spending to try to bring down its mounting budget deficit.

As part of its first concrete action, the government announced Sept. 29 it plans to curtail defense outlays by €1.3 billion (U.S. $1.77 billion) over three years. The move, expected for months, is nonetheless significant because it reverses several years of increasing defense spending, even if only modestly at times.

But military officials worry the cutback is merely a first step. For instance, the French air force was hoping to start fielding a midlife update for the Mirage 2000D soon. That program has now been delayed and is not planned to emerge until 2017-18. One senior military official is concerned the program may never emerge.

Other programs that were expected to begin next year are the acquisition of 14 new air tankers and the start of acquisition of a Ceres signal intelligence satellite system.

The Mirage 2000D delay could lead to a capability gap after the retirement of the Mirage F1, with its Astac tactical electronic intelligence pod. The Astac pod was to transition to the Mirage 2000D at the time of the midlife upgrade, but now discussions are underway on whether the Rafale’s Spectra electronic warfare suite could be upgraded to take on the task. In either case, a capability gap will exist, the official says.

The new French spending plan calls for annual buys of 11 Rafales per year for both the navy and the air force. Next year’s deliveries should bring the fleet to 104 units handed over. Delivery of six more Reco NG reconnaissance pods for Rafale also are planned — the system is set to make its combat debut in Afghanistan next year.

The 2011 budget calls for spending of €30 billion, increasing by around €500 million in each of the two following years. Equipment spending is planned at around €16 billion, down from €17 billion last year. It is due to increase in 2012 to €16.8 billion and reach €17.4 billion in 2013.

Much of the focus of new orders in 2011 will be on upgrades and maintaining existing equipment. The spending plan calls for funding modernization of three C-135 tankers, made necessary in part by the delay in moving forward on the refueling aircraft acquisition. Two Falcon 50s will also be modified into maritime patrol aircraft and seven Cougar helicopters are also to be overhauled.

Next year should also see the first French delivery of a NH90 helicopter in the TTH transport configuration for the army, plus the delivery of four more NFH90 maritime helos — the first were handed over this year — which also are to become operational in 2011. Six Tiger attack helos also are due for delivery.

Other equipment highlights for 2011 include the redelivery of an upgraded C160 Gabriel signals intelligence aircraft and two upgraded E3 Awacs.

In the missile arena, 2011 should see the final ASMPA nuclear tactical missile handed over, as well as delivery of 70 MICA air-to-air weapons, two SAMP/T air- and missile defense systems, and 100 Aster 30 and 10 Aster 15 missiles.

France also is maintaining its military space activities, a focus area in recent years, despite the Ceres delay. An extra 60 Syracuse III terminals are to be delivered, and final funding will be provided for two new optical imaging satellites for the Musis program.

Industry also will benefit from €2 billion in stimulus money to be funded by a special bond issue. About €1.5 billion will go to support new civil aircraft and helicopter developments and the rest is for an Ariane 5 launch vehicle follow-on and new satellite developments.

[buglerbilly]

European Allies Are Not Living Up to Commitments on Defence Spending, NATO Official Says

16:27 GMT, November 15, 2010



As austerity measures start to bite across the Alliance, budget cuts are having an impact on defence spending by NATO members, says Frank Boland, director of force planning with NATO’s Defence Policy and Planning Directorate. Co-operation among states has the potential to bring much-needed efficiencies, but there are considerable political obstacles, he said.

Only five of the 28 allies spent the recommended 2 per cent of their gross domestic product on defence and security last year, he told the Alliance’s Parliamentary Assembly members of the Economics and Security Committee on Saturday, 13 November, convened in the Polish capital for its 2010 annual session.

At this rate, he noted Europe might become a “protectorate” of the United States, or even China for some countries, within the next 50 years, Boland said.

For the last 50 years, European allies “have been able to rely on US defence spending”, he said, but this State of affairs will likely expire within the next generation.

He said he was particularly concerned that spending levels might not rebound after the financial crisis, as slimmed-down security budgets are adopted.

As a member of the audience pointed out, the drop in military investment by some countries could be hard to reconcile with their obligations under the Alliance ’s article 5 on mutual defence.

NATO’s force planning process is designed to avoid just such a mismatch, Boland explained, and to ensure a fair sharing of the burden on different members’ resources.

During the debate which followed his presentation, several possible solutions were discussed. Common procurement for example, could introduce economies of sale to the procurement process. Also, some NATO countries have more expertise in dealing with suppliers than others, Boland said, and could benefit from the experience of their Allies.

Such co-ordination would also help ensure that industrial and research interests do not drive production and procurement of defence-related goods and services.

However, the very nature of military investment makes it politically difficult to share the relevant information, he conceded. He dismissed the suggestion that NATO headquarters in Brussels was considering a procurement advisory board, but pointed to the work of the NATO Maintenance and Supply Organization, or NAMSO.

Based in Luxembourg, NAMSO is available to provide expertise and recommendations to Alliance members and partner countries where necessary and appropriate, he said.

Regarding the suggestion from the floor that parliamentary delegations might observe other Allies’ procurement as a benchmarking exercise, Boland said that it was entirely within the remit of the parliaments concerned, but that he thought “it would produce interesting results”.

Budgets are suffering not only from a lack of co-operation among supposed allies, Boland said, but also from the changing nature of operations, especially “out of area”.

In Afghanistan, to take the most pertinent example, for every 10 active soldiers on patrol there are roughly 90 troops in supporting roles on base.

But adapting to the new requirements was bound to take time, Boland said. Defence spending tends to be committed five or six years ahead, so now was the time to start looking at future requirements.

[ADMk2]

That's rich. The US is trying to save $100b from it's defence budget... "Don't do as we do!"

[buglerbilly]

Italy Protects Defense Modernization Spend

Nov 19, 2010

By Andy Nativi andy.nativi@rid.it
GENOA

Italy is boosting defense modernization spending even as other elements of its defense budget suffer.

So far there are no signs the political turmoil in Italy, with the future of prime minister Silvio Berlusconi’s government in doubt, is threatening to undo the fact that military spending is being shielded from wider budget cuts.

For 2011, the defense ministry has submitted a request for €20.49 billion ($27.9 billion), an 0.6% increase from 2010, with the core defense budget of €14.3 billion up only 0.2%.

Complicating matters is that Rome is putting off tough decisions. Personnel costs continue to increase in the absence of the political will to make force cuts, up 0.9% year-on-year and outpacing the budget increase. Also left unscathed are major procurement programs, even though the defense ministry during the summer offered to forego buying 25 Eurofighter Typhoons (the Italian Tranche 3B allocation) and four frigates. Also put off for now is a broader review of the national defense policy and force structure.

Still, the new budget provides funding to launch some long-desired programs, including a search-and-rescue (SAR) and combat search-and-rescue helicopter (CSAR), as well as the development of a laser-based infrared countermeasures system.

Additionally, several procurement programs are safe because they are part of international cooperation, giving them protection in Italy. The defense ministry also continues to benefit from an outside infusion of funding from the economic development ministry to finance research and development projects, such as the Typhoon, most of the space programs, the procurement of navy and air force AW101 and air force AW-139 helicopters and the M-346 Master advanced jet trainer.

Overall, modernization spending should increase 8.4% on top of last year’s 10% increase.

The leading issue in 2011 costs relates to the Joint Strike Fighter. Outlays are ramping up as activity increases to establish the final assembly facility in at Cameri, including maintenance, repair and overhaul and upgrade functions, by 2014 for almost €800 million.

Italy is going to finish paying for its involvement in the development phase of the program in 2012, and has yet to make a decision on the number and type of F-35 it is going to procure (the target figure is 131 units). The U.K.’s decision to drop the F-35B short-takeoff-and-vertical-landing variant and other pressures building in the U.S. on the Stovl variant are a concern for Italy, though, since the country’s new carrier, the Cavour, has been sized for the F-35B and cannot accommodate other aircraft. The air force also wanted to use the F-35B as a replacement for its AMX fighter bombers.

The air force continues to fund the Typhoon fighter bomber program and is sustaining Tornado fleet modernization, since the type is likely to remain on duty longer than expected. Current plans call for concluding its modernization by 2015, at a total cost of €1.4 billion.

From a budgetary perspective, next year should also mark the end of spending on the much-delayed KC-767A tanker program, with the first two aircraft now expected to be delivered by year-end in a basic operational configuration. Two more will come later, after which the first two will be upgraded to the full, operational standard.

Rotary wing programs remain a priority, with the army continuing to fund procurement of 16 CH-47F helicopters to replace the army fleet of CH-47C, as well as starting a new round of AW-129 combat helicopter upgrades. Meanwhile, the air force is starting two programs with the procurement of AW-101 CSAR and AW-139 SAR helos. The NH-90 also remains a major budget item.

The budget also sustains army procurement of Textron AAI Shadow tactical unmanned aircraft.

On the weapons side, air force funding has been secured for the purchase of 250 AGM-88E Advanced Anti-Radiation Guided Missiles, and a first batch of Boeing Small-Diameter Bombs are also being purchased. Additional money will go to the IRIS-T IR short-range air-to-air missile purchase, to be completed by 2012, and development funds for the Meteor beyond visual range air-to-air missile have been set aside to complete development by 2013. Funding has also been secured for an Italian infrared countermeasures system, with an industrial development carried out between Elettronica and Elbit. According to military officials, the decision to develop a national solution stems from difficulties in getting export approval from the U.S. for its system for any application beyond the protection of the presidential VIP aircraft.

The air force also continues to fund the development of the theater ballistic missile defense Medium-Extended Air Defense System, with an intention to buy three fire units if the program survives continued budget uncertainties and political travails in the U.S. and Germany.

Space programs also are getting renewed support. Development of Sicral 2 and Athena-Fidus telecommunication satellites is safe, as is funding for two second-generation Cosmo Skymed (CSG) radar Earth observation satellites.

The “loser” in the 2011 budget exercise is the operations account, which will be cut 18% to €1.4 billion with severe implications for maintenance, spares and training. The government is trying to find money to pay for the overseas mission with a dedicated extra defense budget fund allocation, which is targeted at €750 million for the first few months of 2010. Italy is planning to reduce its involvement in peacekeeping missions in the Balkans and possibly in Lebanon, concentrating instead on Afghanistan, where force levels are peaking now at 4,000 soldiers and will remain there at least until summer 2011.

The lower house’s defense committee has approved the draft defense budget, but has asked the government to add around €320 million for the underfunded operations account.

[buglerbilly]

European Defense Ministers Meet to Discuss Military Effectiveness, Spending Cuts

(Source: Voice of America; issued December 9, 2010)

European defense ministers are meeting in Brussels to examine how to remain militarily effective, including sharing resources, at a time of fiscal austerity.

Less than a month ago, U.S. President Barack Obama and European leaders agreed to revamp the NATO defense alliance to meet new and daunting challenges in the 21st century. Obama announced the aims of the new, so-called 'strategic concept' during a NATO summit in Lisbon.

"We have reaffirmed the central premise of NATO - our Article 5 on commitment that an attack on one is an attack on all," said president Obama. "And to ensure this article has meaning, we agreed action in a third area, to modernize our conventional forces and develop the full range of military capabilities that we need to defend our nations."

But doing this takes money - at a time European countries are slashing their defense budgets, sometimes drastically. That's the dilemma European defense ministers are confronting as they meet in Brussels.

Tomas Valasek, director of foreign and defense policy at the London-based Center for European Reform, says Europe's defense cuts pose a big problem for the NATO alliance and Europe's own ability to defend itself.

"This is serious," said Valasek. "The reality is that all of the assumptions in the new strategic concept which NATO has just approved a few weeks ago in Lisbon depend on all these ideas being resourced."

Deeper defense collaboration among European countries may offer one option of saving money by pooling resources. In Brussels, European Union foreign policy chief Catherine Ashton is outlining ways EU countries can share military resources.

France and Britain paved the way last month, striking a deal to collaborate on nuclear weapons research, aircraft carriers and training programs, among other areas.

"There's simply no need for the European members of NATO to have all these duplicating commands, educational systems, exercise ranges," added Valasek. "There's a lot more we can do together and a lot of money to be saved by abolishing duplication in Europe."

Valasek says similar military cooperation is possible among Nordic and Benelux countries. But Valasek, for one, does not expect these regional initiatives to expand to a European-wide project - since military defense is ultimately a very politically sensitive issue. (ends)

European Defence Agency Seeking Savings Through Pooling and Sharing

(Source: European Defence Agency; issued Dec. 9, 2010)

BRUSSELS --- European Defence Ministers have agreed that the Agency’s activities on Pooling and Sharing of national military capabilities should be enhanced. In addition to successful existing projects – such as improving helicopters availability, air transport, third party logistics support and airworthiness – more pooling and sharing opportunities exist in areas like satellite communications, medical support and naval logistics. In many cases pooling and sharing also offers opportunities for civil-military dual-use.

“The Agency has quickly reacted to the needs of European Defence Ministers, who are looking for opportunities to work closely together in order to improve capabilities while budgets are under pressure. Pooling and sharing offers potential for savings, while increasing interoperable capacities”, said Catherine Ashton, High Representative for Foreign Affairs and Security Policy, Vice-President of the European Commission and Head of the European Defence Agency.

Defence Ministers also discussed the impact of the Single European Sky initiative of the European Commission for military aviation. The Single European Sky’s objective is to replace the currently fragmented airspace over Europe by one air traffic management system, thereby increasing capacity, reducing pollution and improving safety and security. The SES Air Traffic Management Research (SESAR) Joint Undertaking is addressing the technological challenges. Ministers have tasked the Agency to engage with the SESAR Joint Undertaking in order to identify important financial and operational risks as wells as emerging opportunities for the defence community.

Following new opportunities under the Lisbon Treaty regarding Defence Research at Union level, Ministers called for a constructive dialogue in the coming months between the European Commission, the European Parliament, the Agency and the participating Member States on the preparation of the 8th Framework Programme for investment in technology areas of common interest at the European Union level.

Ministers were informed on the progress made with the project to deploy a field laboratory for forensic research of road-side bombs explosions. With France as lead-nation, supported by several other Member States, the mobile laboratory will be deployed to Afghanistan by mid-2011. Technical preparations, procurement and planning of the laboratory’s manning are all on track.

“This is a concrete contribution to urgent operational needs, as road-side bombs are endangering the lives of soldiers and civilians day-after-day. It is a direct European contribution to the Alliance’s operation in Afghanistan”, Acting Chief Executive, Adam Sowa, said.

The Steering Board approved the Agency’s Work Programme 2011. The Agency’s budget will be EUR 30.5 million, as decided by the Foreign Affairs Council in Defence Ministers formation.

Ministers were informed on the results of the Agency’s collection of 2009 defence data and on the assessment of the collective benchmarks for defence R&T and equipment procurement. A dedicated booklet has been released.

The Steering Board approved that the Agency can start the book-building process for the new Joint Investment Programme (JIP) on protection against Chemical, Biological, Radiological and Nuclear (CBRN) threats, with the nations willing to participate indicating their financial contributions. The JIP-CBRN is the first EDA programme in the context of the European Framework Cooperation, which aims at systematic synchronisation of research investment by the Agency, the European Commission and the European Space Agency.

Defence Ministers took stock of the progress made in the Agency’s work on the Level Playing Field. They reaffirmed that the LPF initiative is a strategic and long-term exercise, which in full respect of the specificities of defence aims at contributing to the creation of a truly European Defence Equipment Market, whilst focusing on strengthening the European Defence Technological and Industrial Base. The Agency will continue its work to develop a common understanding of those issues which may hamper the establishment of a Level Playing Field, based on an agreed categorisation of issues as a first step towards prioritisation.

Furthermore, the Ministerial Steering Board tasked the Agency to analyse defence-related aspects of the EU Radio Spectrum Policy Programme (RSPP), recognising that this programme will have medium to long term operational and cost implications on the use of spectrum by the military. Radio frequencies are of crucial importance for EU crisis management operations. The Agency will develop recommendations regarding defence issues in order to support the participating Member States’ interests.

During the Steering Board meeting Defence Ministers of Belgium, Finland, France, Germany, Italy, the Netherlands, Poland, Portugal, Spain and Sweden signed the programme arrangement for Unmanned Maritime Systems, a new major EDA R&T programme of more than EUR 50 million for mine counter measures and other naval applications. Norway also contributes to the UMS programme.

The Polish Defence Minister signed a Letter of Intent to participate in the Multinational Space-based Imaging System (MUSIS) project, joining Belgium, France, Germany, Greece, Italy and Spain.

The European Defence Agency (EDA) was established by the Council on 12 July 2004. It is designed “to support the Council and the Member States in their effort to improve European defence capabilities in the field of crisis management and to sustain the CSDP as it stands now and develops in the future”.

The EDA is an Agency of the European Union. EU High Representative for Foreign Affairs and Security Policy Catherine Ashton is Head of the Agency, chairwoman of the Steering Board, which acts under the Council’s authority and within the framework of guidelines issued by the Council.

-ends-

[buglerbilly]

NATO Task Force to Seek Innovative Efficiencies

(Source: U.S Department of Defense; issued March 16, 2011)

WASHINGTON --- A new task force NATO’s defense ministers agreed to form will explore “out of the box” concepts for improving efficiency while striving to build capabilities in the face of shrinking defense budgets, the alliance’s supreme allied commander for transformation said today.

In a meeting last week in Brussels, Belgium, Defense Secretary Robert M. Gates and his NATO counterparts endorsed the new task force to take a fresh look at the alliance’s capabilities-boosting initiatives, Gen. Stephane Abrial of the French air force told reporters.

“The objective is to first identify what is existing as far as multinational cooperation is concerned, identify what could be possible, and think new ideas [and] innovative ways for capability development,” he said.

U.S. Navy Vice Adm. Carol M. Pottenger, Allied Transformation Command’s deputy chief of staff for capability development, will lead the review, to be conducted by a mix of military and civilian representatives from across NATO.

Abrial said he expects the review will examine NATO doctrine, organizations, procurement, training, operations and maintenance, logistics, and battlefield medicine.

The task force members will have six months to formulate their ideas.

“The objective is a report in September for the [defense] ministers to consider in October, and then make decisions, either NATO as a whole or groups of nations inside NATO,” Abrial explained.

Though the global economic crisis has affected alliance nations’ defense budgets, Abrial said, every NATO nation has made clear it doesn’t want to “let the financial crisis turn into a security crisis.” That requires redoubling efforts to become more effective and more efficient, he added.

“With reduced budgets [and] reduced manpower, we need to be able to do better with less in the future,” he said. “While looking for new solutions, innovative solutions [and] multinational approaches, [we are] making sure that we ... make the best possible use of every dollar, every pound, every euro that our governments spend on defense.”

Abrial cited innovative defense solutions already at work within NATO, the European Union or the European Defense Agency that the task force is likely to consider. Sweden, Norway, Finland and Denmark have a successful defense cooperation arrangement under the auspices of the Nordic Council. The Netherlands, Belgium, Norway and Denmark share part of the acquisition costs as well as operation and maintenance of their F-16 fighter jet fleets. Luxembourg has developed a maritime patrol capability to support NATO missions by leasing sensor-equipped civilian propeller aircraft.

Another far more revolutionary, and potentially sensitive, concept involves capability-sharing. In a nutshell, this might mean one NATO nation agrees to provide all of capability “X” for itself and one or more partner nations. Meanwhile, another nation that receives capability “X” from the first nation provides all of the capability “Y,” and another provides all of the capability “Z.”

Abrial acknowledged that some nations may be highly averse to giving up their own defense capabilities and relying on another nation to provide it. Such collaboration would require clear understanding and communication to work, he said.

While such sweeping recommendations aren’t likely to be adopted in the near term, Abrial said, he’s encouraging the task force to offer the broadest range of new approaches possible. “All aspects are on the table today,” he said.

What’s most important, he emphasized, is that despite budget cuts, the alliance continues to improve its capabilities so it’s ready to stand up to whatever threat or challenge comes its way.

“We are making sure [the] forces of NATO nations are ready to face any kind of situation today, tomorrow and the day after,” Abrial said. “What we see around us today shows the absolute necessity to be ready for everything.”

-ends-

[buglerbilly]

Thousands of Defence Ministry Jobs to Go, But JSF 'Testing' Goes Ahead

(Source: Dutch News; published April 7, 2011)

Cutting the Cougars? They haven't been in service for all that many years! BIG cuts...........again! The airforce now has approx half the fighters it had 5-10 years ago

Over 5,000 military service personnel and defence ministry civil servants are facing compulsory redundancies as the government decides on Friday where to make savings of EUR 1bn in its defence budget.

The job losses will affect all ranks in the defence ministry, according to government sources quoted in the Volkskrant.

Defence minister Hans Hillen also plans to scrap tanks and Cougar helicopters, to cut the 87 F-16 fighter jets by around a third and to sell off a number of naval vessels.

The controversial purchase of a second JSF fighter jet for EUR 100m will, however, go ahead to protect the participation of Dutch firms in its development and production, says the Volkskrant.

-ends-

[buglerbilly]

More detail on this.........MAJOR cuts!

Dutch Army to Sell All Leopards and Cougars

(Source: Dutch News; published April 8, 2011)

THE HAGUE --- The cabinet is virtually certain to announce enormous cutbacks at defence today. According to a leaked draft version of the measures, 12,000 jobs and complete army units will disappear.

Defence Minister Hans Hillen already announced permanent budget cuts of 1 billion euros per year earlier. The cabinet already considered the far-reaching cutbacks last week. The decision was however postponed and will likely be made today.

Public broadcaster NOS has already obtained the plans. It says that all 60 Leopard tanks will be divested. The 17 Cougar helicopters are also to go, as well as four of the 10 mine-sweepers. At least one-third of the 86 F-16s will also be sold.

Some 12,300 jobs will disappear. Around 6,000 soldiers will face forced redundancies. NOS has not yet discovered where the blows will actually fall.

The unions are furious and derisive. Bigger missions such as that in Uruzgan - four years, 2,000 personnel - will no longer be possible in the future, says ACOM chairman Kleian. "The Netherlands will have a Belgian armed forces. Flying now and then. And if there is money and petrol, then we will do a trick."

According to defence sources, the Apache helicopters and Bushmaster heavy armoured vehicles will take over the tasks of the Leopards.

Bushies replacing Leopard 2's ...............:doh

The Netherlands can also step up European partnership, for example with Germany. But for this, there appears to be more willingness within the Netherlands than outside it.

The Netherlands and Germany do already have a combined army unit. Allies are however hesitant about awarding full air force or army tasks to a specific country.

One in seven of the military must fear for their jobs. Defence currently employs nearly 69,000 people, including 48,300 military. Hillen will sharply prune the number of officers. Generals will also not escape the cutbacks.

A sour detail for the military who are virtually on the street is that the cabinet will likely also approve the purchase of a second F35 JSF test aircraft today. This US fighter aircraft is to replace the F-16s. The investment will cost many billions. (ends)

[buglerbilly]

DATE:11/04/11

SOURCE:Flight International

Dutch air force hit by spending cuts

By Anno Gravemaker

The COUGARS might make a better buy for the Brits rather than go thru that slightly barmy Update of the PUMA's...........

Dutch defence minister Hans Hillen is to make dramatic changes to the nation's armed forces structure as part of a process to reduce its annual defence expenditure by €770 million ($1.1 billion).

Outlined on 8 April, the package of cross-service cuts includes the withdrawal from operational use of the Royal Netherlands Air Force's Eurocopter AS352U2 Cougar helicopters, and a further reduction in the size of its fleet of Lockheed Martin F-16 fighters.

All but three of the air force's 17 Cougars will be withdrawn from use by 9 May and offered for sale, with the remainder and four 300 Sqn crews to be retained until 2012, when NH Industries NH90s will take over their medical evacuation responsibilities. The savings should total almost €50 million, the defence ministry says.

Hillen says that one of the air force's five operational F-16 squadrons will also be disbanded, reducing the frontline strength of the aircraft to 68. This is expected to save around €40 million and 19 surplus fighters will be offered for sale.

A delayed project to introduce a third McDonnell Douglas DC-10 in a passenger/freighter configuration has been axed, after the modification effort encountered numerous setbacks. It will be offered for sale once work has been completed and airworthiness certification is secured.

The reduction in expected transport capacity will be met by using hours on Boeing C-17s flown by NATO's Heavy Airlift Wing, and with access to foreign aircraft arranged via the European Air Transport Centre in Eindhoven.

Elsewhere, one of the air force's current four operational Lockheed Patriot air defence squadrons will be removed, with the extra equipment to be held in reserve.

But despite the cuts, an order will go ahead this year for a planned second Lockheed F-35 to safeguard the Netherlands' participation in the programme's operational test and evaluation phase. A final decision on whether to acquire the type as a replacement for the air force's F-16s will not be made before 2014. The extra cost of running the current fleet longer than expected will be around €300 million.

Hillen has also revealed the Netherlands' intention to purchase a medium-altitude, long-endurance unmanned aircraft system. Worth more than €100 million, the investment will lead to the acquisition of four air vehicles for use on international operations. The type of aircraft involved is not yet known.

[buglerbilly]

More detail on these cuts..............

Defence Organisation Hit Hard by Cutbacks

(Source: Netherlands Ministry of Defence; issued April 15, 2011)

The Defence organisation has been hit hard by the cutbacks announced today by Minister Hans Hillen. The following is a brief outline of the key measures:

Cutbacks amounting to EUR 617.5 million will be made in administration and management, support and operational logistics. That amounts to 64 percent of the total amount. The staffs will be reduced by 30 percent, and administrative and management relations and processes will be simplified. The number of top-level positions will be reduced from 119 to 80. One thousand civilian service cars will go, and VIP transport will be scaled down.

The Royal Netherlands Navy will reduce the number of minehunters from 10 to 6. Two of its four new ocean-going patrol vessels will not be taken into service. One of the two supply ships will be phased out. HNLMS Zuiderkruis will be taken out of service at the end of 2011, after the planned deployment as part of the EU operation Atalanta. HNLMS Amsterdam will remain in service until 2014 and will be replaced by the Joint Supply Ship.

Two tank battalions of the Royal Netherlands Army will be disbanded. In addition, a reduced number of self-propelled howitzers will be brought together with the 120mm mortars under a single field artillery battalion, and the construction engineers capability and the armoured engineers capability will be reduced, as will air defence capabilities and the number of Medium-Range Antitank systems on Fennek vehicles. The maintenance capability will also be decreased. Personnel reductions at the headquarters of the German-Netherlands Corps will be agreed with Germany.

The Royal Netherlands Air Force will reduce its number of F-16s from 87 to 68. The Cougar transport helicopters will be phased out and the third DC-10 will not be taken into service. The air force will also disband two Ground Installation Defence platoons and one of the four Patriot batteries will be taken out of service.

The Royal Netherlands Marechaussee will cancel the purchase of the vessel intended for use in the Zeeland waters. As a result of the reduction of the armed forces, the RNLM police tasks for the armed forces will also be reduced.

Important dates

On Monday 9 May, in preparation for the reorganisation process, most of the operational units and systems which are being discontinued will be deactivated or taken out of service.

In July, a detailed plan will be produced regarding the reorganisation and the reduction of the administration of the organisation (particularly the Central Staff and the staffs of the other elements of the Defence organisation). By then the Strategic Infrastructure Plan should be completed, detailing which locations will remain in use and which will be closed. Lastly, more information will become available on the maximum number of personnel in various ranks, and their distribution in the organisation, so that it will become clear what room there is for throughflow and how experience will be retained and guaranteed for the future.

Cause

The measures are the result of the worldwide financial crisis. The government is having to reduce spending by EUR 18 billion, EUR 635 million of which must be saved by the Ministry of Defence. In addition, the Defence organisation must cut back EUR175 million, and another EUR 150 million in the longer term, in order for the Defence budget to become financially sound again. Furthermore, financial room is needed to allow for a number of innovations.

-ends-

[buglerbilly]

German Document Hints at Decreased Abilities

By ALBRECHT MÜLLER

Published: 21 Apr 2011 18:16

BONN, Germany - The German military may lose some capabilities needed for expeditionary missions, according to a leaked defense department document.

The confidential paper lists possible consequences of the Bundeswehr's restructuring and planned budget cut of 8.3 billion euros ($12 billion) through 2015, the German newspaper Bild reported April 20.

"The German military contribution neither meets Germany's role in the alliance nor does it fulfill national security interests," the document says. "These limitations will not be reversible in the medium term."

Department officials declined to comment, saying only that there are several decisions coming in May.

The document says that current financial plans will require the Bundeswehr to shrink to 158,000 soldiers, not the planned 185,000. That would disrupt personnel structures as early as next year, and could stretch standard deployments.

The cut might also require retiring more weapons than planned, eroding Germany's ability to help out with international missions.

The document said the cuts might also imperil Germany's plans to be able to keep up to 10,000 soldiers deployed abroad on various missions, perhaps limiting their participation to one such operation. The Navy's operations against piracy would also be limited.

The cuts might also destroy various capabilities in homeland security that would be costly and hard to restore, the document said.

The bottom line is that the cuts might threaten Germany's international influence and even force it to relinquish important NATO posts to other countries.

[buglerbilly]

Netherlands Seeks Defence Partnership with UK, Germany

(Source: Dutch News; issued May 5, 2011)

THE HAGUE --- Defence Minister Hans Hillen is looking at opportunities to enter into more military cooperation with allies. He spoke about this in London on Tuesday with his UK counterpart Liam Fox. Next week, he is going to Germany.

These are initial orientational talks where no decisions will be made, his spokesman said. But London and The Hague did sign an agreement on the extension of the partnership between UK and Dutch marines, the UK/NL Amphibious Force.

As in the Netherlands, the UK armed forces have to make big cutbacks in the coming years. Partnership between the two countries could yield financial benefits.

Hillen also discussed the situation in Afghanistan, Libya and by Somalia with Fox. He also visited the maritime headquarters of NATO and the EU in Northwood, where about 15 Dutch are working.

-ends-

[buglerbilly]

Army Slim-Down Begins

(Source: Radio Netherlands Worldwide; issued May 9, 2011)

From now on, the Dutch armed forces will have to make do without tanks and with fewer fighter jets, helicopters and mine hunters. Some of the military equipment on the chopping block will be decommissioned on Monday; the first step in a radical reorganisation announced by Defence Minister Hans Hillen last month.

Armed forces commander General Peter van Uhm will attend the decommissioning of 14 Cougar transport helicopters at the Gilze-Rijen airforce base. Elsewhere, 60 Leopard tanks, 19 F-16 fighter jets and four mine hunters will be put into long-term storage.

The defence ministry promises to try to find suitable positions for the hundreds of personnel who are now out of a job because their units have been scrapped.

Minister Hillen plans to make structural budget cuts of one billion euros in the next four years. Nearly 12,000 out of a total of 69,000 staff members will be made redundant, with about 6,000 facing involuntary dismissal.

-ends-

[buglerbilly]

Norway Seeks $1.2B for Fighter, Missile Projects

By GERARD O'DWYER

Published: 12 May 2011 12:14

HELSINKI - The Norwegian government has asked the Storting, the national parliament, to approve $1.2 billion in capital funding to cover four military projects, the two biggest of which are acquisition of four F-35 Lightning 11 trainer aircraft and phase-2 financing for the Joint Strike Missile (JSM) project.

The F-35 trainer procurement project carries a budget of $873 million, with delivery to the Norwegian Air Force's pilot-training wing due to take place in 2016, two years ahead of the main delivery of the U.S. multirole combat aircraft. The $873 million includes logistical support and operation costs in the plane's initial years.

The acquisition of the four trainer jets will ensure that instructors are ready when the main F-35 deliveries begin in 2018, said Defense Minister Grete Faremo.

"It is also important that we maintain a satisfactory operational combat aircraft capacity in the transition phase between the F-16 and F-35," Faremo said.

The government intends to present a total picture of the procurement program, including costs, number of aircraft to be acquired, location of aircraft, industrial development expectations, financing plans and authorization for contract negotiations, to the Storting in the first half of 2012, Faremo said.

The government has sought budgetary approval of $187 million to cover phase-2 development costs on the JSM program. Norway's investment is based on the rationale that the JSM is the only weapon in development that meets the operational requirements for a long-range missile with land and sea capability that can be carried inside the F-35.

"The JSM is important both to satisfy key operational requirements, while the development of the missile can open significant industrial opportunities for Norway. The potential for an industrial venture is present," Faremo said.

The overall financial framework for projects submitted for approval also includes funding to construct new Border Guard bases and stations in Svanvik and Storskog; $49 million has been budgeted for this project.

Elsewhere, $27 million in new funding is being sought to construct housing in Jorstadmoen for the Norwegian armed forces' core information technology and communications units.