Expert Commentary

German Defense Industry Gearing Up

Stephen F. Szabo
Senior Fellow, American Institute for Contemporary German Studies

Germany is emerging as a major defense player in Europe. With the UK leaving the EU, Germany and France are now leading Europe’s efforts to secure the continent. The Cipher Brief’s Kaitlin Lavinder talked with Stephen Szabo, a senior fellow at the American Institute for Contemporary German Studies, about Franco-German defense coordination and Germany’s new heightened role in European defense.

The Cipher Brief: At this year’s Aspen security conference, German Ambassador to the U.S. Peter Wittig talked about how Europe can get a lot more bang for its buck if it synchronizes its defenses in support of NATO, and he also mentioned that Germany and France recently decided that common defense procurement is the way to go. Are there any concrete plans or examples of recent defense procurements between Germany and France?

Stephen Szabo: Last month, Germany and France unveiled plans to develop a European fighter jet, although they haven’t decided on joint procurement yet.

TCB: And would that be the first of this kind of agreement between these two countries?

Szabo: I’m not sure about this specific kind of Franco-German project, but the Europeans have the Eurofighter, for example. The Eurofighter aircraft began with a multinational collaboration program between France, Germany, the UK, Italy, and Spain and was designed and manufactured by a consortium of European defense companies.

TCB: So is this idea not really new, but rather it’s being discussed more now because of the Trump administration and concerns over Trump’s policy toward Europe and NATO?

Szabo: Exactly. The Europeans have been talking about this for 20 years. They set up a common procurement agency, the European Defence Agency, in Brussels in 2004 to supposedly enhance European defense because of the reasons that Ambassador Wittig pointed out: they’re wasting their money on duplication of assets. So they’ve been talking about this for a long time, but it never goes very far, partly because people want to protect their own defense industries to the extent that they can, so they try to buy German or buy French, for example. And that makes it more difficult to get common procurement.

A couple years back there was a discussion about having a merger between Britain’s BAE Systems and Airbus parent EADS, but that fell apart because German Chancellor Angela Merkel basically vetoed it because she was afraid of losing jobs in Germany if they went through with this. The big player has been the UK; BAE is still the biggest player by far because they are one of the few European contractors that can do business with the U.S. and with the Pentagon. That has hindered a joint European procurement effort because the American market is much bigger than the European market on defense. That might change a little bit if people actually start spending more on defense; but I think the problem has been that the biggest player is the UK. With Brexit, the UK’s role in European security is now questionable, which will have implications for European defense.

Another issue with the Germans is that they’re losing out on technology and technological spinoffs that come with developing your own systems. They’re way behind the U.S. in a lot of respects. The Transatlantic Academy just came out with a report, where we had an idea in there that the Germans ought to create a DARPA within the Germany defense ministry. We were trying to make the case that there is a lot of positive development and spinoffs from defense spending; it’s not a zero-sum game. You get not only technological spinoffs, but also you create jobs.

This is an old story that has not gone very far over the many years the Europeans have talked about it. Of course, there are different factors now that are new. I already mentioned Brexit. Another new factor is Russia and the shock with Russia’s invasion of Ukraine. And the final new factor is the election of President Donald Trump in the United States. With these three developments, the Europeans are talking more seriously now about this.

TCB: Do you think that this confluence of factors – the UK leaving the EU, Russian aggression, Trump’s election – is going to provide the necessary impetus to actually move procurement and other defense cooperation forward?

Szabo: It should, but it probably won’t. Recently, the head of the French defense forces resigned because President Macron made substantial cuts in the defense budget in France, which is of course the biggest European military player now with the UK leaving the EU. The Germans are talking about doing more, but they are so far behind in terms of equipment and capabilities that it’ll take them a decade, even if they’re serious about this. And I don’t see a lot of support for this among either leaders or publics in Europe.

You’re right, this is a new strategic situation. But the kinds of security issues the Europeans are looking at go beyond Russia, which is still not a direct threat to core Europe, neither Germany nor France nor Italy. The big issue for Europe is terrorism and securing the borders. There we’re already seeing the Europeans trying to do more and reinforce their borders. In the Mediterranean, for example, they’re trying to intercept boats that carry migrants coming over from Libya. That’s where the EU does have to play a role, because NATO is not really equipped to do that, and even though NATO has tried to do a little bit in that area, they’re not the organization for the job. So in that area, we’ll see more action, but it’s not the kind of big ticket defense spending that people talk about.

Cyber is another big area. The Germans are investing a lot more in cyber now, and the Europeans are investing a lot more in cyber capabilities as well.

TCB: How much does Germany’s history still play into its ability or inability to take more of a leading role on defense?

Szabo: If you go to a place like Poland or Estonia and ask if they’re worried about the Germans becoming a stronger military power, they will say no; they’re happy that the Germans are now becoming a more powerful defense force. In Lithuania, the Germans are part of an enhanced forward presence force that NATO put together for the Baltics. So externally, it’s not a big issue.

Inside of Germany, it’s an issue the Germans like to bring up because a substantial portion of the public does not want to spend more on defense or do more militarily; they don’t trust the military, and so they use that as one argument not to do more.

TCB: When you say “they” inside of Germany, do you mean “they” the policy-makers and people working in defense, or “they” the general population?

Szabo: Both, though there has been a slight shift in public opinion in the last two years toward a readiness for more defense spending. The polls show close to a plurality that’s wiling to at least think about more defense spending. But there’s still an awful lot of resistance to it. The Social Democratic leadership has now made this a campaign issue, claiming the increases are being made to please Trump.

TCB: The defense conversation in Europe often revolves around Germany, France, and the UK. Discounting the UK, since it’s likely soon leaving the EU, are there other countries beyond Germany and France that we should be looking at to take more of a leading role in defense?

Szabo: Absolutely. Poland is number one because of the eastern front issues. Poland is spending substantial amounts of money on defense. They want to be a defense player, but they want to do that within NATO and they don’t trust the EU on Russia and on providing security – they still rely on the U.S. for defense against Russia. This is what complicates things. The Poles would definitely be a player in this, but they want to go the NATO route rather than the EU route, and that’s a big issue.

There are other countries that can play niche roles, like the Netherlands and Spain. But of course there are different strategic perspectives with the Spanish, the Italians, and the French to some extent, looking south at the migration problem, and with the Germans, the Poles, and the Baltic states looking more east toward Russia. So that’s another problem.

The different factor here is that the Scandinavians are now much more constricted by Russia. The Swedes in particular, the Finns, to some extent the Norwegians, and the Danes are all concerned about the Baltic area now – and they see NATO as the most reliable deterrent, not the EU.

TCB: Are there any signs of closer defense cooperation between Germany and Poland either within NATO or bilaterally?

Szabo: The fact that the Germans have put this battalion in Lithuania has been welcomed by the Poles. The Germans have also been doing some exercises with NATO in Poland, so there’s been limited defense cooperation there. There is a political problem between an increasingly conservative and authoritarian Polish government and liberal democratic Germany, but I still think we should expect to see more German-Polish military cooperation – as long as the Poles think the U.S. will remain engaged with them, even as Germany increases its engagement.

TCB: Is there anything else you would like to add?

Szabo: There are certain defense issues that the EU is very equipped to deal with: counterterrorism and cooperation between intelligence agencies and police agencies within Europe and on border controls. But on Russia and broader issues, they still need the United States.

Also, there’s better infrastructure at this point for defense cooperation within NATO than within the EU. You can create coalitions within NATO that are more effective than EU coalitions because they have better capabilities. You can then plug these into than the EU, which has been limited to small operations in Africa or little crisis reaction operations. NATO has been looked at as an American dominated organization, but actually the Europeans could do a lot with it if they want to.

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The Author is Stephen F. Szabo

Dr. Stephen F. Szabo is currently a Senior Fellow at the American Institute for Contemporary German Studies and a Professorial Lecturer in European Studies at SAIS. He served as the Executive Director of the Transatlantic Academy and was Interim Dean and Associate Dean for Academic Affairs and taught European Studies at SAIS, Johns Hopkins University. He has published widely on European and German politics and foreign policies, including most recently, Germany, Russia and the Rise of... Read More

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