“The war economy” announced by Emmanuel Macron in June is being put into operation to face a harsh conflict that would involve the French armies. During two seminars that took place at the beginning of September and mid-November, the Minister of the Armed Forces, Sébastien Lecornu, the Chief of the Defense Staff and those of the three armies (land, air/space and maritime) expressed the industrial needs represented by Gican (naval), Gifas (aerospace) and Gicat (land) and the main companies in the sector.
This war economy is “the ability to have a defense industry capable of covering the needs that we would have in terms of weapons, ammunition and maintenance in operational conditions in the event of a major conflict”, specifies the office of the Minister of Arms Forces. .
“Relocate production
The equation remains complex: rebuild stocks by increasing both production rates and production capacities. This group has listed a top 12 priority equipment whose contents have not been disclosed, but which would mainly be related to ground and especially ammunition (small and large calibers), howitzers and surface-to-air missiles.
According to the entourage of the Minister of the Armed Forces, decisions have already been made with orders already made and validated, sometimes in a few days or a few weeks. This is the case with Caesar weapons taken from stocks to give to Ukraine.
The challenge is mainly based on the reconstitution of ammunition stocks on the military side, but also, on the industrial side, to have the necessary spare parts for production and maintenance. It is even planned to “relocate the production of certain components”, reveals the minister’s environment.
Priority to French orders
Semiconductors, which come from Asia, could also be affected depending on the models and needs, due to this relocation based on the European initiative to produce them in Europe or to rely on French manufacturers. “The Grenoble plate could be put to good use.” This mini Silicon Valley in Isère is home to companies such as STMicroelectronics, Soitec, Tonic, Aledia or Lynred. In July, Emmanuel Macron announced the Electronics 2030 program to support the industry.
Finally, to allow manufacturers to start production without waiting for the DGA to notify the order, letters of contract will be issued. These preliminary contracts will be for the companies of the BITD (defense industrial and technological base) as a purchase promise.
Is it planned to give priority to orders placed by France? At this point, “everything depends on the context and our situation or that of our partners”, but the ministry’s cabinet recalls the fundamental role of export contracts for the defense industry.
“War Finance”
The budget remains, now called “war financing.” To replenish stocks, invest and modernize the means of production, the current (2019-2025) or future (2024/2030) LPM budget may not be enough.
The discussions began with Bercy and, for the moment, the accounts are not good. The Ministry of Finance would have 375,000 million euros for the next LPM when the military estimates that below 420 or 430,000 million they will not be able to face the challenges.
Various avenues of financing are explored in the banking markets, investment funds and even savings that would allow the general public to invest in military industries. “We are working on this point with Bercy,” said Sébastien Lecornu’s entourage.
Source: BFM TV
