A new era for European defence

  • European defence spending will grow by almost 5% this year, and will surpass $300 billion a year by 2021.
  • France has pledged a 40% increase in defence spending, from €34,2 billion in 2018 to €50 billion in 2025, for a total increase of €16 billion, taking its defence budget to the NATO goal of 2% of GDP (a new trend across Europe). This marks a major shift after many years of belt-tightening, and includes big increases in spending on aircraft maintenance, armoured vehicles, next-generation nuclear submarines and airborne nuclear missiles
  • There is an urgent need for a stronger industrial & technological base for defence equipment in the fragmented European market, especially at tier 3 & 4 levels. Customers’ (OEMs’) needs are evolving quickly, and in many cases contractors are struggling to keep up.
  • Deals are being used to ramp up production rates, improve efficiencies and technological competencies, and to take advantage of what promises to be a more favourable growth environment moving forward.

 

Kilian de Gourcuff
Kilian de Gourcuff
Partner
France