Military Technology 04/2021

industry mainly behaves like a monopsony, i.e., an economic model with states as sole customers. The main industry role is to be a forge for states’ war requirements. But for countries at peace for decades, it is not so simple. Domestic demand is limited and fails to consume the entire production capacity. Therefore, European defence industries have become increas- ingly export-oriented. Yet the ability to design and build technologically advanced armaments cannot be improvised: it takes decades to develop. It is impossible to ‘close and reopen’ the entire sector only when in war- time. Moreover, the defence industry plays a key role in technological ad- vances, innovation, and employment. This is especially true for so-called ‘statist’ nations, such as Italy, France or Spain, where private initiative is limited and the role of public investment very extensive. Even nations possessing large amounts of private capital, such as Germany, do not avoid investing in a highly profitable sector such as defence. To sum up, Europe’s defence industries today feature overcapacity and limited do- mestic demand. All seek to remain economically viable through exports, regionally and globally, without losing capabilities acquired over decades in studies, research, production, and frequent financial bloodbaths. When a European nation seeks a weapon system, it publishes a call for tenders that is theoretically public. In practice, most procurement systems are designed to favour domestic industry as much as possible. When it comes to European requirements, it is therefore difficult to find a balance. Often, consortia bring everyone on board under the ‘fair return’ principle – despite being economically inefficient and disadvantageous to The establishment of the European Defence Fund, a fund dedicated to the continent’s defence industry, has sparked debate on the path to consolidation. However, the fact that European countries still have different procurement politics seems to be underestimated in EU planning . Principal Dynmaics The Western approach to military operations is largely based on estab- lishing a technological edge over the enemy, rather than on numbers. This requires an indigenous, independent industry. Europe’s defence indus- try, at the national level, offers excess capacity and is simultaneously too small to compete effectively globally. How is this possible? The defence Based in Paris, Marco Giulio Barone is a political-military analyst and is a regular contributor to MilTech . Marco Giulio Barone European Procurement – Politics and Policies 54 · MT 4/2021 Feature g The French FREMM-class LANGUEDOC frigate under construction at the Lorient shipyard. Despite European collaboration, French industry continues to largely apply the concept of national autonomy. (Photo: Naval Group) Thierry Breton, European Commissioner for the Internal Market, also responsible for DG Defence Industry and Space. The rules on the use of European funds should encourage – albeit indirectly - the harmonisation of procurement systems. (Photo: European Parliament)