NATO's rearmament plans could generate an annual market of €45 billion over the next decade in France and create more than 500,000 jobs. But the country's industrial capacity is currently insufficient to meet this increased demand. RFI spoke to Romain Lucazeaux of the Caisse des Dépôts, the investment arm of the French State, and asked: is France ready for rearmament?
The question is worrying companies across France’s Defence Industrial and Technological Base (BITD), the network that designs, builds and maintains military equipment.
With increased demand stemming from NATO's pledge to hike defence spending to 5 percent of members' GDP and the European Union's ReArm Europe Plan, pressure is growing on producers to respond quickly. Russia’s war in Ukraine has only added urgency.
At stake is France’s position as the world’s second largest arms exporter. But factories are already running at over 90 percent capacity.
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In June, the Caisse des Dépôts published a report warning that France's current system may not be able to deliver.
Lucazeaux, who wrote the report, said the country is at a turning point.
"The challenge for France's [BITD] is to move from a small-scale model tailored to the needs of France, which is a small-scale major power, to one capable of serving the needs of our NATO partners – particularly the German and Polish markets," he told RFI.
"This is an opportunity not to be missed, and it requires ramping up capacity, taking risks – but also the ability to internationalise and pursue commercial strategies.
"This costs money and requires skills that French players do not necessarily have, particularly small and medium-sized enterprises [SMEs] and certain mid-cap companies."
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Regional strategy
The key to success, insists Lucazeaux, lies in diversifying to make full use of France's regional production capabilities.
"There is a geography of defence that dates back to the 19th century, which means that companies are located mainly in the west and south – far from the German border. Except that our manufacturing capabilities are not necessarily there," he explains.
"The question is whether we will have enough engineers and senior technicians, and whether we have the right collaborative research and development programmes, in which companies partner with a university or training centre to build solutions, move forward together and hunt as a pack.
He added: "These are not national solutions, but territorial ones. The risk is that we will have the funding, the best technology, and an army of employees who value production, but we will not find the employees and projects that enable these ecosystems to perform well."
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Increased production is an achievable goal, however, provided France focuses on certain key sectors such as advanced military equipment, said Lucazeaux.
"There are two levels of exports. First, you have the platform-based systems – for example, selling Rafale fighter jets – and then there are components and equipment. These are much less visible, less spectacular, but our ability to supply such equipment, the kind integrated into platforms like tanks and aircraft, still creates significant added value."
The BITD, spread across more than 4,000 companies, could create between 500,000 and 800,000 jobs over the next 10 years.
Lucazeaux said: "Our goal is to be able to export, and in these very promising sectors, the potential benefits in terms of wealth and job creation can be considerable."
This article was adapted from the original version in French.
