European Armaments Collaboration

Ron Matthews

• Publisher: Routledge
• Year: 2013
• ISBN:
  9781134574582
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

First published in 1992. The changing strategic environment of the 1990s has been characterised by events such as the Middle-East conflagration and super-power disarmament which represent the two opposing ends of the present security spectrum. The framing of appropriate defence policies now depends on increased NATO industrial defence restructuring and cooperation, especially within Europe. This book identifies, explains and analyses the key issues involved in Europe's defence-industrial reorganisation progress. It tackles head-on controversial issues such as: divergences between practice and policy in NATO US-European positions; the high costs of collaborative ventures; competition vs concentration and the complexities of adopting an European defence consensus within NATO. At a time when the diminution of NATO's defence-industrial base goes hand-in-hand with product reorientation and specialization, this book provides concise, critical and contemporary assessment of European and NA TO collaborative issues.

1 BACKGROUND

Introduction

A handful of years straddling the seam between the eighties and nineties have brought profound changes to the East–West security equation. The pace of these changes, political and strategic, has been frenetic. The new order is now irreversible: an unintended consequence of the August 1991 attempted coup d’état in Moscow. Although the West was initially slow to react to the Soviet transformation process, the coup ensured more active consideration of accommodating political and military responses. An important aspect of this process is that from an ex-post perspective, turbulence appears to be orchestrating the coming-together of an ordered political, economic and strategic jigsaw. International cooperation has, and will continue to be, a key variable in this evolving framework.

The Gulf crisis of the early 1990s represents an important part of the jigsaw. ‘Desert Storm’, aside from successfully bridling Iraqi President, Saddam Hussein, proved to be a milestone in several other significant ways. It revealed a sense of unity and purpose in NATO planning (including French), coordination and implementation of military policy. For the first time US-led strategic objectives were achieved under United Nations (UN) auspices, and with the approval of the Soviet authorities. In addition, the unimaginable also happened: an international military force, with global authorisation, upheld the rights of a community member. Moreover, the success of the operation soon led to speculation that this form of political and military cooperation represents the blueprint for the future.

Post Gulf war analysis highlighted two other key factors that assisted in securing a rapid and successful outcome to the Allied campaign. Firstly, there was the dominance enjoyed by the United States’ (US) superior weapons systems. These emphasised the electronic dimension of contemporary military technology. High precision, laser-guided munitions; space telecommunications and surveillance; and sophisticated radar systems and electronic eavesdropping, all combined to give Allied forces an unassailable advantage in the conflict. The performance of the US military’s electronic wizardry reinforced the American authorities’ policy position of eroding quantity by technological quality. No longer, it appears, is there a need for large and expensive standing armies; nor, indeed, for huge numbers of highly expensive fighter/bomber aircraft. A lesson of the Gulf conflict was ‘economy of effort’. In this context, it has been claimed that the F-117A (Stealth) bomber, flying only about two per cent of Allied aircraft sorties, was responsible for hitting more than 40 per cent of the strategic targets.¹

The second major lesson to emerge from the Gulf war related to the need for rapid deployment of mobile and flexible military forces. This is not to say that heavy weapons platforms, such as tanks, do not have a future role to play. They do, but for quick and decisive strategic advantage they too will need to emphasise mobility, adaptability, long-haul capability as well as lethality. The implications from official recognition of the need for high tech’ weapons systems along with mobile and flexible multinational quick-reaction forces is the restructuring of NATO members’ defence budgets, Armed Forces and defence–industrial bases. The political imperative of providing a peace dividend to western publics that have observed the threat from the Soviet Union not just dramatically reduce but dissolve, will ensure that this restructuring process occurs in a downward direction.

The restructuring process is a natural part of the new international security pattern. It has public finance, industrial and military linkages. Reduced military threats and adjusted force structures have led to falling levels of NATO military expenditure. The United Kingdom (UK) Ministry of Defence’s (MoD) budget, at around £24 bn for 1991–92, is set to fall in real terms in the coming years of the decade.² In the US, reduced military spending has been a fact of life at the Pentagon for some time. The US defence budget fell 22 per cent in constant dollar terms between the fiscal years 1985 and 1991, and is projected to fall another 13 per cent between the fiscal years 1991 and 1996, when military expenditure to Gross National Product (GNP) is then expected to be down to 3.7 per cent.³ Such declines in real defence expenditure are not untypical of spending trends in other NATO and erstwhile Warsaw Pact (WP) States. Indeed, although future events are uncertain it is a safe bet that declines in military expenditure will accelerate rather than decelerate.

The reduction in monies available for defence will force the restructuring of NATO’s Armed Forces. Britain’s ‘Options for Change’ policy document indicates that the Army will lose 40,000 soldiers. In fact, nearly half the remaining forces will be devoted to NATO’s 100,000 strong Rapid Reaction Force. Less severe cuts will also affect the Royal Air Force and Navy. France intends to reduce its Army by up to 70,000 by 1998; that is a quarter of its current strength. Some 50,000 French troops are due to leave Germany by 1995. Unified Germany plans to reduce its Armed Forces to 370,000 by the close of 1994 from the combined Germany total of the early 1990s. The US is taking similar action, closing a third of its 1,600 overseas bases by the end of 1995. Of the bases to be closed, around 80 US military facilities in Europe are to be staged out, bringing down the number of American troops stationed there from 287,000 to 150,000 by 1995.

Restructuring will also affect NATO countries’ defence–industrial bases, but corporate strategy has been proactive in this regard, in that rationalisation, consolidation and diversification have been characteristics of the international arms industry since the late 1980s. The process will undoubtedly continue, though perhaps at a slower pace. There is really no choice, except to leave the defence sector altogether, an option which several major contractors have in fact decided to take. Nor is it easy to see how the export market can serve as a life-line in extending Western defence contractors’ sales levels of the mid-1980s. Developed country arms imports are now in decline, while developing country imports, widely regarded as the best corporate option, have been in terminal decline for several years. According to SIPRI figures (World Armaments and Disarmament 1991), Third World imports fell from US $27.2 bn in 1987 to US $11.8 bn in 1990.

Compounding the problems of securing export orders to prop up flagging domestic sales, NATO’s defence contractors also have to contend with the push for defence–industrialisation by developing States, aided by their ability to extract offsetting technology transfer from the advanced countries’ arms vendors. This process will be difficult to halt, as the arms market in the 1990s is very much a buyers’ market. Retro-fits to extend the life of existing operational kit will reduce the arms market still further, as will sales of redundant arms located in Europe. Already, at basement prices, tanks have been ‘cascading’; that is, sold out-of-area. For example, US tanks have been shipped to Thailand and Egypt, while Czechoslovakian tanks have been sold to Iran and Syria. Finally, the projected emergence of an International Arms Register will act to stem prolific amounts of military equipment exports to unstable nations and regions.

Yet a further piece in the jigsaw has been the development of institutionalised East–West security mechanisms. The 35 nation Conference on Security and Cooperation in Europe (CSCE), including East and West Europe, Canada, the US and the Soviet Union, represents a forum for greater transparency and discussion on important issues affecting greater Europe. Political cooperation in the foreign policy domain has also been supplemented by cooperation in the military sphere by an additional mechanism, the agreement on Conventional Armed Forces in Europe (CFE). The CFE agreement has set in motion a process of controlled European arms reduction amongst East–West States. Conceptually, it is moving towards a position which Professor Taylor has coined ‘legitimate defence’.⁴ This describes a situation where national military capacity is recognised by friend and foe alike as being sufficient for solely defensive purposes. Politically, arms reductions make sense because the reduced WP threat calls for corresponding reductions in NATO military capacity, but there are implicit economic and military consequences of potentially greater significance for NATO. The fact is that negotiated maximum levels of conventional military equipment in Europe (Treaty limited items) constrains the ability of signatories to act unilaterally in raising national arms thresholds. Clearly, if national military quotas are broken, then Alliance agreed quotas will also be broken. A politically unacceptable position for other Alliance members. Three issues emerge from the CFE agreement:

1) A stimulus is provided for defence manufacturers to reorient research, development and production to those items that are not treaty limited. Here, SIPRI cites laser and railgun technologies (making gun calibre irrelevant for weapons performance), stating that . . . ‘Therefore an armoured vehicle with a main armament based on either of these technologies may be unconstrained by CFE even if its mission is identical to that of a conventional battle tank.’⁵

2) Reducing numbers of helicopters, combat aircraft, tanks, artillery pieces, and armoured personnel carriers indirectly suggests that those that remain will require more sophisticated inputs reflecting the need for greater emphasis on intelligence-gathering, reconnaissance, command control and communications systems, as well as flexible state-of-the-art weapons systems. These more specialised requirements will, in turn, transform defence contractors not only in their product structure, i.e., increased emphasis on systems integration and electronic activities, but, in addition, industrial structure, through still further rationalisation and concentration. Huge numbers of defence workers will be affected by this process. For instance, it has been reported that over one million defence employees will lose their jobs in the US defence sector by the mid-1990s.⁶ Over the same time-scale, it is expected that Europe’s defence industry will contract by up to 30 per cent, leading to an upper boundary of job losses of half a million.⁷ Clearly, those NATO countries and contractors most heavily dependent on defence will feel the pain more than others.

3) A further consequence of the CFE agreement will be its influence on NATO policy-making. The combined pressures of increased specialisation, reduced scale and commonality of equipment deployment by NATO States in Europe will act to encourage production and procurement integration amongst NATO countries. Decisions to unilaterally build-up national arms capacity are no longer sustainable. Arms procurement decisions will, in the future, have to be taken on a more integrative basis. This process naturally lends itself not only to arms production cooperation but also to standardisation; a logical goal for multinational forces. Thus, the jigsaw is complete.

This introductory section has attempted to sketch the turbulent but challenging environment in which NATO must now operate. It has also served to provide a backdrop for this book’s subject-matter, NATO arms collaboration. A much discussed topic, and one that will have a greater role to play in the radically changing circumstances of the 1990s. The focus of discussion is directed towards the European dimension. The reason for this is straightforward: over the last decade, there has been a dramatic initiation and revitalisation of European cooperative institutions and policies, which, when combined with the defence–industrial restructuring that has recently been taking place, significantly alters the conditions for future NATO arms collaboration.

Chapter One discusses further some of the issues raised in this introduction as well as related aspects of the collaboration debate. The topics are interrelated within an economic, political and military framework, providing a background profile of the changed international system following the disturbances to the status quo. Chapter Two offers an historical review of post-war European policy initiatives aimed at promoting defence cooperation generally, and international arms collaboration in particular. To remind ourselves of the supposed benefits of arms collaboration, Chapter Three provides a theoretical overview of the principles involved. Progress towards constructing Europe’s defence–industrial pillar is analysed in Chapter Four, emphasising especially the important contributions that the new technological bow wave industries of electronics and telecommunications are making. Chapter Five concerns itself with the changing industrial structure of Europe’s defence industry, including an examination of the status and problems of the Defence Developing Industrial nations (DDI). In conjunction with the cooperative measures sponsored by NATO, the important and related topic of US attitudes, policy initiatives and responses is critically evaluated in Chapter Six. The penultimate chapter deals with the realities of arms collaboration. Here, the costs just as much as the more widely touted benefits are assessed. Finally, Chapter Eight provides a brief review of the subject matter, concluding with a prognosis of NATO arms collaborative developments.

Variations on a Theme of Uncertainty

Into the 1990s the only factor NATO can be certain about is the unpredictability of the situation. Since the mid-1980s the Alliance has been rocked by a series of events, such as the emergence of a benign Soviet Union; the INF Treaty; the democratisation of Eastern Europe, leading to the disintegration of the Warsaw Pact as a Military Alliance; reunification of Germany; the revitalisation and increased projection of European defence cooperation initiatives; substantial declines in defence expenditure on both sides of the East–West axis; changing demographic trends; and the existence of huge US federal budget and foreign deficits. Although this list is not exhaustive, it conveys the radical nature and pace of the changes taking place.

This is not the forum for discussing in detail the convulsive events which have occurred, but it would be a serious omission not to recognise their import since their cumulative impact has not left NATO unscathed. While much of what has happened affects all Alliance nations, the vortex of change is undeniably located in Europe.

In a very real sense, this maelstrom of change has left NATO searching for an aim. For forty years after the end of the Second World War NATO had been successful in its aim of preserving peace because it was operating in a hostile international climate, where a strong and unified Alliance was viewed as essential. In the new epoch currently taking shape, cold war’ rhetoric and aggressive military postures appear counter-productive and remarkably out of place. The role of NATO must therefore reform correspondingly if the Alliance is to survive. There are several factors which NATO should consider in this reforming process:

(i) Credible Deterrence

As a public good, nations have always been prepared to fund defence for the insurance it affords in the event of external aggression. Clearly, as basic human characteristics have not altered, some minimal threshold of armed force will still be required in the 1990s and beyond. Indeed, the current economic and political instability in the former Soviet Union reinforces this view. If the strains of Perestroika and the political machinations of the loosely linked ...

Table of contents

• Cover
• Title page
• Copyright page
• Contents
• 1 Background
• 2 History
• 3 Overview of Principles
• 4 Europe’s Developing Defence Industries
• 5 European Defence–Industrial Structure
• 6 US Attitudes
• 7 Practice
• 8 Review and Prognosis
• References and Notes
• Appendix A
• Index