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German Armed Forces in Bundeswera, Armed Forces of Germany, during the main preparation of November 29, 2022, near the prenzlau, Germany.
Sean Galop | Gets the image
As Europe plans to pour billions of dollars into defense, many regional leaders seek to spend money at the local level – but some market observers say it is inevitable that US companies will benefit from approaching security.
Last week in parliament voting Historical debt reform He paved the way to go to defense in Germany. Separately Prime Minister Kire Starmer promised a hike to the UK national expensesand the EU promised Mobilize up to 800 billion ($ 867) euro Seeking the “urgent” to increase the costs of the block security.
“Prioritize European companies,” the EU says
Officials – and companies – made it clear that they want to save money within European borders.
Last week’s official update on Europe’s strategy of Europe called further Member States “spend better, work together and prioritize European companies.” New Expenditure Plans – Note Most state -owned non -UK countries will be stopped from procurement processes unless they have signed security and protection agreements.
Meanwhile, Thales CEO Patrice Kane told CNBC Previously this month that Europe should “take its destiny into its own hands” and seek to maintain new defense budgets in the region.
“This is only a political willingness to buy more and more from European suppliers, not suppliers based outside Europe,” he said in an interview. “The United States supplies its defenders’ defenders … Australia is doing the same thing, the UK is doing the same thing – so why should Europe do it?”
The junction of defense is “extremely difficult”
Despite the fact that the EU seems to seek to spend as new protection in Europe as possible, the sale of purchases will require a significant change in the region. A number of US giants are currently occupying a large space in the European military supply chain.
Eg was a supplier to Europe for more than seven decades. In recent years, the firm has been cooperating with Rheinmetall to provide Germany by an individual missile artillery system, has begun production of the Homar-A missile system for the Polish government and sold in the Netherlands in the Netherlands.
US Northrop Grumman Defense Giant is another major supplier of European militants who have been subjected to major team control systems and control (C2) for the NATO and British Ministry For 25 years.
Since the beginning of this year, Raytheon – with headquarters in Arlington, Virginia – won Contract for 529 million dollars To replenish the Netherlands Air Defense system as well $ 946 million. The contract supply air defense systems to Romania.
Michael Vit, Professor of International Business and Business Strategy in London, said CNBC that the defense between Europe and the US “will be very difficult in the short term.”
“So, some money will certainly go to US suppliers,” he said about new budgets. “But in the long run, European defense should stand on its own feet, with the highest contribution to the US, because cooperation in the security of the US administration cannot be judged.”
“Of particular interest can spend on nuclear weapons to replace the US umbrella over Europe – combat units, delivery systems and so on,” Vit added in the comments by email.
The multimillion -dollar of the UK Nuclear Redup Program Using American missiles and it depends on the US for maintenance, According to Homeman Analytical Tankers.
“Continuing to rely on the United States behind its deterrent seems to be a risky option,” the institution’s researchers said A comment published on Monday. “The first Trump administration may look like aberration, but its second term can reflect deeper long -term changes in the US foreign policy … Studying options for developing European Allies’s replacement opportunities can be the next logical step despite the problems.”
Tobias Elwood, a former UK politician who held the post in the British Ministry of Defense, also stated that it was time to have the UK to reduce its dependence on US protected supplies.
“We must assume that America will not be there that they are recruiting back,” he said on the phone. “So that they can deny what we need to fill?”
Earlier this month is the US temporarily stopped military assistance to Ukraine After AS Public collision between two people’s leaders. Washington Kiev’s support has resumed.
“If everything goes (down) the trajectory that we see, then we can easily see the closure of the defense markets, even our nuclear deterrent, so we have tough questions for us,” said Elwood CNBC.
Problems with the capacity
However, according to Thierry Wizman, Europe is facing another obstacle for its expenses, according to Thierry Wizman, Global Pertcts and Currents Strateast in Macquarie Group. He said CNBC that just “cannot be able” to prevent new security budgets from US companies.
“The economy of scale in European defense, a highly specialized nature of what is being built, and the need to maintain a set that meets NATO standards and interactions with American systems that will still be in Europe – all this seems to indicate that a good part of it can be directed to the US,” he said.
“Aggressive” transaction
Even if the problems with the capacity and supply chains can be solved, US firms can take strategic steps to avoid off the growing capital source in Europe, said CNBC Bill Farmer, Investment Bank Brown Gibbons Lang & Company (BGL).
“You have a situation where the US still has a big budget, but it is potentially not growing as fast as it has, and the dynamics departed from large platforms to smaller, more agile companies,” the sector said in the call of the aerospace, defense and public service.
“While you are going to Europe and there is such a huge opportunity – budgets are changing, there is a great opportunity to increase investment in capital. So I think you can potentially see some decent acquisitions in Europe.”
He signaled that US defense companies would be “quite aggressive” when performing transactions with his European peers.
“Leonardo, Rolls Roice, Airbus, SafranThales – They all have huge opportunities in front of them, ”said the farmer.
