|European Parallels |
By Philippe Grasset (*). Brussels, December 4, 2000.
Joint developments, since 1998, for the integration of European strategic industry (aerospace, defense and electronics) and the formulation of a common European Defense (ESDP) within the EU are now leading observers to envisage establishment of a true European internal market for weapon systems. According to a European source close to the European Commission : It is clear that a military-industrial Europe is in the process of taking shape. Accordingly, there must be rules to stabilize the activities of the market which is coming into being to foster the development of an economic and industrial environment which meets the demands of competition. The idea behind this assessment is that such highly political developments (industrial integration and the ESDP), which are formative of a European identity, must be based upon a healthy industrial and commercial foundation. The European institutions, the European Commission especially, are keenly mindful of their institutional responsibility for guiding these momentous developments to fruition.
The European Commission may be led to play a role in regulating the weapon systems market, although the field does not currently fall clearly within that body's area of authority. The situation is in full evolution, as is the European situation generally. A discussion is already underway within the Commission with a view to working, in collaboration with the Member States, toward an initiative on weapon system cooperation and exports, an initiative which could materialize in the course of 2001.
There are two intra-European situations which serve as a test bed for this new European scenario. The challenge is clearly political, since it requires in the first instance the development of the instruments and of the relations between nations to make possible the establishment of a European military-industrial complex; on the other hand, the procedures for achieving this fall within the purview of the industrial and commercial world. The two situations mentioned here are all the more interesting since they concern similar situations at least comparable operational situations and political situations which are not without their points of comparison, if only because of their link with the European Union. In other words, the two situations can effectively be compared:
The competition which is developing in the Netherlands for the replacement of the F-16 fighter aircraft. In this competition, alongside the American entrants, the Joint Strike Fighter and the F-18E/F, there are the two European contestants, the Eurofighter and the Rafale
The situation in Greece after the announcement of an order for 60 Eurofighters, followed by a French proposal on the Rafale fighter aircraft.
From Order to Disorder
The case of the Netherlands is characteristic of the evolution of the European situation. Confronted with the prospect of replacing the F-16 around 2010-2015 and wanting to have as much time as possible to face up to the problem, the Dutch first considered the Joint Strike Fighter (JSF) as a successor, responding to American pressures for the exclusiveness of participation in the JSF. The situation was unreal, with absence of competition in favor of an American project that was still totally virtual. However, it reflected the European disarray on defense, with the result that political and commercial principles of evaluation, and principles of competition, were cast to the winds. Starting with 1998, the situation changed completely: first with the launch of the European Defense Policy (UK move in September 1998, France-UK Summit in St. Malo in December); as well as with the restructuring of Europe's strategic industry. At the same time, the erosion of the status of the JSF in the US strengthened this tendency by introducing a basic doubt concerning the reliability of the United States in this program and on its ulterior motives (financing a portion of the program from contributions by the export partners [$1 billion for the Netherlands]). The result is a totally new situation for the Netherlands.
Now, a real competition has been initiated, with a very meticulous procedure (call for proposals, evaluation of proposals and of systems, and scrupulous examination of the proposals extending to parliamentary hearings to begin the month of November). Of course, there are now, alongside the candidacy of the JSF, extremely serious European candidacies (the Rafale and the Eurofighter). A European political source close to the Dutch procurement summarizes the situation as follows: The Netherlands have put in place a system which is exemplary by the serious thought which has gone into it, by its clarity and by its democratic approach, leading to the belief that the commercial rules and the political assessments will be scrupulously respected and taken into account. It is a sort of model for Europe, in relationship to the new situation which is developing there.
The Greek Procurement: An Unacceptable Situation Taking Shape?
Greece offers a surprising contrast with the Netherlands situation, the surprise stemming mainly from the fact that Greece being also a member of the EU, asserts that its choices are determined on the basis of the European situation. The selection of the EFA2000 Eurofighter is at the center of the analysis here.
The circumstances which have fed the polemic in Greece are well-known. They are those surrounding the decision taken in principle in February 1999 to purchase 60 Eurofighters. The remarkable feature of this decision is that it was preceded by no competition and by no evaluation of any sort. That is the primary reason behind France's request that consideration be given, in the interest of the principle of competition, to an offer for Rafale fighter aircraft.
The announcement of the Eurofighter purchase was made at the same time as the announcement of two other procurement orders both of them immediately followed by contracts for American F-16 and for French Mirage 2000 fighter aircraft. There was a surreal aspect to this affair as well. The new F-16s and the new Mirage aircraft correspond to programmed requirements of the Hellenic Air Force; this makes the precipitous order for the Eurofighters all the more incomprehensible.
Since the aircraft correspond to no programmed requirement, the procurement itself becomes highly questionable and is being criticized as premature at best and as totally unwarranted at worst. For several months, the terms of the procurement have been the subject of keen interest and of severe criticism in Greece because they place the country in position where it is unable to make felt the type of pressure which a customer must be able to bring to bear on a supplier. The 15 October issue of To Vima encapsulates the general argument: So, an unacceptable situation is taking shape in which Greece will participate, with amounts overwhelming for the Greek budget, in the production of an aircraft without having a say in its planning and development, and it will simply be called at the end to purchase it at a price that will probably be set arbitrarily, and with the mediation of a company that is only an agent and cannot and doesn't want to secure the Greek interest.
There Is Europe And Then There's Europe
The Greek situation must obviously be viewed from the European standpoint in order to better comprehend it and impart to it its geopolitical dimensions. The Greeks themselves affirm that, in opting for the Eurofighter, they are making a European political choice. According to our source close to the Commission: What we need is not a European choice. Everyone is capable of doing that, so easy it has become today to slap that label on a product. What we need is a European choice which strengthens the general European process; strengthens cooperation and solidifies the European sense of identity among the nations involved and which does this with the greatest possible transparency. That is obviously the spirit which prevails in certain European circles in their analysis of the Greek procurement. Viewed from this constructive European viewpoint, the procurement presents several major drawbacks:
The procurement was initiated under a procedure which runs counter to all the rules of competition and of system evaluation. There was no call for proposals; no competitive bidding; nor even any operational evaluation (rendered all the more difficult in the case of the Eurofighter since it is far from its operational configuration).
The terms and the size of the procurement are such that it will have such a severe impact on the Greek budget as to compromise by adding on to other military programs (German submarines, F-16 and Mirage aircraft) the equilibrium achieved by that budget with respect to the convergence criteria. We would then be faced with a situation in which a supposedly European decision in one field jeopardizes Greece's European ambitions for entry into the Euro zone in 2002. The European Commission is following with great interest the evolution of Greece's military programs. The fear of the destabilizing effects of those programs on Greece's budgetary equilibrium is no longer a secret for anyone. The procurement will produce a very rapid over-armament of Greece's armed forces with equipment of the new generation (first deliveries planned for 2005, even before the Eurofighter is operational in the program's founder countries. Italy, for example, has had to rent F-16s to ensure the interim until the arrival of the EFA2000 aircraft.) That risks increasing tensions in the region, specifically with Turkey. This prospect is all the more damning since there are a significant number of areas of contention outstanding between Turkey and the European Union (Turkey's application for EU membership, the quarrel between Turkey and the EU on the relations between NATO and the EU's ESDP policy).
A More and More Complicated European Situation
From an even more general viewpoint one could say from a geopolitical viewpoint the operation raises questions concerning Germany's intentions (the Greek Eurofighter procurement is an almost 100% German initiative).
On the one hand, one can see in it a much more nationalist undertaking than a European undertaking, with the Germans emphasizing the Berlin-Athens linkup in support of the procurement. In the regional context, as in the context of the delicate relations between Berlin and Ankara, the initiative is viewed as more destabilizing than European. On the other hand, there are certain contradictions in the initiative, the Germans being rather hostile to the Serbian Orthodox church, and therefore hostile to the Greeks as the Greek Orthodox allies of the Serbs.
Quoting again from our source close to the Commission: it is rather a caricature of both destabilization and of improvisation in the German initiative, responding to thoughtless impulses and to unusually strong industrial and political pressures. One could also add certain more specific, more personal aspects, in a procurement whose unusual character invites unbridled speculation and conjecture. Thus, the fact that the brother of the Greek Prime Minister is the third-ranking official in the German intelligence services (BND) cannot be ignored, any more than the fact that personal contacts between the German and Greek leadership on this matter are reported to have been arranged by him.
Thus, the Greek Eurofighter procurement, without prejudging its future, which is far from settled, presents, as does the Netherlands case, a case study illustrating the evolution of Europe and the growing complexity of the European situation. Until these developments, the Europeans had had only limited involvement in their own defense procurements (purchase of weapons of non-European, i.e. American origin), and the initial aim was simply to establish such a European involvement. Now, with European defense coming into its own, the problem shifts its focus: the European involvement in European procurements must be a sound European involvement, and not a destabilizing one, or a practical façade to dissimulate national ambitions. The conditions of the Greek procurement, contrary to those of the Netherlands procurement, obviously illustrate the destabilizing tendency.
(*) Philippe Grasset in Context