Categories  company balance Policy

European Defense Spending Picture Worsens

New figures released by the European Defense Agency (EDA) show a deteriorating level of financial commitment by member states to defense even before the latest austerity budgets were passed this year.

In figures released Dec. 9, the EDA shows that defense spending is eroding not just compared with gross domestic product (GDP), but also as a share of government expenditure. In 2006, countries spent 1.78% of GDP on defense, but that dropped to 1.67% in 2009.

But the level of government commitment to defense relative to other spending areas also is falling. By 2009, EDA members applied only 3.31% of government expenditure to defense, down from 3.79% in 2006.

The figures reflect spending across the European Union, except for Denmark, which is not an EDA member. The EDA figures do not reflect budget cuts implemented this year among members, including Germany, France and the U.K.

For industry, the one bright spot to emerge from the figures is that investment accounts are taking a large share of the budget, up to 21% in 2009 from 19% in 2006, with personnel costs dropping to 51% from 55% over the same period. Modernization spending per soldier also has been on the rise in recent years.

One agenda item for EDA has been to increase collaborative European defense equipment efforts. Progress there has been slow and remains far off the target of 35%; the percentage of collaborative research projects has swung between 18.9% in 2007 and 22% last year. Additionally, joint research and technology spending—at 12.8% of total R&T funding last year—remains far below the 20% target.

Meanwhile, EDA will be operating with a €30.5 million ($40 million) budget next year as it also tries to foster further cooperative program developments among member states. The new funding level was decided on Dec. 9 by the member states. On the agenda for next year is also an update of the Capability Development Plan and the three-year work program.

During the meeting of European defense ministers in Brussels, Poland signed a letter of intent to join the Multinational Space-Based Imaging System program. Other members include Belgium, France, Germany, Greece, Italy and Spain. Also, 11 countries agreed to launch the €50 million unmanned maritime systems program to work on mine countermeasures and other naval applications.

Also on EDA’s agenda is an examination of the European Union’s Radio Spectrum Policy Program to assess implications for European militaries.

Meanwhile, the French-led initiative for a forensic analysis system for improvised explosive devices is moving forward to the point of being ready for field trials in Afghanistan by the middle of next year.

From Aviation Week  By Robert Wall

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