France joined air strikes this month against Islamic State positions in Syria and Iraq, with bombing led by Dassault Aviation’s Rafales fighter jets.Defense Ministry/The Associated Press
Europe's defence industry is set to reap a $50-billion (U.S.) windfall as the Nov. 13 terrorist attacks on Paris prompt governments to ramp up spending on military capabilities spanning cybersecurity to fighter jets, armoured vehicles and drones in an effort to defeat the Islamic State.
France, where Dassault Aviation SA's Rafale fighter jet is made, has halted plans to cut almost 10,000 military personnel, while Germany will spend an extra €8-billion ($8.5-billion U.S.) on defence and Britain has earmarked a further £12-billion ($18-billion), benefiting companies including BAE Systems PLC. Italy said Tuesday it would devote €1-billion more to security, after the draft budget called for €2-billion of reductions.
European governments are rethinking their defence policies after years of cuts tied to the draw down in Afghanistan and Iraq and austerity programs imposed after the global slump. The spending commitments will swell budgets that had already begun to revive amid heightened tensions with Russia following last year's annexation of Crimea, with Britain committing in August to spending 2 per cent of GDP on defence.
"Over the 2015-2019 period, an extra $50-billion will be added to Western European defence spending as a result of changes implemented this year," said Fenella McGerty, senior analyst for defence budgets at IHS Jane's. There will be an $11-billion uplift this year, she said, driven by adjustments in France, Germany and Britain that began with the Jan. 7 assault on the Paris office of satirical magazine Charlie Hebdo.
The most immediate response to this month's attacks saw France join air strikes against Islamic State positions in Syria, with bombing sorties led by Dassault's Rafales, further burnishing the combat credentials of a warplane that's enjoyed a string of overseas order successes after deployment in Afghanistan, Libya, Iraq, Mali and the Central African Republic since 2007.
Britain may follow suit, extending its anti-IS campaign from Iraq to Syria, following an announcement from Prime Minister David Cameron later this week.
While recent British bombing missions have been undertaken by aging Panavia Tornado aircraft designed for the task, Mr. Cameron confirmed in Monday's defence statement that Royal Air Force Eurofighters, built by BAE, will get enhanced ground-attack capability, allowing them to play a more active role, and a 10-year life extension that will effectively create two extra squadrons.
Britain will also take all 138 Lockheed Martin Corp. F-35 fighters initially ordered and triple the pace of deliveries to 2023, allowing deployment of two new aircraft carriers with a full roster of planes. BAE is an F-35 partner and Rolls-Royce Holdings PLC helps make the engines, as it does on Eurofighter.
Mr. Cameron also reiterated a commitment to an Anglo-French venture for the development of military drones. Under an agreement signed last year, BAE and Rolls-Royce are working with France's Dassault, Selex ES Ltd., Thales SA and Safran SA on a model along the lines of General Atomics Aeronautical Systems Inc.'s Predator. Thales also has a 25 percent stake in the Rafale.
Airbus Group SE will offer surveillance and reconnaissance upgrades to its A400M military transport and A330 airborne tanker models, providing operators with a "cheap and simple" option for boosting intelligence gathering, according to Fernando Alonso, head of its military aircraft arm.