The total value of French defence exports to almost all regions of the world grew during 2001–20: the exception was Europe, where French sales declined. This report examines several globally successful sectors for French defence companies, and why those companies have fared less well in the European market. It explains why there is likely to be an upturn in sales to Europe in the near future and argues that the next round of European joint-development programmes will be crucial to the longer-term health of French defence exports to the region
During the period 2001–20, the total value of French defence exports to Europe declined while those to all other regions grew. High-value sectors where France has secured major sales globally, such as combat aircraft and naval vessels, have not enjoyed the same success in Europe. Orders from European countries for military helicopters designed and built mainly in France have been small, while exports of the multinational NH90 utility helicopter dried up after 2007, with some customers now returning aircraft or replacing them early. Ambitions for the Tiger attack helicopter have not been achieved, with just one European export customer. French companies have provided a number of non-European countries with their first military-satellite capability, yet sales of such equipment to Europe have been very limited.
There are broadly three factors explaining this trend. First is the highly competitive nature of the European market. This is particularly the case in high-value sectors such as combat aircraft and naval combatants. Second is France’s approach both to European defence cooperation and exports, which is often commercially driven. Only recently have French offers begun to include the kind of long-term strategic partnership that has made American products more attractive to potential customers. Third, the post-2008 decline in European defence spending, due partly to an assessment by many European countries that their security environment was relatively secure, meant eight years of reduced opportunities for all defence companies in the region until regional defence spending began to grow again from 2016.
During the rest of the 2020s, it is likely that the value of French exports to Europe will grow as deliveries for recently signed high-value deals continue or begin. Rafale production has been secured until the end of the decade by contracts signed since 2015, including with Croatia and Greece, and opportunities exist in various other sectors. The sale of armoured vehicles to Belgium, under an arrangement similar to the United States’ Foreign Military Sale system, could provide a template for other sales to European customers. Russia’s second invasion of Ukraine has drastically changed European defence-spending plans and will create more opportunities for all companies, including French ones.
Further into the future, it seems likely that the health of French exports to the region will depend on the success of a number of European initiatives. The most significant of these, with the greatest potential for export sales, are the Main Ground Combat System (MGCS), in partnership with Germany, and the Système de Combat Aérien du Futur (SCAF)/Future Combat Air System (FCAS), in partnership with Germany and Spain. However, while the incentives to jointly create platforms are strong, disagreement over workshare and project leadership is currently delaying the earliest phases of development and could ultimately scupper these efforts. More broadly, it is not clear to what extent President Emmanuel Macron’s call since taking office for Europe to end dependence on US imports and to develop ‘European sovereignty’ has convinced his European neighbours. They may see Russia’s latest invasion of Ukraine as supporting Macron’s argument, or instead as a reason to stick with a transatlantic approach. Or they could opt for the middle ground and commit to preserve both relationships. Whether France can itself resolve the contradiction within its approach to European defence cooperation remains to be seen.
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