By Bastian Giegerich, Director of Defence and Military Analysis
The white paper on German security policy and the future of the Bundeswehr, published by Angela Merkel's cabinet on 13 July, promotes a new approach to multinational armaments cooperation. Based on the assessment that increasing development costs and low national order volumes will be unsustainable in the long run, the German proposal in essence boils down to four elements:
- Harmonised capability requirements to enable one standardised design rather than multiple national versions that drive up prices and prevent interoperability.
- A lead-nation approach, in which one country facilitates the necessary harmonisation and then manages the project, instead of complex multinational governance structures that increase the transaction costs of coordination.
- Production based on technological and industrial excellence, rather than on the purchase of production share, to avoid financing industrial overcapacity.
- Rolling out cooperation across the life-cycle of equipment, from development and procurement, to maintenance, repair and operational support, given that buying a piece of kit is usually the smaller share of the overall cost.
These ideas are not new – in fact, they represent lessons identified from all that went wrong with European multilateral armaments cooperation in the past. What is novel is to see them expressed unfiltered in the national strategy of a key player in the European defence puzzle, with the explicit goal of promoting industrial consolidation and improving European interoperability, transatlantic burden-sharing and efficiency of defence spending. If pursued with vigour, and if other European countries buy in, the impact would be rather fundamental.
Harmonised capability requirements are only possible if armed forces accept 'good enough' solutions rather than push for perfection and customisation according to national needs. It means every partner agreeing that a helicopter needs a winch but refraining from specifying different maximum loads. The next challenge would be to freeze the design once agreement on requirements has been reached. As Sir Bernard Gray, former chief of defence materiel in the United Kingdom, suggested: 'the relationship between a Requirements Manager and a defence programme is like the relationship between a dog and a lamp post. [Requirements Managers] simply find it impossible to pass a programme by without leaving their mark on it.'
The lead-nation idea can only work if nations rediscover the long-lost secret of effective multilateralism: one partner has to carry a disproportionate share of the burden in order for all to enjoy the benefits of their cooperation. In this case, being the lead-nation essentially means taking on the role of project manager – a thankless task and one that nations will only accept if they perceive an urgent need to close an important capability gap. But it does not imply that only large nations can be lead nations.
Likewise, lead-nation status would not mean production-lead. Only a limited number of European nations has a defence-industrial base of international significance. A focus on excellence would trigger transnational defence-industrial consolidation, because the previous practice of dividing production shares on the basis of the percentage a customer buys of the overall production run has produced a fragmented industrial landscape. There are currently four Eurofighter production lines representing the ownership structure of the Eurofighter consortium: Germany (Airbus Defence & Space) and the UK (BAE Systems) 33% each, Italy (Leonardo) 21%, and Spain (Airbus Defence & Space) 13%. Fragmentation in the area of land and naval systems is arguably even worse. However, a future combat aircraft constructed according to the ideas Berlin is promoting in the 2016 white paper is unlikely to be built that way.
At the same time, side benefits beyond the defence and security industries would probably be necessary initially to provide some sort of compensation for those governments likely to lose out under the potential new arrangements. Lists of sovereign national technologies will need be drawn up, identifying those areas in which a country is not willing to rely on external suppliers. To be helpful, such lists need to fulfil at least two criteria: they have to be significantly shorter than the overall list of defence-industrial technology in a country and their overlap with other countries that have major defence-industrial capacity can only be partial.
The drafters of the German white paper were under no illusion as to what they were proposing: 'Essentially this means relinquishing individual sovereignty for the greater sovereignty of all.' As the saying goes, if more than one miracle is necessary to make an idea happen, it is unlikely to happen. At the same time, an idea whose time has come is a powerful thing. If the German government is willing to invest in its ideas it should start by simultaneously and coherently engaging stakeholders in the requirements community, the procurement community and defence industry. New approaches to armaments cooperation will stand and fall with buy-in from these three groups.