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French defence budget boost swaps a 7% cut for a 4% jump

30 April 2015
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France Defence Budget (Nominal EUR) 2013-2019

Key points:

  • France’s announcement goes even further than Germany's plan to increase spending by EUR1.9 billion over 2015-2016.
  • While many countries in Eastern Europe have already increased spending, we may finally be seeing an end to the erosion of defence spending in Western Europe.
  • France’s defence budget in 2015 is forecast by IHS to be higher than India, Saudi Arabia and Japan.
  • IHS Aerospace, Defence & Security forecasts that in 2016, the French defence budget will over take Russia’s.

French President Francois Hollande announced that French defence spending would increase by EUR3.9 billion over the 2016-2019 period, reversing the slide of previously announced budget plans and bringing the core French defence budget up to EUR35 billion. Furthermore, the 2015 defence budget will be ring-fenced from any austerity cuts.

Under static spending plans laid out by the Projet de Loi de Programmation Militaire (LPM) 2014-2019, defence spending in France would have effectively been cut by 7% in real terms. The April announcement reverses this trend and the defence budget will now reach EUR32.7 billion by 2019, a 4% increase in real terms over the 2015 budget.

Instead of France spending sliding down to 1.2% of GDP (excluding pensions), the defence budget will now be maintained at 1.4%.With pensions, spending will come to 1.8% of GDP, within striking distance of the NATO mandate that members should spend 2% of GDP on defence.

Such an announcement is the latest in a series of European-wide statements of intent to increase defence spending and goes even further than Germanys plan to increase spending by EUR1.9 billion over 2015-2016.

While many countries in Eastern Europe have already increased spending, we may finally be seeing an end to the erosion of defence spending in Western Europe. These increases by major European players increase the pressure on the UK to stop any further budget cuts.





(307 words)
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