French defence victory could mean a defeat for European co-operation
UAE Rafale deal tips balance of power in combat air systems project to Paris
Peggy Hollinger
The French defence industry had two reasons to celebrate when the United Arab Emirates agreed to buy 80 Rafale fighters from Dassault Aviation last month.
First, it was sweet revenge for last autumn's humiliation when Australia walked away from a submarine deal in favour of an alliance with the US. There must have been a shiver of satisfaction in Paris when Abu Dhabi, days after agreeing to buy the French fighter, suspended talks with the US on buying the Lockheed Martin F-35.
Secondly, the UAE order - worth an estimated €14 billion - will guarantee the production of the Rafale until 2031, as well as the work of more than 400 French companies in the supply chain.
It will also help finance France's investment in future upgrades to the Rafale, which is now expected to be in service until the 2050s.
Yet while the deal has many advantages from a French perspective, it risks destabilising Europe's defence collaboration efforts. For it strengthens Dassault's hand in the still difficult negotiations with the German-based Airbus defence division on Europe's proposed Future Combat Air System (FCAS).
The last time Dassault - and by extension the French Ministry of Defence - felt it was not getting what it needed from a European combat programme, it walked away. The result was Dassault's Rafale.
Launched in 2017 by former German chancellor Angela Merkel and French president Emmanuel Macron, the FCAS was an overtly political project. It showed the determination of both countries to strengthen Europe's sovereign military capability after Britain's exit from the EU. In 2019, Spain joined the programme.
The problems started when politicians handed it over to industry. From the start, it was marked by squabbles over technology sharing and leadership of the most critical parts of the programme. The fights were exacerbated by fundamentally different ideas of what collaboration meant.
"French collaboration ensures that you get the most effective result," usually under French leadership, says one European defence official. "In Germany, it's partly about the best athlete, but it's also about sharing the industrial work."
The project has also brought together two bitter rivals - Dassault and Airbus Defence and Space. But last year it seemed that Europe's political ambitions had taken over. Agreement on the basic principles was reached and industrial agreements were reached on six of the project's seven pillars, covering manned and unmanned aircraft, space and ground-based communications, advanced stealth technologies, artificial intelligence and more.
But divisions remain over the seventh pillar - the next-generation fighter itself - and there is no sign of imminent compromise. Both sides have logical reasons to dig in their heels. Dassault, the standard-bearer for French sovereignty in fighter aircraft, argues that it should develop and manage the crucial flight control system itself, for example. But Germany naturally expects its industry to have access to the technology, having pledged billions for the project.
It is in this context that the UAE Rafale deal could tip the balance, argues Francis Tusa, consultant and editor of the Defence Analysis newsletter. "It has changed the equation," he says. "France no longer needs Germany. The profits they will make from the UAE deal will fund the Rafale upgrades."
"The project's days are numbered unless the Germans understand where they stand in the pecking order," adds Tusa. "They are not equal in terms of industrial capacity."
Meanwhile, the new German government's plans to codify into law the country's tighter restrictions on arms exports - potentially limiting them to NATO and the EU - add to the tensions. Such constraints on exports "would be a killer," said a French defence official.
It would be a blow to Europe's defence ambitions if France chose to withdraw again from a European combatant. It would also be a setback for Macron, who has favoured collaboration during the French EU presidency. But presidential elections are looming in April and the Dassault family doesn't just control a key French defence company. It owns the politically influential newspaper Le Figaro.
Ultimately, while only politicians on both sides can resolve the impasse, it may have to wait until France goes to the polls. But the longer the impasse continues, the greater the risk that Europe's last test of cooperation will begin to crumble.
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