The new army recruits in Bundeswehr, the armed forces in Germany, during the basic training on November 29, 2022 near Prenzlau, Germany.
Sean Gallup Gety pictures
Since Europe plans to pour billions of dollars in defense, many regional leaders are paying to spending funds locally – but some market monitors say it is imperative that American companies will benefit from the imminent security pride.
Last week, a parliamentary vote Reform of historical debt The cradle of the path to raise defensive spending in Germany. Separately, UK Prime Minister Kiir Starmer He pledged to raise Britain's national spending on defenseThe European Union pledged b Fill up to 800 billion (867 billion dollars) euros In an attempt to “urgently” intensify security spending of the mass.
“Giving priority to European companies,” says the European Union.
Officials – and companies explained that they want to keep money within the European borders.
An official update for the European Union's generation strategy last week Call Member States to “better spend, work together and set European companies' priorities. New spending plans He said Most of the states of the non-member state-including the United Kingdom and the United States-will be closed from purchases unless they sign the security and defense partnership agreements with the European Union.
At the same time, the CEO of Patrice CNBC said Earlier this month Europe must “take its fate with its hands” and strive to maintain new defense budgets in the region.
“It is just a political willingness to buy more and more European suppliers instead of Europe's suppliers,” he said in an interview. “The United States provides their defense equipment systems from American suppliers … Australia does the same, the United Kingdom does the same – so why should Europe do it in a different way?”
Defensing Defoupling “is very difficult”
Although the European Union appears to be committed to spending the largest possible amount of new defense capital in Europe, only maintaining purchases within the region will require a major shift. A number of US defense giants currently occupy a large area in the European Military Supply Series.
For example, the headquarters of Maryland Lockheed Martin, for example, It was a supplier to Europe for more than seven decades. In recent years, the company has made a partnership with Rheinmetall to provide Germany with a dedicated missile artillery system, and it began to produce the Polish government's multi-missile system and sold the air-to-air confrontation missiles to the Netherlands.
The American defense giant Northrop Grumman is another major resource for European armies that worked on the basic leadership and control systems (C2) of the Ministry of Defense in NATO and Britain For 25 years.
Since the beginning of this year, Raytheon from RTX – based in Armington, Virginia – won – Virginia – A contract worth $ 529 million To renew the national air defense system for the Netherlands, as well as a 946 million dollars contract To provide Romanian air defense systems.
Michael Witt, professor of the College of Commerce for International Trade and Strategy in London, told CNBC that the defense defense between Europe and the United States “will be very difficult in the short term.”
He said about the new budgets: “So, some money will definitely go to American suppliers,” he said. “But in the long run, the European defense needs to stand on its feet, with the ability to introduce a few of the United States because security cooperation by American administrations is no longer possible to assume.”
“It can be spent on nuclear weapons to replace the American umbrella across Europe – warheads, delivery systems, etc.”.
The United Kingdom is millions of dollars The Nuclear Corident Nuclear Program It uses missiles built in the United States, and they depend on the United States for maintenance, According to the Thought Chatham House.
“Continue to rely on the United States, its deterrent, seems to be a risky option,” said the Foundation's researchers at the Foundation. The comment was published on Monday. “The first Trump administration may seem to be a deviation, but its second term may reflect deeper transformations in the long run in US foreign policy … Explore options to develop alternative capabilities with European allies the next logical step, despite the challenges.”
Tobias Elwood, a former UK politician who held a great position in the British Defense Ministry during his parliamentary career, said the time has come for the United Kingdom to think about reducing its dependence on US -made defense supplies.
He said in a phone call: “We have to put this assumption that America will not be there, and that they are calling again.” “So, what can they deny what we will have to fill?”
Earlier this month, the United States temporarily Military aid was arrested to Ukraine After a General clash Among the leaders of nations. Washington's support has been resumed to Kiev since then.
“If things go on the path we see, we can easily see the closure of the defense markets, until we deterred nuclear, so there are difficult questions for us,” Elwood told CNBC.
Capacity problems
However, Europe faces another obstacle to the goals of spending, according to Terry Wizmann, global interest rates and currency strategies in the Macquarie Group. He told CNBC that he simply “may not be the ability” to prevent new security budgets from reaching American companies.
He said in an invitation: “Economists in the European defense industry, the very specialized nature of what is being built, and the need to maintain the group corresponds to NATO criteria and the intermediate operation with American systems, which will remain in Europe – it seems that all of this indicates that a good part of it can be directed towards the United States.”
“Adania” made the deal
Even if it is possible to solve the abilities and supply chain problems, American companies can make strategic movements to avoid closing from the increasing source of capital in Europe.
“You have a position in which the United States still has a large budget, but it is likely that it does not grow as soon as it has, and the dynamics moved from larger platforms to smaller and more intelligent companies,” said Farmer, who leads BGL activities in the air services, defense and government services sector.
“While you go to Europe, there is this huge opportunity – the budgets change, there is a great opportunity to increase the investment in the capital there. So I think it is likely that you see some of the somewhat decent size acquisitions in Europe.”
He pointed out that the American defense companies will be “somewhat aggressive” in following up deals with their European peers.
Leonardo, Rolls Royce, Airbus, BlatantFarmer said: “All these opportunities that have great opportunities in front of them, and so I think you will see American companies conduct talks with all these people. Is there an opportunity for us to make an investment in a company, is there an opportunity for us to eliminate this work to reach this market?”
