Franco-German Defence-Industrial Relations: The Evidence Points One Way
(Source: Defence Analysis; posted March 03, 2022)

By Francis Tusa *
France is continuing to expand its technology portfolio for the SCAF/FCAS next-generation fighter. As part of Project Turenne, DGA is testing a new generation of components such as high-pressure turbine blades and ceramic and metallic materials for its future engine. (DGA photo)


Signs are that the Franco-German defence relationship, and especially the defence-industrial relationship, may be heading for the rocks. There are numerous data /information points that all seem to be pointing the same way, and the list is getting longer. And the issue at the heart if this is two-fold: first, the “Franco-German political elite” just cannot see what is happening; second, German industry and the Bundestag also cannot see which way the wind is blowing, and still believe that France needs them.


LONDON --- The most recent piece of information came from Germany’s MTU, and the 2021 results briefing. Almost as an aside, The Chief Executive and Chief Financial Officers both said that getting a signed industrial agreement about the engine for the Franco-German-Spanish SCAF fighter had slipped to at least the middle of the year, and that “we are just waiting for this for the agreement between Airbus. And so, once that has been finalized, I think then we expect the contract to be signed”.

That this agreement/contract over the engine had been expected by the end of 2021, and is now delayed with hopes of something in four to six months, shows that delays are being piled on delays. And if there is a de facto six-month delay, then what does this do for the first flight of a SCAF demonstrator? This has gently slipped from 2025 into a more likely 2027, and this even before the current delays.

But although MTU might be shrugging its corporate shoulders, saying, “it’ll happen, just a bit later than planned”, they do not seem to have looked across the Rhine at what is happening about the SCAF engine there. An 11 January [press release] by the Direction Générale de l’Armement, France’s procurement agency, concerning “a major test for the development of the engine for the future fighter, SCAF”. These tests, as part of a five year-running programme, saw new ceramic materials added to the M-88 engine that powers Rafale, creating a digital picture of the engine for future development work, and the use of new additives. Basically, sitting on hands to the East of the Rhine – full speed ahead on the West of the river.

Basically, even if the contracts between the industrial entities are not getting signed off, work on a variety of technologies for – initially – Rafale are being accelerated. And this is important, as one of the core disagreements between France and Germany over SCAF is that of intellectual property. Germany says that IP brought into SCAF must be shared – France says that it will not hand over vital IP that might/would undermine its industrial position to design and build fighters (or any defence technology, for that matter).

And each day that passes without core agreements over SCAF, the IP being created in France is rising, and this issue will become ever thornier – and it looks as if France has really dug its heels in over this, as evinced by comments made by the French Defence Minister, Florence Parly, to the National Assembly.

Although the current news is about the engine for SCAF, there are weekly press releases from French companies about similar work being done in their technology areas, and the issue that France is working, today, on advanced SCAF technology isn’t really understood in Germany. Defence Analysis will repeat something that we’ve written before: on the back of the UAE deal, and even before the Indonesia deal (see later in this edition), Team France no longer needs German money or offtake to make a success of SCAF in whatever form it takes (Defence Analysis increasingly sees SCAF as starting as “Rafale Plus”, then morphing into a new fighter/bomber aircraft). With likely other Rafale exports, there will be a hot Rafale production line to the mid-2030s – Team France is now extremely comfortable in this respect.

Rafale Has Cost France €47 Bn and has made €52 Bn worth of exports

A lovely factoid: Rafale has cost France, in all respects, €47bn – it now has €52bn of Rafale exports, so the programme has really paid for itself, and this is before extra exports. How many of India, UAE, Qatar, Egypt, Indonesia would Germany allow SCAF to be exported to? Exactly. With good marketing (seen on Rafale), France can pencil in 300+ exports of SCAF, maybe even more. What would Germany’s SCAF offtake be? Well, Typhoon looks like gross 225, net 175–180, so probably less than these totals.

France doesn’t need Germany now ....

But as far as Defence Analysis can see/tell – and we have been talking and reading widely around Europe – the new equation of the balance of power over SCAF is not understood at all in Germany, or the bilateral elite. The view of the latter is that there have always been tiffs, but it is impossible to consider a situation where there isn’t intense defence cooperation between the two. In so far as such an analysis goes, this might be true – but it fails to take into account of the breach of good faith in Germany over the 1970–71 Schmidt-Debré Accord, which promised that over cooperative programmes, one side wouldn’t veto exports made by the other, for starters.

Add in recent German rebuffs of defence cooperation such as buying its own missiles for Tiger attack helicopters, rather than work on a bilateral solution; buying P-8 MPAs, instead of a future cooperative programme; looking to buy the AH-64E as opposed to upgrading Tiger; trying to dominate the Main Ground Combat System, pressing for German industrial solutions above cooperative ones. Germany has given France few, if any reasons to continue what is seen in Paris as a more or less abusive relationship.

And the real worry for Airbus is that even if it feels that France flouncing off over SCAF might actually be a gain, the future for the company is far less sunny. “We’ll just join Tempest!”, comes the cry. Really?

The reasons for not allowing Airbus (or any German company) into Tempest are legion. First, the export issue is enough for any sane person not to want Germany involved – and this is widely mentioned in the UK Tempest neighbourhood. Oh, and promises to not ban exports are pretty thin when one sees what happened to the Schmidt-Debré state agreement – the scorpion doesn’t change ....

Second, Tempest isn’t a programme “ruled” by the UK – it is a collaboration. London can’t, on its own, invite Germany/ Airbus/MTU to join – there has to be agreement with all the partners, be it the Italian and Swedish governments or Saab/Leonardo. And Defence Analysis hears that neither Saab nor Leonardo is keen on any German participation. So, there’s no Plan B for Airbus/MTU/Hensoldt in Tempest, and certainly not on the basis of being equals.

Finding a graceful way out

How will things play out? How will President Macron (who looks a certainty to win the April Presidential election) manage to ditch Germany, without looking as if he is the “Bad Guy”, and that he is still a loyal European? To Defence Analysis’s eyes, there are two ways he can do this. The first is simple: if Berlin says that it is buying F-35A for the nuclear delivery role, Paris can bluntly say, “you can’t say you weren’t warned: buying F-35A is the end of our cooperation on SCAF.

We’ve made this clear endlessly”. The second is a little more subtle .... Once German parliamentary business returns to normal, with all coalition agreements concluded, Paris just waits for the Bundestag Finance/Defence Committees to start to throw their weight around. After all, the belief in Germany is that France needs German money for SCAF – which as Defence Analysis has shown above, is now not true.

And in the face of what will likely be pretty brass-necked demands, it will be very easy for Paris to say, “Enough! We’ve had enough!”

Oh, and Germany saying to France, “If that’s how you want it, we’ll now buy F-35A, and sucks to you!”

Good job: you’ll have just killed your military aerospace industry, well done. Germany’s hand of cards over SCAF was already quite weak, and suddenly looks non-existent.

Sadly for Germany, unless it accepts that France is in the ascendent over SCAF, it will have no options.


* Francis Tusa is editor of Defence Analysis


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