European defense spending falls by almost $4 billion in 2009
Defense spending by European countries will have fallen by nearly $4 billion (1.3 percent) in 2009; overall, defense spending of European nations will fall to $302.56 billion in 2009: down from $306.54 billion in 2008
Defense spending across Europe will have fallen by almost $4 billion (1.3 percent) by the end of 2009 as the financial downturn bites, Jane’s Industry Quarterly analysts have concluded. The Czech Republic, Estonia, Finland, France, Germany, Greece, Italy, Latvia, Lithuania, Poland, and Spain are all expected to see declines in military spending during the current calendar year.
The United Kingdom announced the strongest nominal rise of all European countries in 2009: defense spending overall climbed $1.4 billion to $75.75 billion.
Overall, defense spending of European nations will fall to $302.56 billion in 2009: down from $306.54 billion in 2008. IHS Jane’s forecasts that the combined military budgets of the continent will then bounce back; increasing 7.75 percent to $326 billion by 2013.
Tough times lie ahead for Europe’s defense industries, however, as procurement budgets are expected to decrease by 4 percent in 2009 to $52.89 billion (2008: $53.15 billion). This is due to shifting national priorities toward preserving jobs and maintaining current capabilities at the expense of investment in new program.
The economic situation facing European nations and the impact on budgets is examined in the latest Jane’s Industry Quarterly, “Ever Closer Union: The Outlook for a European Defense Industrial Base.” The study highlights the dysfunctional nature of Europe’s defense industrial base and the fractured markets.
Guy Anderson, editor and lead analyst, explains, “It is misleading to speak of either a European defense industry or a true European defense market. Neither exists as of 2009.”
Jane’s Industry Quarterly considers the potential for the development of a unified European defense industry and market, and for the removal of the barriers which have allowed the military and security sectors to remain apart from the free market rules of Europe. “Europe is facing factors that may bring about lasting change. These range from legislative reform, which is edging its way to national statue books, to the new realities of tighter spending in an era of relative austerity,” Anderson concluded.
