A phalanx of soldiers wearing bulletproof vests and wielding machine guns fanned out beneath the Eiffel Tower in Paris on a recent afternoon, scanning the crowd for potential terrorist threats. Across the nation, about 10,000 more armed troops patrolled streets around landmarks, stores and government buildings.
France is spending about 1 million euros (US$1.1 million) per day on the heightened security, part of a renewed surge in European military spending as governments declare terrorism a permanent risk.
Europe’s current approach to fighting terrorism, after two deadly assaults carried out by Islamic State militants in Paris last year, represents a shift from the austerity mantra that has dominated the region since the debt crisis in 2010. While nations are not abandoning their fiscal discipline, leaders are encouraging a more flexible approach to give them financial firepower to counter the growing threat.
Illustration: Kevin Sheu
“We need to track the terrorists, dismantle their networks, cut off their financing and stop propaganda and radicalization,” French President Francois Hollande said recently, after declaring France “at war” with terrorism.
“The security pact takes precedence over the stability pact,” he added, referring to the EU’s rules limiting member nations’ deficits.
Although austerity has been losing favor as a cure-all for Europe’s economic ills, a renewed financial crisis in Greece last year kept a focus on belt-tightening. European leaders threatened to let Greece exit the currency bloc if it did not stick with the budget cuts and economic overhauls required for a new bailout. EU officials admonished France and other nations for failing to meet deficit reduction pledges.
Now, European leaders are acknowledging that security spending is a priority. After the attacks by the Islamic State in November last year in Paris that left 130 dead, European Commission president Jean-Claude Juncker authorized France to receive special treatment under budget deficit rules to strengthen security programs.
“We are facing serious terrorist acts,” he said. “France, as other countries, has to have at its disposal supplementary means.”
The spending has the potential to provide a much-needed stimulus boost to a region that has struggled for years to kick-start growth.
France, Germany, Britain and neighboring nations sharply curbed military outlays while austerity was enforced. Since 2007, Western European military spending has slumped more than 13 percent, accelerating a decline that began earlier in the decade. As of last year, only four European NATO member nations met the mandated military spending target of 2 percent of GDP.
As security concerns intensify, the trend is reversing.
Germany is hiring more police and intelligence officers and last month the German Minister of Defense Ursula von der Leyen proposed increasing military spending by 130 billion euros over 15 years.
The government might also divert part of its 12.1 billion euros budget surplus to managing the wave of refugees flooding into the nation.
France is expanding its military equipment arsenal, troops and police, as well as increasing surveillance and spending hundreds of millions of euros on new programs to counter radicalization among Muslim youth.
In Belgium, where militants planned the Paris attacks after training in Syria, nearly half a billion euros is to be spent jailing returning militants, reinforcing borders and keeping hundreds of troops on the streets.
And Britain recently authorized £12 billion (US$17.4 billion) in new spending to purchase Boeing P8 maritime patrol aircraft, increase fighter squadron numbers and create new strike brigades.
“We can’t exclude a new attack — no one can,” French Minister of Finance Michel Sapin said. “Here and elsewhere, the risk is present. We need to fight against the origin of this instability.”
Total western European military spending, led by France, Britain and Germany, is expected to jump by an extra 50 billion euros through 2019, to 215 billion euros, said Fenella McGerty, an analyst at IHS Jane’s Defence Budgets in London.
Europe’s security spending, though, would still pale in comparison to that of the US.
Even so, the shift could prove a windfall for security, military and arms manufacturers.
As the austerity mindset took hold, Europe’s big military suppliers quickly felt the pinch. Contract negotiations with government procurement agencies stalled or orders were scaled back.
Some companies, like Airbus Group, downsized their military business.
In 2013, Airbus Group announced plans to cut 5,800 jobs from its military and space divisions and to focus primarily on a booming commercial jet business.
Now, European armies are growing. In a reverse from planned cuts, France is preparing to add 23,000 positions to its army by 2019. A coalition to fight the Islamic State that includes France and Britain is to soon intensify the campaign against militants in Iraq and Syria, prompting additional spending on missiles, drones, jets and surveillance.
Airbus is well positioned.
The company supplies European militaries with a broad range of flying hardware, such as the NH90 helicopter, the A400M cargo and troop transporter and the A330 multi-role refueling tanker. Airbus also has high-tech satellite surveillance equipment as well as integrated border and coastal security systems, a particular focus in Europe as the migrant crisis swells.
“We need more cooperation and integration in foreign policy, in defense, in security policy — and by security I also mean, obviously, internal security,” Airbus chief executive Thomas Enders told reporters recently, citing the failure of some governments to adequately track and monitor potential militants traveling across Europe’s internal borders.
In addition to new equipment, much of the increased spending is to go toward closing intelligence and security gaps that have permitted Islamic State militants to travel through Europe and plan attacks.
France, Germany and Britain are hiring thousands of new intelligence officers and upgrading surveillance equipment and software for monitoring communications, especially on the so-called darknet of encrypted networks that terrorists use to communicate and recruit.
British Prime Minister David Cameron, who is now reversing years of military cutbacks, has authorized Britain’s creation of a new National Cyber Centre to track militants.
At the same time, private corporations and big cities alike are ramping up surveillance spending.
In the days after the Paris attacks, Securitas, a leading provider of security agents in Europe, was swamped with calls from department stores, museums and other outlets scrambling to hire thousands of guards and intensify screening. Securitas, which already had 16,000 agents in France, could provide only 800 more and has since accelerated hiring to meet demand.
At Visiom, a French maker of metal detectors, orders have jumped fourfold since the Paris attacks, especially from sports stadiums, concert halls and large stores.
French companies are expected to spend an additional 500 million euros this year for agents, while security firms and police departments are to increase orders for everything from bulletproof vests to drones, said Patrick Haas, the director of En Toute Securite, one of the largest French security firms.
“What has changed after the attacks is that authorities now realize the threat is permanent,” Haas said. “We are facing a radical shift.”
Additional reporting by Nicola Clark
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