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tv   Business Beyond  Deutsche Welle  June 19, 2024 1:15am-1:31am CEST

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is from berlin, that's all for now. don't forget, the website is april, the latest at any time you need it. likewise, i'll social channels on instagram and x. the handle, the nature of both of those is at the definitely need somebody to me how to learn from me and the team here. it's good bye. for now, the ukraine was like a stepping point. you know, 5 what you into that warranty wants to finish your studies. now you have a certificate from the train. you can just go back to somewhere else. currently more people than ever on the move in search of a pass in life. gag. we've something that is coming very very soon. and yeah, can we learn more about or know when a story info, migraines? this is europe's battle tank of the future. but only on paper right now. the main ground combat system or in g c. s. should both drones and more firepower than its predecessors. the german low part and the french looks at germany in front of
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building the n g c s. together. but they struggle to figure out who is going to build which part. and actually, that makes sense. just consider the main gun of the m g. c. us, one of the partner firms, french company next, or has a 140 millimeter gun, the escalade, another partner german manufacturer. ryan montalvo has its own new guns for 130 millimeter barrel. whoever gets their weapon onto the m g. c. s should have a guaranteed production line for decades to come, giving them an advantage in other markets. european countries want to work together on defense for cooperation can be hard. no country wants to disadvantage its own industry. and that is the basic tension that's been undermining european cooperation for decades. the question now is that changing? there's a war on europe's doorstep. defense firms are flushed with cash and their points to expand. the governments meanwhile,
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could benefit from the lower costs that come with common production and ordering and the you is eager to encourage even more joint projects. europe is arguably facing the most serious on conflict since the beginning of the you can the world's largest single market, figure out how to become a single market for defense that's coming up on business beyond the european union as a block of $27.00 countries and a single market, the goal is fair competition across borders. so as a business you should be able to compete on a level playing field wherever you want in the you, regardless of national borders. the thing is national supply chains, diehard, and europe is still crowded with them for defense. market principles tell us that firms should compete with one another in the absence of trade restrictions. forcing some businesses to give way to others. but the customers for defense products for
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government, about households, and they have other priorities than just probably the most obvious, national security defense is left to e. u. member states who decide which capabilities they need and where to procure or essentially order them. and they're heavily invested in domestic companies. literally, in some cases, many defense firms are either owned or partly owned by the state mean, or basically be a tokens here about a sector that is deeply into twines with the national armies, with the national to defend strategies. going to involve as a defense analyst at the think tank approval and brussels. so the senior market logic that we have for um, all the other products. so cost for ever seeing is, is to one way or uh, you know, basically, um, there is a market which is your pin market. it's not a national market anymore. but that is different for to defense products because of
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the security nature of these products. in other words, member states are still largely organized around their home ground defense industries that kind of local preference actually goes against the aim of the single market. in the end, you does have rules prohibiting it. but with defense, it's different. a block of text dating back to the earliest you treaties, carbs out, an important exception to competition rules for defense. article 346 allows member states to veer away from the rules to protect their security interest as related to arms and munitions. for example, member states can limit who gets to bid on big defense contracts if they need to move fast or for example, or protect their own defense secrets. but that makes sense, right? consider the trends or for a nuclear submarine like from france. no one can really expect paris to share the specifications for such as sensitive technology. after all,
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those are state secrets. but how about a contract to supply turn tables? that was a real case out of finland in 2008, a 1600000 euro defense contract for record players use for so in our training for naval forces at the finish government pointed to article 346 when one of the companies that last out soon, the article has since become the tories in the in you, instead of protecting secrets, it became away from member states to avoid fair competition rules. countries can protect their chosen industries, including the defense. the courts of pushback your sized court overturn the turntable case and has tightened its reading of article 346, but never states still have considerable leeway. we don't have a call in the european security and defense policy so far. tons, crystal for us podium is head of the german defense industry association. it lobbies for the countries biggest defense players. we have governments which are very much
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oriented in order to support their own industries as a metros to pull up ladies, so to speak. in 2020 germany put the procurement of tea defense technologies under protection of article 346. that should have been a boon to local industry. but berlin has become more reluctant to use that exception. following recent court rulings, german industry is meanwhile, still steaming, about a major procurement given to a dutch firm several years ago. roughly 6000000000 euros for, for new frigates to the ship builder dom and we have been giving our biggest free, good order sofa to a dutch contractor, which is of cause in line with the idea of you being competition. however, none of the big other european countries having its own naval industry, would have done that in the, in the costs of $27.00 separate defense policies and their national preferences.
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add up. you members spent 240000000000 euros on defense in 2022. a recent studies found the block and save as much as 75000000000 euros. if countries just bordered and procured more equipment together. cooperation is hardly the norm . however, the uses less than 20 percent of procurement is done collaboratively. that's well, sort of its own goals. so that means at the end of the day, we have more companies, more diversity in the products then is actually need it from a purely military perspective. it doesn't help that year if it's under funded defense in recent decades. so not only is capacity scattered, but it takes a lot of resources just to get that going. again. the consequences of this have become painfully apparent over the past 2 and a half years. just take the production of the 155 millimeter artillery shell. it's
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a common munition produced by multiple manufacturers across europe. but at the start of the war that you lacked stockpiles and it lack capacity to produce more at scale. brussels failed to ramp up production, promising 1000000 shells for ukraine by early 2024. but never states fell short. another problem is that there are slight production differences for the 155 millimeters shell across europe. that makes it less likely that any one manufacturer would get a large enough order to cover the costs of expanding production with their own manufacturing. still ramping up, you members have increasingly purchased shelves from outside nations. it's a political mind feel trying to consolidate europe's fragment. the defense industry, but if you can't be your rival, or in this case, acquire them. maybe just join them. for decades, some of your biggest defense companies have been trying to work more closely on big ticket. military platforms like takes aircraft, missiles,
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larger programs that can take decades to come to fruition and are often subject to big cost overruns. with member states procure alone, it's often more expensive that it risk duplicating work across the u. one assessment from 2017 found that europe had almost 6 times as many different weapon systems as the us, the products of so many national programs. it's not new every week and i'm kind of discussing this with decades. tim lawrence and is a consultant in the defense industry as an analyst at the international institute for strategic studies in britain he says the problem with joint projects is that past efforts often haven't gone well. some have been almost disastrous. lots of corporations which either shy, would still even finish or delivered product, but it's been, i, those products not great or the products actually don't bad. but the, the cost of getting that was really,
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really painful procuring together should allow countries to spend big together while keeping costs low for each individual participant. sometimes just it ends up being the revised cost comfortable. take the e 400 m atlas may buy air bus. it's a heavy lift there for military personnel, goods and vehicles. a group of european countries turn to air bus to make the atlas based on each country's wish list. the cost balloons nation is considered exiting the program early into air bus, rudolph billions and fees a, it's not a service, it says maybe it's not a bad address, but it cost an option. a quote seem to get the next day that you'd never do that right again. then there's the euro fighter, the combat jet as a joint project between the u. k, spain, germany and italy. and now has nearly 700 aircraft. them order a positive sign. but it also had a difficult birth. the u. k. later calculated that the cost per unit had risen a whopping 75 percent from original plans. these programs basically have one thing
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in common. they've all struggled to balance the requirements of the very stakeholders, and in the case of the euro fighter, it was difficult to divide the work in such a way that everyone thought it was fair. and that's a problem also faced by the m g. c. s. our battle tank from the beginning of the video, both sides of needed years to come together on a division of labor. ultimately, the german and french defense ministries had to get involved. in april, they formerly signed off on an agreement, though it's still unclear who gets a cannon, or if that's even been decided, you start with, do we have a really common view of mt decline? it should be? do we have a need? does it look similar enough that we could actually come together that not necessarily identical, but we, we could sort of writing these things together. but there are also success stories in joint projects. in b d a is a missile consortium run by prime contractors out of the u. k. in italy as well as
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the pen european firm air bus. it came about through a hodgepodge of european ty, ups and acquisitions over more than 2 decades. what sets it apart, corporate governance, the board of directors are appointed by each stakeholder. but they're widely seen as working together on behalf of the company and not their parent countries, the n b, da's products, missiles like the taurus and the media can be used on multiple platforms across europe. and that'd be the, i is, is the most consolidated and defense company in europe. and by which i mean it's, it's gone further across the board con company to try to, to avoid ending up as yourself do with these such side quote, single companies to try and avoid duplication. in b d a is a good example of what the you want
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a truly fuse company that serves multiple in users. the process has been incentivizing joint procurement for decades with not very much to show for it. now it has new plans to go further than before. brussels is earmarked to 1000000000 euros between 202-2272 help cover some of the costs of joint programs. it's also set up new, measuring sticks by 2030 brussels wants defense trade within the u to rise to 35 percent of the total value of all defense spending. it also wants member states to procure at least 40 percent of military equipment collaboratively. but the same year analysts say that while that commitment is a step in the right direction, it's still not enough money. and another hitch. the plan also leaves out the u. k. traditionally, one of the concepts, biggest defense partners and the questions will not find it right, but nobody on with it. would it really change the part on that mean a corporation becomes the norm for all the barriers cooperation sufficiently big
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that that still wouldn't be enough. let's say you want it to build a european defense industry from scratch. it probably wouldn't look like what we have right now. maybe you would have a better division of labor and say the french could build airplanes and the germans could build tanks. but again, that's not where we are right now. the use trying to create a more streamlined industry of one that still quite fragmented. and countries are spending more ordering together and encouraging more cooperation. defense firms are growing and looking to expand. but until they break through political hurdles, they'll struggle to make the biggest headway that, of course, leads back to a bigger fundamental question. can you ever create a single defense policy? 1027 different nations ever create a single defense policy. one thing is clear to war and ukraine has given the confident, new motivation. how far will that take it?
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that's all for this episode. we thank you for watching and we'll see some, the secrecy. think sales if the king of fruits assuming in china the cooling time on co could a common tax help costs fossil fuel and creative deception. the u. s. officers to full the number the she was.

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