Is France in a war economy?

If our entire economy is not focused on war, we observe that with the hardening of the conflict with Russia, particularly in recent days, the government is starting to think differently.

Initially, France believed it could help Ukraine with stocks and counted on the United States, but 24 months later, it realizes that that is not enough. Since January, American aid to Ukraine has been decreasing, there is even the threat that it will stop if Donald Trump comes to power in the United States in November 2024. To summarize, according to several experts, we are moving from a war of stocks to a war of industrial capacity.

Which means, first of all, producing more. And France is already producing more: the war in Ukraine has boosted the activity of French defense companies. They are many : big ones like Nexter, Dassault, Airbus, Naval Group, Thales or Safran, but also many start-ups and SMEs. Some industrial sites are getting a new lease of life, such as example, the powder factory, Eurenco in Bergerac. This company, 100% owned by the French State, heir to the National Company of Powders and Explosives, which makes explosives, dormant in recent years, is now in full swing. It is overwhelmed by demands, with a full order book until 2028.

Defense budget increased by 40%

But the challenge is also to produce faster in reducing the cycles between the time of order and that of delivery. And in France, we have already accelerated the pace a lot. To build the Caesar cannons, for example, we went from 30 months to 15. In 2022, France was capable of delivering 1,000 shells per month, in 2024, it is three times more. But, despite this effort, the Europeans will be unable to provide the million shells promised to Ukraine by the end of March.

Finally, financial means are also needed. In recent years, the government has significantly increased the defense budget. 413 billion euros of investment are planned in the military programming law for 2024-2030, i.e. 40% more than the previous text. And if the executive announced additional savings of 10 billion euros, the army is one of the ministries preserved. And Emmanuel Macron announced three billion euros in military aid last week additional for Ukraine, but the amount could be higher. Next Monday, he is organizing an international meeting and on this occasion new funds could be released.