Although the expression appeared during the First World War, it no longer has the same meaning today. Above all, it reflects the desire of the executive to “move up a gear” in terms of defense.
The war in Ukraine at the heart of the French political agenda. On Wednesday March 6, Emmanuel Macron met former presidents Nicolas Sarkozy and François Hollande to talk about the evolution of the conflict and the aid provided to kyiv. Thursday, the Head of State brings together the leaders of the main political parties at the Elysée to discuss the situation in Ukraine, before a debate and a vote in Parliament.
The oppositions recently criticized the comments of Emmanuel Macron, who did not rule out the eventual sending of Western troops to Ukraine. For almost two years, the French president has also insisted on the importance of “war economy” in France and Europe, to better support kyiv and respond to Vladimir Putin. “A Russian victory is the end of European security,” he warned during his greetings to the armies on January 19.
“France has a meeting with its defense industry, an industry in war economy mode.”
Emmanuel Macronduring his vows
What does the concept of war economy mean? What meaning does it have today with the war in Ukraine?
A reversed logic
Behind the declarations, the notion of war economy has a very precise historical definition. “The war economy is the radical mobilization of all the economic resources of a nation in favor of a war effort”recalls Olivier Kempf, associate researcher at the Foundation for Strategic Research.
For this expert, such an economy implies “a transformation of the production apparatus” both agricultural, industrial, human or logistical “towards the production of resources for war”. The objective is therefore to manufacture ammunition and weapons, but also to provide, for example, food to the armed forces mobilized in combat.
The war then shakes up the economic model in place. “We are completely changing the traditional logic of the relationship between States and companiesnotes Renaud Bellais, co-director of the Defense Observatory at the Jean-Jaurès Foundation. We are in an organizational logic, not a commercial logic. Because we have an urgent problem: the need for a large quantity of equipment, quickly.”
“We are moving away from a traditional market economy with the planning of the war effort.”
Renaud Bellais, specialist in defense economicsat franceinfo
The State must therefore “ensure that economic actors are well coordinated” to meet the needs of the front.
A dated concept
The expression war economy was born during the First World War, before being developed over the decades that followed, points out economist Eric Monnet in The world. The concept evokes a mode of production, but also limited consumption “to manage a shortage imposed by circumstances” And “to develop forced savings intended to finance the war”. Such a model, specific to the context of the great conflicts of the 20th century, however, seems to be a notion of the past.
“Today, no one is really there”, confirms Olivier Kempf. A country at war like Russia dedicated 5.8% of its GDP to defense last year. This year, it must increase this effort to 7.5% of GDP, according to the International Institute for Strategic Studies. NATO member states are very far from it: 18 of them (out of 31) will cross the threshold of 2% of GDP dedicated to defense this year. In the United States, military spending represents 3.5% of GDP, compared to up to 37% in the middle of the Second World War, according to Renaud Bellais.
So what exactly does Emmanuel Macron mean when he insists on this need for a transition to a war economy? The Head of State’s remarks on “an entry into a war economy”during his speech on defense industries on June 13, 2022, made an impression.
“It’s first and foremost communication. It’s an expression that captures the imagination and can be used to mobilize minds.”
Olivier Kempf, associate researcher at the Foundation for Strategic Researchat franceinfo
“The current notion of war economy has little, if anything, to do with what we have known in the past, continues the expert. It’s about saying that there are strategic issues that are emerging: we perhaps need to change our order of priorities, spend more on defense, reindustrialize it.”
This discourse is also spreading across Europe, against a backdrop of a possible decline in American aid to kyiv. Donald Trump’s recent comments on NATO have acted as a new electric shock. The former president, who aspires to return to the White House in January, warned that Washington would not come to the aid of a NATO member state attacked by Russia, if it judges that this country is not spending enough in terms of defense. “We need to go into war economy mode for the defense industry, to be able to provide Ukraine with what it needs and for our own security”supported Thierry Breton, European Commissioner for the Internal Market, on franceinfo.
An investment in defense
When Emmanuel Macron and the former minister talk about a war economy, they imply “industrial rearmament”deciphers Renaud Bellais. “It’s a start, a preparation to be able to react” in the event of conflict, specifies the researcher. It’s about “to change the scale and pace of the defense industry”, in the background for decades in a post-Cold War context.
“We have to relearn how to work more quickly, speed up the pace to do more and faster.”
Renaud Bellais, specialist in defense economicsat franceinfo
In a report on the “war economy”, Horizons MP Christophe Plassard readily recognizes that “our military and industrial model, marked by several decades of budgetary arbitration, is not ready for a major confrontation.” The rapporteur issues his recommendations and calls, among other things, to give visibility to the defense industries, through public orders. It is also necessary, in the opinion of the elected official, to secure supplies, ensure strategic stocks and “break with the logic of just-in-time flows that prevails today”. Access to finance for defense companies, particularly SMEs, is crucial, he adds. The MP nevertheless notes the budgetary effort undertaken by the government: the Military Programming Law (LPM) 2024-2030 provides for a defense budget of 69 billion euros in 2030, compared to 32 billion in 2017.
But the issue is also, and perhaps above all, European. For Pierre Haroche, lecturer in international security at Queen Mary University of London (United Kingdom), the entire continent must “return a little to a war economy”. In terms of defense, “we must be able to spend together (…) speaking with one voice, he recently explained to franceinfo. The challenge is pooling and economies of scale. It will be much more efficient to spend money collectively. (…) We then structure a defense industry, which knows that it has long-term visibility.”
Actions have already been launched, such as increasing ammunition production within the EU, even if deliveries promised to Ukraine are behind schedule. Other options are on the table, such as joint borrowing of around 100 billion euros for European defense – a proposal from Estonia. On Tuesday, the European Commission presented a plan to strengthen the EU’s defense industry. Measures for “step up a gear”explained Thierry Breton.