Stable investment in Defence, a way of crying in the wilderness

It is not the first time they have expressed it in public, nor will it be the last. A select group of leading figures in the Spanish defence industry, one after the other, have just called, without openly expressing it, for Parliament to pass a law setting up a multi-annual budgetary framework that will give stability to public investment in defence.

The demand was put forward by senior executives from five of the most important companies in the sector: Ricardo Domínguez, president of the public shipyard Navantia; Javier Sánchez Segura, executive vice-president of Airbus España; Ignacio Mataix, CEO of Indra; Luis Furnells, executive president of Pesia; and Miguel Ángel García Primo, general manager of Hisdesat.

All of them took part as speakers at the IV Defence Industry Forum which, in order to exchange points of view on national technological sovereignty for the economic reactivation of Spain, brought together business leaders from the sector and senior officials from the Ministry of Defence, whose head is the magistrate Margarita Robles, in Madrid, both in person and by telematic means.

As was to be expected, the issue of the multi-year investment calendar for financing weapons systems and military equipment - a way of guaranteeing the sought-after budgetary stability - and setting the priorities of the Armed Forces came up in the presentations and debates, an issue that is not new. The issue has been raised within the Ministry of Defence for several decades, and the hackneyed political reasons have ruled it out year after year. 

The issue comes up every time defence industrialists have a chance to be heard. Whether it becomes a reality or not depends on the survival of many industries. The technology they are tasked with developing for new weapons systems is increasingly expensive, the investments to be made are very high, and in Spain there is no guarantee that national military programmes will have continuity. But in Defence, business as usual. And in the Moncloa Palace, like the man who hears the rain. 

The executives who are making the demand do so in their own way, each in their own way. Some vehemently, as in the case of the executive president of Oesía, Luis Furnells, a private company whose Tecnobit company specialises in cutting-edge electronics, electro-optics and tactical communications. Others put it with exquisite caution. This tends to be the case for the heads of companies in which public entities have a stake, or whose profit and loss accounts depend to a large extent on direct contracts or agreements awarded to them by the Ministry of Defence.

At the aforementioned Forum, the first to raise the issue was the aforementioned Luis Furnells, who stated that "behind the words there should be something else that has economic repercussions, such as investments framed in a multi-annual plan". He backed up what the Secretary of State for Defence, Esperanza Casteleiro, had said a few moments earlier, without making any commitment. 

The head of the Ministry of Defence's armaments, material, research and industrial innovation policies had expressed as conclusions to her opening speech that "national sovereignty in defence has an industrial component that must be protected", a statement that was to be applauded. He then went on to say the cryptic phrase "we are talking about the necessary budgetary stability and the need for investment in the defence industry". No word on when, how and in what way, although perhaps she is working to achieve this.

Ignacio Mataix, CEO of Transport and Defence at the technology multinational Indra, also alluded to the issue. He pointed out that in order to boost the defence industry it is necessary to "give it value" and to have "funding and financing stability" that provides the capacity to better structure companies, invest and develop technologies. 
 
Miguel Angel García Primo, director general of Hisdesat, the Spanish government's satellite services operator, expressed himself in the same vein. He stated that "it is no use if in one, two or three years' time we are at 2% of GDP in defence investment, as NATO is asking us to do, and two years later we are down to 1%". He stressed that it is essential to "grow and get more support", but that it is "fundamental to achieve sustainability of investments".

The representative of Airbus Spain, Francisco Javier Sánchez Segura, stressed that the technological capabilities of the collective "always" are long-term and take years to develop, so "we need long-term policies". The president of Navantia, Ricardo Domínguez, also spoke on the subject. "We all demand a stable budgetary framework over time, which allows us to plan, invest in R&D and not lose intellectual capacities, human resources or materials". The Secretary of State was present throughout the Forum organised by the newspaper El Economista and listened unperturbed to the requests and reasoning of the speakers.

She will surely be envious of what is happening in other countries, for example in France, with multi-year laws to equip its armed forces dating back to the 1970s. It was President Georges Pompidou who activated a system of military investment planning, echoing the plans of his master in office, General Charles de Gaulle. Years later, Jacques Chirac renamed the system the Military Programming Law, which now covers investments scheduled for six years - in this case for the period 2019-2025 - and updates every two years. 

So what makes it difficult in today's Spain to enact a law that brings stability to defence investments? Quite simply. It is well known that in order to push through the General State Budget, any type of law or a major institutional project, the coalition government presided over by Pedro Sánchez requires the parliamentary support and the votes of its allied parties of the extreme left, the anti-system and Catalan and Basque pro-independence parties.

All these political formations "don't give a damn" about military affairs, they are "repulsed" by everything that smells of the defence industry. In particular, they despise anything that would mean an improvement in medium- and long-term funding for obtaining and sustaining the Spanish Armed Forces' weapons systems. This is what seems to be evident from the behaviour of most of their deputies in the Congressional Defence Committee, where they have not been seen to be at their best.

Minister Maria Dolores de Cospedal wanted to activate a multi-year funding mechanism during her time as head of Defence (2016-2018). She excused herself on the grounds that she wanted to obtain the approval of the then main opposition party - now in power - and that the negotiations did not bear fruit. And yet in Spain there is the precedent of the 1982 Endowments Law, with which President Leopoldo Calvo-Sotelo provided financial stability to military acquisition, maintenance and replacement programmes between 1983 and 1990. So Spanish defence industry executives will continue to cry in the wilderness, per secula seculorum. But let them keep trying, who knows?