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French CEOs Seek Meeting With Hollande Over Budget Cuts

May. 16, 2014 - 03:45AM   |  
By PIERRE TRAN   |   Comments
The heads of seven French defense companies have asked for a meeting with French President François Hollande in order to lobby against potential defense cuts. Here, Hollande, left, escorts European Council President Herman Van Rompuy at the Elysee palace on May 16. (Alain Jocard/AFP/Getty Images)
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PARIS — The heads of the seven large French defense firms have written to President François Hollande to ask for a meeting to lobby against expected spending cuts, despite the ink being barely dry on an updated military budget law.

Chief executives of Airbus, Dassault Aviation, DCNS, MBDA, Nexter, Safran and Thales wrote a letter Thursday to express concern that a promised ringfence was about to crumble. Defense News viewed a copy of the letter.

The companies are responding to a week of media reports that the Finance Ministry has won the prime minister’s support for cutting €1 billion (US $1.37 billion) from the annual €31.5 billion defense budget.

“In view of this threat, we are once more obliged to ask for your intervention and to request a meeting,” the CEOs wrote.

Hollande met the company heads April 15 last year, as requested by the CEOs. They sought presidential arbitration when the Finance Ministry had planned on slashing military spending in efforts to balance the budget.

“You guaranteed then a complete execution of this [military budget law],” the joint letter said. “Despite that, short term considerations today threaten to disrupt this delicate balance.”

“Yet nothing has changed in a few months on the dramatic consequences that would flow from any departure from the law which has been voted in: job losses, technology retreat, loss of competitiveness and sovereignty, a step down and de-industrialization,” the CEOs wrote.

The letter was sent following what media reports said was a partial denial of spending cuts in the pipeline.

Finance Minister Michel Sapin said on Tuesday there were no plans to slash €2 billion from the annual defense budget. But the minister failed to rule out a smaller annual cut of €1 billion to €1.2 billion, media reports said.

Sapin was responding to conservative Member of Parliament Xavier Bertrand, who had revealed on May 11 on Europe 1 radio the prospective cuts as the government seeks to slash €50 billion in an attempt to trim the national deficit.

On Wednesday, conservative members of Parliament on the Defense Committee called for a parliamentary hearing with Sapin following the reports of planned cuts.

The 2014-19 military budget law has set an annual defense budget of €31.5 billion, totaling €190 billion over the six years. That budget plan, adopted at the end of 2013, requires asset sales to hit the annual figure. ■


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