PARIS ― The French Armed Forces Ministry has promised to closely track the effect a new budgetary rule could have on multiyear arms programs in the wake of Parliament adopting a law seeking to cap government spending.
“The Armed Forces Ministry, particularly the DGA (Direction Générale de l’Armement), is a large investor, and the funding of military equipment often requires a multiyear approach,” the ministry told Defense News. “The ministry is paying close attention to the issue of the amount to be funded and to the consequences this new budgetary rule could have.”
The lower house National Assembly on Thursday gave a final reading of Article 14 in the public finance law, a legislative measure which seeks to rein in the national deficit.
Parliamentarian François Cornut-Gentille, a member of the conservative Republican party, expressed concern over the budgetary measure.
“How do we respond to this budgetary control?” he said, referring to a perceived lack of clarity on how the Armed Forces Ministry will respond to the spending restriction.
An increased financial control further boosts the importance of the president’s Elysée office, which has often played the role of arbitrator in funding disputes between the Armed Forces Ministry and the Economy and Finance Ministry.
“This is a centralization of democracy,” said Cornut-Gentille, who sits on the National Assembly Finance Committee. Previously, the defense ministry had room to maneuver in presenting a budget for approval by the president, but now there is “zero margin,” he added.
Armed Forces Minister Florence Parly has previously asserted Article 14 would pose problems for arms programs.
“Article 14 of the draft law on public finance holds all our attention,” she told the Finance Committee of the upper house Senate on Oct. 31. “Its consequences are different for a ministry in which a significant part of credit payment is set aside for investment.
“The management of long-term investment for military equipment will be difficult.”
The joint chief of staff, Army Gen. François Lecointre, told the Senate on Nov. 13 that he understands the public finance law seeks to bring government spending under greater control, but added that it such an effort may harm the military.
“However, the strict application of the funds to be paid seems to me extremely dangerous and counterproductive, even highly penalizing, in view of the contractual policy of the ministry,” he said.
The Article 14 budgetary cap will apply to €50 billion (U.S. $59 billion) of defense spending, of which €37 billion is earmarked for buying kit. The National Assembly adopted the measure in a Dec. 15 reading, which went on to complete the Dec. 21 legislative procedure.
The legal measure is a bid to balance the budget, requiring annual budgetary authorization for programs to match the annual amount for credit payments, which fund payment of contractors and suppliers.
There is concern the budgetary cap will push back the launch of production of large weapons programs, as these require heavy funding. Research studies could be stretched out, as they require lower funding rather than manufacturing contracts, which boost the arms industry and equip the services.