[A-List] France: military spending increase

["Keaney Michael" <Michael.Keaney@xxxxxx>]

French navy to get second carrier
By Victor Mallet in Paris
Financial Times; Sep 06, 2002

The French government has decided to order a second aircraft carrier for
the navy , an outlay of about $2bn (EUR2.04bn) that meets President
Jacques Chirac's election promise to boost defence spending but will put
further strain on the French budget.

Government officials said yesterday that funding for the new aircraft
carrier was included in the draft law covering military expenditure
between 2003 and 2008 - a document heavily revised since rightwingers
defeated the former Socialist-led coalition in presidential and
parliamentary elections three months ago.

Spending on military hardware will be increased by more than EUR1bn a
year from current levels, as part of a drive to raise the French defence
budget from 1.8 per cent of gross domestic product now to 2.5 per cent
in the long term.

The cabinet is expected to approve the proposed legislation next week.

The new vessel is regarded by military planners as essential if France
is to remain a credible international military force. France is without
an aircraft carrier whenever the recently commissioned Charles de
Gaulle, the country's sole carrier, is in dock for repairs or routine
maintenance.

The Charles de Gaulle, a nuclear-powered ship costing $3bn, was
belatedly deployed in the Indian Ocean as a mobile base for the French
contribution to the US-led war in Afghanistan.

So far the government has committed itself only in principle to the new
carrier, and has yet to decide whether it should be nuclear-powered or
modelled on the two conventionally powered carriers soon to be ordered
by the UK.

This cheaper option - the cost would be in the region of $2bn - is the
one being pushed by Thales, the French defence company that is one of
the bidders for the UK contract.

In the short-term the government of Jean-Pierre Raffarin, the prime
minister, is facing a budget squeeze because it is reducing personal
income tax at the same time as increasing spending on defence and law
and order.

Faced with sluggish economic growth, France now risks breaching the
budget deficit limit of 3 per cent of GDP set by the European Union's
growth and stability pact.

Economic data released this week suggest the government will struggle to
limit the deficit this year to its latest target of 2.6 per cent of GDP.

President Chirac, however, is determined to bring France's defence
capabilities closer to the level in the UK and has already secured
cabinet agreement for an extra EUR908m of defence spending in 2002
alone.

In July a Senate committee was given alarming details about the state of
French military equipment. Serge Vinýon, a rightwing senator, said 60
per cent of the army's Gazelle combat helicopters were unavailable for
use.