R&D spending down in Europe

July 24, 2013 at 9:51 AM
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BRUSSELS, July 24 (UPI) -- An analysis of European defense spending in 2011 shows EDA member states cut back on procurement of equipment and investment in research and development.

The European Defense Agency, or EDA, reported this week that overall defense spending by its then 26 member states was about $254 billion -- 0.5 percent less than the previous year – which was 1.55 percent of their total gross domestic product and 3.17 percent of their total government expenditures.

"In real terms, total defense expenditure has been decreasing since 2006 and between 2010 and 2011 it dropped by over 2 percent," it said.

Investment in equipment procurement and research and development by member states dropped almost 14 percent in 2011 to $48.8 billion, its lowest level since 2006.

"Both components of investment contributed to the decrease: equipment procurement dropped by 15 percent ... and R&D expenditure by 9 percent, it said. "As for Research and Technology, expenditure increased by 3.5 percent up to 2.15 billion euros (about $2.83 billion) reversing a downward trend since 2006."

Other findings in the EDA analysis of aggregate data:

-- Personnel-related expenditure of $130.1 billion accounted for 51.1 percent of total defense spending, virtually unchanged since 2009. The second biggest component – operation and maintenance expenditure – increased by 3 percent and accounted for 23.5 percent of total defense expenditure.

-- In 2011, 27.1 percent of total defense equipment procurement expenditure was on collaborative projects. Of the figure, 92.7 was spent on European collaborations.

-- The number of uniformed and civilian defense personnel decreased in 2011, continuing a five-year trend. Military personnel fell 4.3 percent to 1.55 million while civilian personnel decreased 3.9 percent to 374,000.

The European Defense Agency, an arm of the European Union, was formed in 2004 to promote the defense capabilities of EU states and defense cooperation.

In other European defense news, France's arms-related exports orders booked dropped 26 percent last year – from about $8.5 billion to $6.33 billion.

The figures were in a report to parliament from the Ministry of Defense, which attributed the drop to a decline in large export contracts.

The report said the majority of arms-related exports, 52 percent, went to customers in the Asia-Pacific region. India, it said, was the biggest customer.

"Despite a decline in orders, which amounted to 4.8 billion euros ($6.33 billion) in 2012, France is among the world's top five exporters of defense equipment," the Ministry of Defense said. "Exports must be assessed in the long term: beyond a consolidated base of less than 200 million euros ($263.9 million) contracts, the weight of major contracts is paramount to one year to another.

"The French offer is very competitive and covers a large part of the defense industry market. "

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