BRUSSELS — United States arms-makers are being frozen out of the European Union’s massive new defense spending plan, which aims to splash the cash for EU and allied countries, according to defense spending plans released Wednesday.
Also left out — for now — is the United Kingdom.
It makes sense for the UK to be out as it’s not in the EU. However the UK and EU may end up making a deal on shared procurement which makes sense for both.
Most of the top 10 biggest defence companies are US or Chinese, with 1 russian company. The largest defence company in Europe is BAE in the UK, and the only one in the top 10.
There are 5 more EU companies in the top 30, and another UK company.
A shared procurement deal would allow a bigger choice of companies and competitive procurement to keep costs down. There is a real risk for the EU (and the UK) of inflated costs if they limit procurement to a small group of European companies that don’t have to compete with the big american companies for the contracts.
I think it’s right to exclude the US, but then the pool of companies needs to be as big as possible to allow competitive tendering.