Analysis More subsidies to the military industry from the EU – El Salto

It is known that the European Union embarked on the path of militarization years ago. The war in Ukraine has exacerbated this trend, adding to the growing process of rearmament and increased military spending in the Union member states. One of the pillars of this path of militarization is the financing program for military research and development projects called the European Defense Fund (EDF).

The EDF was launched in 2021 (although some pilot financing programs were launched before that, although smaller in scope). Until then the EU had never funded strictly military research projects. It is worth remembering that, In the construction of EDF, The European defense and security industry had a strong contribution to this, being called upon by the European Commission to participate in an advisory council on military research. And it is actually the defense industry that proposes and implements research projects subsidized by EDF. And furthermore, to close the circle, it will sell the technology generated from this research to EU member states and third countries.

The first call for subsidies was opened in 2021 and the results were published in January 2023. 1,166 million euros were allocated for that first call. Out of 142 projects submitted, 60 projects were selected.

The second EDF call was opened from June to November 2022 and the results were published in June 2023. Its budget will be Rs 832 million, with Rs 317 million for defense research projects and Rs 514 million for prototype development projects.

Therefore, so far, the R&D funding figure for the European military industry from EDF has reached 2 billion euros. Out of which Rs 1,359 million will be spent on development and Rs 639 million on research.

Three Spanish companies are in the ranking of 25 entities with the highest amount of FED subsidies. They are Indra, GMV Aerospace & Defense and Navantia

134 projects were eligible for the second call and 41 were selected, eleven of which have a relationship with PESCO (Permanent Structured Cooperation). PESCO is a defense policy of the European Union that aims to achieve structural integration of 25 of the 27 armed forces of the member states.

The average number of participants in each project is 22 entities from nine EU Member States.

The official statement of the results of the call states that, with the selection, the FED will support projects for fighters, tanks and ships of the latest generation, as well as an early warning space base for the Navy. And ground fighting. And Hawaii. It will also promote disruptive technologies. Another example of the process of militarization and rearmament that the Union has chosen.

Participation of entities based in the Spanish State

The Spanish State has 43 different entities that participate in 31 of the 41 selected projects. Some of them do so in different projects, bringing the total Spanish participation to 75. They are coordinators of five projects: Indra is coordinator of two projects, Navantia, Lortec and Fábrica Española de Construcciones coordinate one project each.

The largest participating entities are Indra (14 projects) and GMV Aerospace & Defense (6 projects). Six other institutions participate in three projects each; They are Airbus Defense and Space SAU, National Institute of Aerospace Technology (INTA), Senor Aerospace, Navantia, Spica Tech and the Polytechnic University of Madrid. Two more institutions participate in two projects each; Textile Industry Research Association and Thales Spain Systems. The remaining institutions participate in only one project.

Of the two EDF calls, the Spanish State is in fourth place in the ranking of recipient countries, after France, Germany and Italy. Awarding institutions from these four countries will access 60% of the total allocated for the second call and 67% of the total allocated for the first call. The total amount of the second call is reduced by 28% compared to the first. In relative terms, Spain will be least affected by this reduction, as it will see a 22.8% reduction, compared to 43% for France, 28.9% for Germany and 23.1% for Italy. In this second call, Spanish entities will receive more than 86 million euros.

Three Spanish companies are in the ranking of 25 entities with the highest amount of FED subsidies. They are Indra, GMV Aerospace & Raksha and Navantia.

Indra will receive a total of EUR 60.78 million from FED financing; 27.03 million from the first call and 33.75 million from the second.

GMV Aerospace and Defense SAU will receive total FED financing of EUR 12.40 million; 5.52 million from the first call and 6.88 million from the second.

Navantia will receive FED financing totaling EUR 11.60 million; 4.83 million from the first call and 6.77 million from the second.

Let us not forget that Indra and GMV Aerospace and Defense have been accused of corruption or fraud.

Indra Punik is one of the companies involved and investigated in the judicial process of conspiracy. According to Judge Manuel García Castellón, Indra “has been a unique part of the concert designed by the leaders of the Madrid PP to use the public coffers of the ICM entity as a source of income for the party.” In another way, Indra was sanctioned by the CNMC for being part of a cartel of companies that shared public contracts and made them more expensive. Indira’s senior officials have also been accused in the Lezo operation.

GMV Aerospace & Defense SAU: According to the organization, the World Bank has vetoed a GMV subsidiary for “collusion, corrupt and fraudulent practices” in two awards in Vietnam. Thus this subsidiary has been prevented from participating in projects financed by the World Bank.

In our work regarding the results of the first FED call, we expressed regret that Spanish universities and research centers participated in military projects. In this second call, the Polytechnic Universities of Murcia, Alcalá and Madrid repeat. The University of Oviedo, the Public University of Navarra and the Polytechnic University of Valencia have joined. Universities should be centers of knowledge, debate, free thought and diversity, all concepts distinct from war and violence.

Let us bear in mind that the results of research and development projects subsidized by EDF will be the basis for the creation of military prototypes and technology by the defense industry, which the Member States themselves must purchase, as stipulated in the regulations. EDF only. Fed. An unbeatable position for the European defense sector, as it has guaranteed sales and customers. The Spanish military industry benefits significantly from European R&D subsidies, which will help consolidate its presence as one of the world’s top ten arms exporters.