More Than a Soft Power: France Becomes the World’s No. 2 Arms Exporter

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More Than a Soft Power: France Becomes the World’s No. 2 Arms Exporter​

The country shows it’s more than a land of luxury goods as it becomes the world’s second-biggest seller of defense equipment after the US

The cockpit of a Rafale fighter jet, manufactured by Dassault Aviation SA.
Photographer: Jason Alden/Bloomberg

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By Lionel Laurent
15 במרץ 2024 at 14:03 GMT‎+2‎
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Bonjour et bienvenue to the Paris Edition. I’m Bloomberg Opinion columnist Lionel Laurent. If you haven’t yet, subscribe now to the Paris Edition newsletter.

Defense Spending Isn’t a Luxury​

Paris is a land of soft power and luxury, as the return of Bernard Arnault to the No. 1 spot on the world’s rich list shows. The reappearance of Emily in Paris shows it too. On a recent Eurostar trip, when seeing a frantic station official pushing through the Gare du Nord crowd, I feared a bomb threat — until Emily (Lily Collins) appeared and followed the official through passport control.
There’s also the small matter of this year’s Olympic Games, seen as a huge test for tourism, diplomacy and environmentally-friendly urban renewal. (Read more here.)
But France is also riding a resurgence in hard power, as its new rank as the world’s No. 2 arms exporter shows. European NATO members (and Canada) are expected to lift military spending by $33 billion this year amid the war in Ukraine and ahead of a possible Donald Trump return. Share prices of Paris-listed defense and aerospace firms like Airbus and Safran are riding high on the back of this wartime boom.

A Rafale fighter jet, manufactured by Dassault Aviation SA.Photographer: Jason Alden/Bloomberg
The urgency of a rearmament mindset is being pushed by President Macron at home, too, in a week that’s seen a parliamentary debate on support for Ukraine and several French government agencies under intense cyberattack. The defense ministry has unveiled a new military AI strategy with €2 billion in funding through 2030, potentially tapping into the pool of talent that’s boosting startups like Mistral AI (and attracting the attention of SoftBank).
Macron is also trying to send a political message ahead of European elections in June to distinguish himself from his far-right nemesis Marine Pen, who is becoming an increasingly normalized choice for voters in a stagnating economy that is trying to rein in state spending. Macron’s also hoping to cement new partnerships across Europe’s East, beyond the usual Franco-German engine, to promote strategic autonomy and more homegrown defense solutions.
It won’t be easy. The French are proud of their army, sovereignty and the heritage of General de Gaulle. But public opinion is largely opposed to sending boots on the ground in Ukraine. And despite a mounting realization that Europe has to “buy European” to protect its industrial base, the reality of production bottlenecks and habit means that US suppliers still look indispensable.
Still, with Vladimir Putin likely to win Russian elections and Trump possibly on course to return as US president, the message is that European defense is no longer a luxury — even in the country that gave us Emily in Paris.

Must-Read Stories​

Giorgia Meloni’s government is demanding that a bigger share of investments made by chipmaker STMicroelectronics NV go to Italy, the latest sign of tension over business ties with France.
The French government will present a bill this year that will allow adults stricken with incurable diseases to take their own lives, Macron said.
There’s broad agreement at the ECB to begin lowering interest rates in the spring, with June more likely than April for a first move, as the battle against inflation is being won, according to Governing Council member Francois Villeroy de Galhau.

French Inflation Is Nearing 2% Target​

Source: Bank of France
Automakers bringing new electric vehicles to market in Europe are virtually united in common gripes — not about consumer demand or government subsidies, but about issues with plugs.
President Vladimir Putin halted the seizure of the local Russian subsidiary of French yogurt maker Danone SA, clearing the way for a potential sale to a firm favoured by the Kremlin.

The Week Ahead​

Tuesday: Euronext annual conference
Thursday: March business, manufacturing confidence data; flash PMIs
Friday: Q4 final wages

For Your Pursuits​

What lies behind the luxury $9,000 sweaters sold by fashion house Loro Piana? Delve into the world of capturing and shearing vicunas high in the Peruvian Andes — hard work that can go unrewarded.

Andrea Barrientos, an Andean woman poses for a portrait with her sheep at her home in Ayacucho, Peru, June 25, 2023.Photographer: ANGELA PONCE
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