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Central Europe Picks up the Pace of Arms Race

Billion-dollar purchases are escalating, and not all of the added value is military-related.

by Martin Ehl 30 January 2019

Central Europe is arming itself at the fastest rate – and greatest expense – since the regime changes three decades ago. In part, the investment is to fulfil NATO membership requirements, and it is also a necessity to replace aging and outdated Russian- and Soviet-made equipment. However, another factor driving the pace of armament is security, one of the top concerns of voters in the region – voters who are set to take part in EU-wide European Parliament elections in May. National parliamentary elections will also be held this autumn in Poland, and next year in Slovakia.


The Czech Republic is planning to buy new tracked infantry fighting vehicles (IFVs) this year. This would be the biggest military procurement in the history of the state, at $2.25 billion (1.97 billion euros). In neighboring Slovakia, the government has bought a number of new F-16 fighter jets, while the Hungarians have just ordered German tanks and howitzers, and German-French helicopters. Meanwhile, Poland is planning to sign an agreement to buy an U.S. anti-missile system, at a price tag of tens of billions of dollars.


Some have voiced doubts over the effectiveness and motivations of these procurements. In the Czech Republic, the process of public procurement is so complicated, both to prevent corruption and to protect public officials from accusations of corruption, that the proposed schedule and deadline for a final deal on the IFVs are unrealistic. There are so many checks in place that the ministry's procurement process is effectively frozen.


By contrast, the Hungarian government is going down the path of purchasing weaponry directly, in the form of a bilateral government-to-government deal, rather than through a tender. Although this is compliant with legislation, and it does make the process quicker and easier, it could also permit doubts about transparency and fairness.


In addition to concerns about cost and effectiveness, there is another factor at play – fears about U.S. President Donald Trump's belief in the value of NATO and in the worth of transatlantic ties. Poland's interest in the ambitious U.S.-made anti-missile programs could be seen as a tactic to keep Washington engaged in the region.


In the case of the Czech procurement – for which four companies were initially asked to present offers – two of the offers are German-based, one U.S., and one Swedish.


The bid by Sweden might – in the eyes of former procurement experts and former military officers – present the best fit in terms of the features requested by the Czech command. But there is growing pressure from some politicians to favor a German offer because the Czech armed forces already have a lot of Swedish-made equipment, including supersonic fighters, but nothing from neighboring Germany – which does not reflect the Czech Republic's close industrial and political ties with Germany. The Czech Ministry of Defense is due to issue a detailed order in February, and that is expected to make things clearer.


One Slovak expert is prepared to go even further in drawing a connection between politics and armament purchases: analyst Jaroslav Nad, recently appointed as a defence expert for the Ordinary People and Independent Personalities-New Majority (OLaNO) opposition grouping in the Slovak parliament. He has suggested that the country's purchases of U.S.-made Black Hawk helicopters and, later, F-16s, were intended to conciliate Washington, which had been criticizing the Central European country over corruption and rule-of-law issues. Both purchases should have been too expensive and excessively high-specification for a country like Slovakia, Nad said, pointing out that, so far, the only countries that have ordered the new F-16 fighter plane (Block 70/72) have been the oil- and gas-rich kingdom of Qatar, and Slovakia.


Similarly, both Nad and others have noted that Hungary's recent tank and helicopter orders came at the height of criticism of Orban's government by other European capitals, last autumn.


In addition to international relations, politicians must keep in mind how their defense procurements will appeal to their respective publics. The involvement of the national industry in defense procurement is a very important point for politicians “selling” arms deals domestically.


Thankfully, the international partners often take care of this question. In the current round of procurement, local subcontractors have been secured for the Czech purchase, whereas in the Hungarian case, the signed deal comes with a promise to open a new factory for the helicopters in Hungary.


It has also become less of a problem to find money for defense procurement than it used to be. Central European economies are booming, and only a strong downturn could force a change to these spending plans. Moreover, defense spending is often funded through long-term financing, meaning that the cost doesn't hit the national budget all at once. The Czech government is planning to finance its IFVs over five years, and has other procurement plans in the pipeline, too.


The push to re-arm is thus a strong wind sweeping across Central Europe and NATO, and it seems as though politics for the next few years – with all the elections – and all those legal niceties to ensure fairness and transparency will be seen as mere complications to be overrun.


In light of this concern, Central Europe might look for inspiration to the three Baltic states, which – in the face of Russian aggression in Ukraine – acted fast and in cooperation with one another. Their highly effective strategy revolved around ordering second-hand infantry vehicles and artillery from allies through government-to-government deals, while also ordering new, modern anti-missile and anti-aircraft weaponry.


In the process, the Baltic states showed it is possible to combine quick, smart re-armament with transparency.

Martin Ehl
 is chief analyst at Hospodarske noviny, a Czech business daily.
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