PARIS — French President Emmanuel Macron demanded that industry shift to a war footing in response to Russia’s attack on Ukraine, but four years on the results are disappointing.

That’s a growing problem as France starts to run out of air defense missiles in the Middle East while facing calls from Ukraine for more weapons to hold off Russia, all while the government aims to dramatically increase the production of missiles, tanks and planes in its rearmament effort.

Macron wants companies to move first and anticipate orders, saying this week: “I wish more risks could be taken when it comes to investing.” But businesses want iron-clad contracts before opening new factories and boosting production capacity.

“France is struggling to free up money for new orders. There are too few orders, that’s all there is to it. We’ve been going over the same things for four years,” said Cédric Perrin with the conservative Les Républicains and head of the French senate’s defense and foreign affairs committee. He added the government’s arms announcements “are accelerations of deliveries on existing orders, not new ones.”

Since the war in Ukraine started, the state hasn’t signed enough contracts to drive a meaningful industrial ramp-up, according to French lawmakers, industry officials and experts who spoke to POLITICO. They also described eroded trust between the state and some weapons manufacturers, and fear that France’s rearmament effort will fall behind its European allies. 

The government argues companies need to be able to absorb future demand.

“We want to be certain that, before placing these orders, there is indeed a robust and resilient industrial infrastructure in place to meet them,” said a senior French official, who was granted anonymity because they’re not authorized to talk publicly. “We want to be certain that manufacturers are capable of delivering for the French market and for export, and of further ramping up production.”

But businesses are reluctant to trust those promises.

“Some manufacturers are a bit too hesitant about investing, but the government is a bad customer: It says it’s going to place an order and then doesn’t follow through,” said an industry official, granted anonymity to speak candidly about sensitive topics. “We need to find a middle ground, but it’s a matter of trust, and that trust has been severely eroded.”

The lackluster production push is turning into a real problem as France scrambles to swiftly replenish stocks of expensive and hard-to-replace air defense missiles fired in the Middle East to counter Iranian drone and missile attacks. France has already warned its stockpile of air-to-air MICA missiles is running low and is looking at startups such as Harmattan AI and Alta Arès for low-cost interceptor drones.

More money for defense

Prime Minister Sébastien Lecornu is expected to hold high-level meetings in the coming weeks to take stock and ensure weapons-makers can deal with new orders. The government will present an updated military planning law on April 8. Macron has asked parliament to sign off on the non-binding bill before July 14.

The seven-year military planning law voted in 2023 earmarked €413 billion from 2024 to 2030, including €16 billion for munitions. It will be revised in the coming weeks to add €36 billion despite France’s high public deficit.

But the spending surge isn’t ending the standoff between the state and weapons-makers.

Defense companies such as KNDS France and MBDA have been asked to ramp up munitions production on their own dime, with the government arguing contracts will eventually come.

“We have never placed so many orders, the argument saying there’s no visibility is simply not true,” Patrick Pailloux, the new head of the procurement agency DGA, told reporters last month.

Industry, on the other hand, does not want to risk producing weaponry the government might end up not buying. And the state has little leverage to strong-arm the industry by threatening to go to competitors instead, French officials argue, because most companies are monopolies and France tends to purchase locally.

It’s not that nothing is being done. Since 2022, DGA did order several hundred surface-to-air Aster missiles from MBDA, including by accelerating planned deliveries, MICA launchers with munitions, short-range surface-to-air Mistral missiles, among other weapons.

But that’s not stopping Macron from administering regular tongue-lashings to industry.

“Without a defense industry that produces more, faster for our country, we will not be able to seize opportunities for ourselves or for export,” the president said this week at the shipyard building France’s next aircraft carrier.

He told an audience of top military brass that “the war in the Middle East is a test, not only of our ability to innovate, but also of our ability to produce faster and on a larger scale for some of our partners.”

Unflattering comparisons

Macron was the first president in decades to increase the size of the defense budget, but despite that France risks falling behind other European countries, industry officials, lawmakers and military officers privately warn.

France will spend €57 billion on defense this year. In comparison, Germany’s military expenditures are set to reach more than €82 billion and Poland — with a much smaller economy and just over half of France’s population — is spending 200 billion złoty (€46.7 billion).

“The fact is, France is not rearming. Poland is, even Germany is. But France’s armed forces’ format is still the same as four years ago with no additional guns, tanks, aircraft or ships compared with what was planned in 2019,” said Léo Péria-Peigné, a researcher at the French Institute of International Relations.

“If we’d ordered eight Mamba batteries four years ago, we’d have them now; if we’d ordered 800 Aster missiles, we’d have them, and production would have scaled up,” he added, referring to the  SAMP/T air defense system also known as the Mamba. “It’s been going on for four years now, four years of hearing that orders are coming.”