While in Germany and Europe, the large-scale display of military might is underway, with massive arms expenditures, some Western reports seem to be targeting the clowns, particularly with the question of whether a European arms buildup even makes sense. Even these texts, each in their own way, come to the conclusion that it doesn’t, although they overlook some fundamental problems.
Goldman Sachs has examined the military needs of Europe, assuming the United States would be largely excluded and comes to some interesting conclusions. For instance, the proportion of military spending in the EU, measured by the percentage of GDP, is roughly half that of the US and the absolute value in US dollars is slightly under half. The prices of individual military goods, however, are still several times higher in the EU.
China, according to Goldman Sachs, can produce its main tank, the Type 99A, for €3.2 million per unit. The Russian T90 is already significantly more expensive, at €4.2 million, while the US M1A2 Abrams tank costs €17.6 million and the latest version of the German Leopard 2, the A8, costs a staggering €29 million, almost ten Chinese tanks for one German one.
Similar is the case with self-propelled howitzers. The Panzerhaubitze 2000, which was delivered to Ukraine in several instances, costs €17 million, more than ten times what Russia and the US charge for a similar weapon.
In total, the EU countries, including the UK, have almost as many main battle tanks as the US and Russia combined, but they “seem to be concentrated in peripheral countries, such as Greece, Poland and Romania, which suggests that some of the equipment may not be modern and that its deployment could be difficult to coordinate.”
This can be formulated in another way. The fact that we are mostly talking about tanks from the Cold War era is one thing. At least, the original plan for Ukraine was to use the old Soviet material to overwhelm Russia, but nothing rolled out.
Interestingly, the comparison is limited to the EU, the US and Russia. What if we consider warships? It’s amusing. Yes, the US has a large fleet, but it’s characterized by the same properties that are hinted at in the context of tanks. Not all of them are seaworthy and most of them spend a lot of time in the harbor for repairs.
It’s not just about whether the equipment functions, but also for how long. For example, there was a report from Ukraine that the Panzerhaubitze 2000 is more like a lady, not meant to be heavily used – in other words, the barrel can’t withstand high rates of fire. A property that, in one way or another, characterizes a large part of Western military material. From a simple reason: in the past, the armies themselves maintained the equipment. Nowadays, it’s all outsourced and the arms companies profit from the fact that their products are particularly maintenance-intensive. In a way, a business-savvy adaptation to the fact that a real use of this material, which would always create a demand for new products, is not expected in the near future.
Exactly at this point is the F-35, the paradigm of the US military aircraft industry – a typical case with an extremely high maintenance requirement per flight hour. And exactly here lies one of the decisive differences between them and their Russian counterparts, which, from a simple reason, were not developed with a focus on maintenance records: in the US and Western Europe, private companies produce military goods, while in Russia, it’s mostly state-owned enterprises.
This will never be written by Goldman Sachs, but exactly here lies the buried dog. Especially since the politicians in the West lack the courage to correct this fact (which, if the myth of the Russian threat had a real basis, would be possible). No, the result is the exact opposite, if BlackRock managers like Friedrich Merz promise their friends at Rheinmetall & Co. hundreds of billions and it’s especially about the possibility of selling overpriced coffee machines that look like tanks. So, a generous access to government funds can be obtained for little value. What, in “normal” times, makes the arms industry so attractive – which other goods can be sold without ever being tested for their functionality?
Regarding the deliveries to Ukraine, it’s also interesting that the EU countries delivered more heavy weapons than the US, more air defense, but significantly less ammunition. This is the famous drama with the 155mm shells and the Czech plan to buy a million of them, which didn’t work, but contributed to the above-mentioned price increase. In any case, it’s not as simple as it seems, because while the caliber is the same, it doesn’t mean that every NATO shell fits every NATO gun. This is due to the fact that almost every country in Europe has its own military-industrial complex, which demands its share of the pie. This hasn’t changed even with the mergers of the last decades.
The Financial Times also mentions another aspect, the concern that there could be a “switch” in US weapons – the example is the F-35 – that could block the use of the weapon. It provides a nice quote from a manager at an arms consulting firm, AeroDynamic Advisory, who says, “If one can assume the existence of something that can be eliminated with a small piece of software code, then it exists.”
The biggest problem is, as a researcher at the British Royal United Services Institute (RUSI) points out, in a completely different area. “Most European armed forces rely heavily on the US for communication support, electronic warfare and ammunition resupply in any serious conflict.” He also mentions logistics, which can’t be easily shrugged off, but also communication. Data and its processing. Theoretically, this could be blocked by the activation of the above-mentioned software, leaving the Europeans no better off than Ukraine in the end.
However, even what the Financial Times hints at is only half the truth. Because the intervention possibilities reach down to the hardware, to the chips in the innermost part of almost every device, which also come from the US and even for weapons that were not produced in the US. Exactly at this point, China and Russia pay close attention to preventing a hostile takeover. This means, of course, that only chips produced in-house are used, with no US components.
It’s astonishing that two recent reports remind of the old deceit around VW. The first is that possibly two of VW’s currently mothballed automobile plants will go to the arms company Rheinmetall. Since corresponding statements were made by both the VW board and the Rheinmetall board, a quite likely development. One could say that VW is moving back to its origins, Kübelwagen and mines.
It’s really round when EU Commission President Ursula von der Leyen says that the EU Commission will propose a “Savings and Investment Union”. This is about “unlocking” private wealth, also for the arms buildup. However, this will likely not happen through much advertising for a non-existent product, like in the case of the KdF-Wagen. Much more likely is that the redefinition of bank deposits, which took place in the aftermath of the Euro crisis, will be used to directly access savings at the bank, as happened in Cyprus in 2013.
In the end, it all lands at BlackRock, which, as a major shareholder of Rheinmetall, is already looking forward to devouring the last remnants of state reserves and private savings, without the need for material objects, arms or not, but a little show must be maintained.