Terror Threats Thaw Budgets Across Europe

A phalanx of soldiers wearing bulletproof vests and wielding machine guns fanned out beneath the Eiffel Tower on a recent afternoon, scanning the crowd for potential terrorist threats. Across the country, nearly 10,000 more armed troops patrolled streets around landmarks, stores and government buildings.
France is spending nearly 1 million euros a day on the heightened security, part of a renewed surge in European military spending as governments declare terrorism a permanent risk.
Europe’s current approach to fighting terrorism, after two deadly assaults carried out by Islamic militants in Paris last year, represents a shift from the austerity mantra that has dominated the region since the debt crisis in 2010. While countries are not abandoning their fiscal discipline, leaders are encouraging a more flexible approach, to give them financial firepower to counter the growing threat.
“We need to track the terrorists, dismantle their networks, cut off their financing and stop propaganda and radicalization,” President François Hollande said recently, after declaring France “at war” with terrorism. “The security pact takes precedence over the stability pact,” he added, referring to the European Union’s rules limiting member nations’ deficits.
Although austerity has been losing favor as a cure-all for Europe’s economic ills, a renewed financial crisis in Greece last year kept a focus on belt-tightening. European leaders threatened to let Greece exit the currency bloc if it did not stick with the budget cuts and economic overhauls required for a new bailout. European Union officials admonished France and other countries for failing to meet deficit reduction pledges.
Now, European leaders are acknowledging that security spending is a priority. After the attacks by the Islamic State in November in Paris that left 130 dead, the president of the European Commission, Jean-Claude Juncker, authorized France to receive special treatment under budget deficit rules to strengthen security programs.
“We are facing serious terrorist acts,” he said. “France, as other countries, has to have at its disposal supplementary means.”
The spending has the potential to provide a much-needed stimulus boost to a region that has struggled for years to kick-start growth.
France, Germany, Britain and neighboring countries sharply curbed military outlays while austerity was enforced. Since 2007, Western European military spending has slumped more than 13 percent, accelerating a decline that began earlier in the decade. As of last year, only four European member countries in the North Atlantic Treaty Organization met the mandated military spending target of 2 percent of gross domestic product.
As security concerns intensify, the trend is reversing.
Germany is hiring more police and intelligence officers, and in January the defense minister proposed increasing military spending by €130 billion, or about $141 billion, over 15 years. The government may also divert part of its €12.1 billion budget surplus to managing the wave of refugees flooding into the country. France is expanding its military equipment arsenal, troops and police, as well as increasing surveillance and spending hundreds of millions of euros on new programs to counter radicalization among Muslim youth.
In Belgium, where militants planned the Paris attacks after training in Syria, nearly half a billion euros will be spent jailing returning jihadists, reinforcing borders and keeping hundreds of troops on the streets. And Britain recently authorized 12 billion pounds in new spending to purchase Boeing P8 maritime patrol aircraft, increase fighter squadron numbers and create new strike brigades.
“We can’t exclude a new attack — no one can,” said Michel Sapin, France’s finance minister. “Here and elsewhere, the risk is present. We need to fight against the origin of this instability.”
Total Western European military spending, led by France, Britain and Germany, is expected to jump by an extra €50 billion through 2019, to €215 billion, said Fenella McGerty, an analyst at IHS Jane’s Defence Budgets in London. Europe’s security spending, though, will still pale in comparison to that of the United States.
Even so, the shift could prove a windfall for security, military and arms manufacturers.
As the austerity mind-set took hold, Europe’s big military suppliers quickly felt the pinch. Contract negotiations with government procurement agencies stalled or orders were scaled back.
Some companies, like Airbus Group, downsized their military business. In 2013, Airbus Group announced plans to cut 5,800 jobs from its military and space divisions and to focus primarily on a booming commercial jet business.
Now, European armies are growing. In a reverse from planned cuts, France is preparing to add 23,000 positions to the army by 2019. A coalition to fight the Islamic State that includes France and Britain will soon intensify the campaign against militants in Iraq and Syria, prompting additional spending on missiles, drones, jets and surveillance.
Airbus is well positioned.
The company supplies European militaries with a broad range of flying hardware such as the NH90 helicopter, the A400M cargo and troop transporter and the A330 multi-role refueling tanker. Airbus also has high-tech satellite surveillance equipment as well as integrated border and coastal security systems, a particular focus in Europe as the migrant crisis swells.
“We need more cooperation and integration in foreign policy, in defense, in security policy — and by security I also mean, obviously, internal security,” Thomas Enders, chief executive of Airbus, told reporters recently, citing the failure of some governments to adequately track and monitor potential jihadists traveling across Europe’s internal borders.
In addition to new equipment, much of the increased spending will go toward closing intelligence and security gaps that have permitted Islamic State militants to travel through Europe and plan attacks.
France, Germany and Britain are hiring thousands of new intelligence officers and upgrading surveillance equipment and software for monitoring communications, especially on the so-called darknet of encrypted networks that terrorists use to communicate and recruit. Prime Minister David Cameron, who is now reversing years of military cutbacks, has authorized Britain’s creation of a new National Cyber Centre to track jihadists.
At the same time, private corporations and big cities alike are ramping up surveillance spending.
In the days after the Paris attacks, Securitas, a leading provider of security agents in Europe, was swamped with calls from department stores, museums and other outlets scrambling to hire thousands of guards and intensify screening. Securitas, which already had 16,000 agents in France, could provide only 800 more, and has since accelerated hiring to meet demand.
At Visiom, a French maker of metal detectors, orders have jumped fourfold since the Paris attacks, especially from sports stadiums, concert halls and large stores.
French companies are expected to spend €500 million more this year for agents, while security firms and police departments will increase orders for everything from bulletproof vests to drones, said Patrick Haas, director of En Toute Sécurité, one of the largest French security firms.
“What has changed after the attacks is that authorities now realize the threat is permanent,” Mr. Haas said. “We are facing a radical shift.”
Correction: February 1, 2016
An earlier version of this article, using information from a briefing paper for the European Parliament that paraphrased incorrectly from an academic paper on the costs of homeland security in the United States, misstated expenditures since the terrorist attacks on Sept. 11, 2001. In the decade that followed, the United States spent $360 billion on homeland security; the United States has not spent an average of $360 billion a year on homeland security.
Fuente:  www.nytimes.com