Earlier this year Estonia teamed up with its neighbor Finland to buy used howitzers from South Korea. It’s not a massive deal: the Estonians are buying 12 howitzers; the Finns, 48. But it illustrates a new development in Europe: second-hand weaponry is becoming scarce.
And that’s a good thing, both because the increased demand shows that Europeans are increasingly taking defense more seriously, and because it is likely to serve as a spur to more innovation.
“25 years ago we had nothing—no weapons, no military infrastructure—so we bought a lot of things government-to-government,” says Kusti Salm, Estonia’s chief defense procurement officer, using the official term for second-hand defense equipment. “Some of the equipment was extremely cheap because it was reaching the end of its life-cycle. And some things, like vehicles and personal equipment and arms, were even donated to us. The nineties were like Christmas for countries in Central and Eastern Europe.”
The equipment was sold or donated by Western European countries including Germany, Sweden and the Netherlands who no longer deemed it necessary as Europe entered a post-history era. Ex-Warsaw Pact countries such as Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Romania, Bulgaria, who needed to move their armed forces away from Soviet equipment, eagerly bought the materiel. Indeed, buying used equipment from the West is usually the first step for any country trying to rise to Western armed forces quality. “Government-to-government sales are popular because they usually form part of much deeper defense arrangements that allow for greater interoperability and/or technology transfer partnerships,” said Daniel Fiott, Security and Defence Editor at the EUISS (the European Union Institute for Security Studies).
25 years later, the former Warsaw Pact countries are still buying weaponry: last year Poland spent 26 percent of its defense budget on equipment, while Lithuania spent 28 percent and Romania 26 percent. Lithuania needs more howitzers and infantry fighting vehicles, while Poland’s needs include combat helicopters. Unsurprisingly given these needs, last year Lithuania bought 200 military vehicles from the Dutch government. “The Latvian MOD [Ministry of Defense] has been and is very interested in the defense materiel surplus market,” Aivars Purins, the Latvian defense ministry’s deputy secretary of state for logistics, told me. “It helps us acquire a certain capability in a short timeframe, using equipment with a proven track record at an affordable price.”
But buying conditions have changed. In fact, the European market for second-hand defense equipment is drying up. “It began several years ago when the leftovers of the last defense cuts from the early 2000s were sold,” Purins said. NATO’s latest statistics show equipment taking up a growing share of many NATO members’ defense budgets. That percentage increase does, of course, not fully capture the increasing equipment spending as countries are also growing their defense budgets.
The big change is happening in Western Europe. Countries such as Germany are no longer selling off usable equipment but are instead buying such equipment themselves. This spring the Bundeswehr bought back 104 of its used tanks from the defense contractor Krauss-Maffei Wegmann. “In Europe the supply of government-to-government equipment has essentially dried up,” Salm said.
Indeed, so many European countries want to buy used F-16 fighter jets from the Pentagon that the US government has run out of them. “There’s a demand for excess F-16s out there from a lot of our European partners,” Heidi Grant, deputy undersecretary of the Air Force for international affairs, said this month [June], adding that the “demand and interest is greater than I have ever seen”. In fact, Grand said, there aren’t enough F-16s to satisfy the European demand. Instead Lt. Gen. Arnold Bunch, the Air Force’s military deputy for acquisition (who like Grant spoke at the Paris Air Show), suggested that “not every country needs an F-16. Sometimes we work with them to come up with other alternatives”.
Suggesting alternatives is a commendable strategy in any sale, but in particular in defense acquisitions. While second-hand weaponry fulfills a need in European armed forces, the shortage of it will force countries to at least buy some new equipment. That’s good news, not just for defense companies’ immediate sales. “The problem with government-to-government sales is that they don’t really promote new innovation, even if such sales may result in tech transfer,” said Fiott. “The truly innovative breakthroughs occur when new systems development is underway.”
True, the loop from sales to innovation is not always clear, and it depends on the system or piece of equipment in question. Still, Fiott said, “equipment sales that are accompanied with technology transfer may certainly lead to more innovation”. And innovation is needed. While much of armed forces’ equipment remains essentially the same over the years, today’s hybrid warfare and territorial defense is very different from the out-of-area missions – primarily Iraq and Afghanistan – over the past decade. “That meant that, for example there was little focus on the development of vehicles, which is unfortunate because in this part of Europe the terrain requires very tough vehicles,” Salm told me. A terrain vehicle is, of course, far from a weapons system. But with countries going far beyond used howitzers and even new terrain vehicles, defense companies will be inspired to innovate more.