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Bad News For EUROFIGHTER
Italy Eyes Defense Cuts
Sep 9, 2010
By Andy Nativi
Genoa
Italy is not immune to the defense cuts that are spreading across Europe. While the government has yet to present a plan for reducing military spending, Defense Minister Ignazio La Russa has revealed highlights of the reductions he will announce by the end of October.
The finance minister plans to impose across-the-board cuts of 10% to the budget of every ministry. This will meet the government's goal of reducing spending by €29 billion ($36.8 billion) from 2011-13.
La Russa deflected measures that would have affected military pay, but had to accept reductions that have not been welcomed by service personnel. These include such expenses as trips abroad for training and meetings.
So far the ax has not affected the €1.5 billion Italy spends annually on international missions, which is outside the defense budget. In July, parliament approved the extension of current missions to the end of the year without cuts. This is important because Italy is conducting a surge in Afghanistan, which will bring 4,000 soldiers in theater by the end of 2010, along with 800 vehicles and 32 aircraft. This mission alone requires €366 million to year-end.
Funds will continue to be provided for operations in Lebanon, where 1,800 soldiers are deployed; stabilization missions in the Balkans, which account for 1,200 troops; and other peacekeeping activities. But it is clear that maintaining these funding levels will be difficult next year, and La Russa says he will try to reduce the Balkans commitment. Italy recently turned down command of the NATO mission in Kosovo, which would have required at least 100 troops. Even if NATO is eager to disengage from Kosovo, the situation on the ground has worsened, with renewed clashes between Serbian minorities and the Albanian majority following affirmation of Kosovo independence. This could affect plans to reduce troop levels. (For a report on conditions in Belgrade, see DTI July/August, p. 52.)
La Russa also announced plans to reduce the size of the military to 180,000 from 190,000. This is more of a tactical announcement, since the force is already around 185,000 due to a slowdown in the enlistment of new soldiers and reenlistments. The minister hinted at personnel reform, saying there are too many senior non-commissioned officers (NCOs) and higher-ranking officers. A broad cut of civilian personnel is envisioned, as well.
La Russa pledged to cancel, reduce or postpone procurement programs to achieve €5 billion in savings. The minister points as an example to the proposed acquisition of 25 Eurofighter Typhoon Tranche 3B aircraft, which will be canceled, saving at least €2 billion. In May Eurofighter delivered a price proposal for 124 Tranche 3B aircraft—valued at around €8 billion and including options in weapons and system integration—to the NATO Eurofighter and Tornado Management Agency, which acts on behalf of the U.K., Germany, Italy and Spain. The contract is to be signed in 2011. Under the original umbrella contract, Italy was planning to buy 121 Typhoons but will now stop at 96, unless it can sell some Tranche 1 aircraft to a foreign customer.
Another air force program that has been deferred is acquisition of a sigint/intelligence, surveillance and reconnaissance system, to be jointly operated with the U.S. Defense Intelligence Agency. The platform, a Gulfstream G550, has been specified, and there is a competition underway between Lockheed Martin and Israel Aerospace Industries to provide mission systems.
No decision has been taken on the number of F-35 aircraft that Italy will acquire for the air force and navy, with a tentative combined requirement of 135 A and B versions.
La Russa also wants to end procurement of Fremm multimission frigates at six vessels rather than 10. The navy needs them to replace as many as 12 frigates, some already worn out. The minister has not mentioned a program termination, but wants to defer the decision to procure the remaining four vessels in 2013, possibly selling them to international buyers.
Procurement savings from these efforts will not be immediate. Since almost all program payments are spread over a number of years, the €5 billion of savings could be achieved only in the mid-term.
These moves will have a major impact on Italy's defense industry and be scrutinized by parliament, which has asked for a wide-ranging defense restructuring instead of cuts and cost reductions.
Photo: Geoffrey Lee
Italy Eyes Defense Cuts | AVIATION WEEK
Italy Eyes Defense Cuts
Sep 9, 2010
By Andy Nativi
Genoa
Italy is not immune to the defense cuts that are spreading across Europe. While the government has yet to present a plan for reducing military spending, Defense Minister Ignazio La Russa has revealed highlights of the reductions he will announce by the end of October.
The finance minister plans to impose across-the-board cuts of 10% to the budget of every ministry. This will meet the government's goal of reducing spending by €29 billion ($36.8 billion) from 2011-13.
La Russa deflected measures that would have affected military pay, but had to accept reductions that have not been welcomed by service personnel. These include such expenses as trips abroad for training and meetings.
So far the ax has not affected the €1.5 billion Italy spends annually on international missions, which is outside the defense budget. In July, parliament approved the extension of current missions to the end of the year without cuts. This is important because Italy is conducting a surge in Afghanistan, which will bring 4,000 soldiers in theater by the end of 2010, along with 800 vehicles and 32 aircraft. This mission alone requires €366 million to year-end.
Funds will continue to be provided for operations in Lebanon, where 1,800 soldiers are deployed; stabilization missions in the Balkans, which account for 1,200 troops; and other peacekeeping activities. But it is clear that maintaining these funding levels will be difficult next year, and La Russa says he will try to reduce the Balkans commitment. Italy recently turned down command of the NATO mission in Kosovo, which would have required at least 100 troops. Even if NATO is eager to disengage from Kosovo, the situation on the ground has worsened, with renewed clashes between Serbian minorities and the Albanian majority following affirmation of Kosovo independence. This could affect plans to reduce troop levels. (For a report on conditions in Belgrade, see DTI July/August, p. 52.)
La Russa also announced plans to reduce the size of the military to 180,000 from 190,000. This is more of a tactical announcement, since the force is already around 185,000 due to a slowdown in the enlistment of new soldiers and reenlistments. The minister hinted at personnel reform, saying there are too many senior non-commissioned officers (NCOs) and higher-ranking officers. A broad cut of civilian personnel is envisioned, as well.
La Russa pledged to cancel, reduce or postpone procurement programs to achieve €5 billion in savings. The minister points as an example to the proposed acquisition of 25 Eurofighter Typhoon Tranche 3B aircraft, which will be canceled, saving at least €2 billion. In May Eurofighter delivered a price proposal for 124 Tranche 3B aircraft—valued at around €8 billion and including options in weapons and system integration—to the NATO Eurofighter and Tornado Management Agency, which acts on behalf of the U.K., Germany, Italy and Spain. The contract is to be signed in 2011. Under the original umbrella contract, Italy was planning to buy 121 Typhoons but will now stop at 96, unless it can sell some Tranche 1 aircraft to a foreign customer.
Another air force program that has been deferred is acquisition of a sigint/intelligence, surveillance and reconnaissance system, to be jointly operated with the U.S. Defense Intelligence Agency. The platform, a Gulfstream G550, has been specified, and there is a competition underway between Lockheed Martin and Israel Aerospace Industries to provide mission systems.
No decision has been taken on the number of F-35 aircraft that Italy will acquire for the air force and navy, with a tentative combined requirement of 135 A and B versions.
La Russa also wants to end procurement of Fremm multimission frigates at six vessels rather than 10. The navy needs them to replace as many as 12 frigates, some already worn out. The minister has not mentioned a program termination, but wants to defer the decision to procure the remaining four vessels in 2013, possibly selling them to international buyers.
Procurement savings from these efforts will not be immediate. Since almost all program payments are spread over a number of years, the €5 billion of savings could be achieved only in the mid-term.
These moves will have a major impact on Italy's defense industry and be scrutinized by parliament, which has asked for a wide-ranging defense restructuring instead of cuts and cost reductions.
Photo: Geoffrey Lee
Italy Eyes Defense Cuts | AVIATION WEEK
