France to cut military staff by 12 percent in six-year budget

PARIS Fri Aug 2, 2013 10:05am BST

French Defence Minister Jean-Yves Le Drian addresses a gathering at the Institute for Defence Studies and Analyses (IDSA) in New Delhi July 26, 2013. REUTERS/Anindito Mukherjee

French Defence Minister Jean-Yves Le Drian addresses a gathering at the Institute for Defence Studies and Analyses (IDSA) in New Delhi July 26, 2013.

Credit: Reuters/Anindito Mukherjee

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PARIS (Reuters) - France will cut nearly 34,000 military personnel under a proposed six-year defence budget to be unveiled on Friday, as government belt-tightening and a desire for more nimble forces alters the makeup of Europe's second-largest army.

Defence Minister Jean-Yves Le Drian will present the 190 billion-euro (165 billion pounds) budget in a cabinet meeting.

The defence ministry warned in April that its budget would remain largely static in coming years when it outlined its 2014-19 priorities in a strategic blueprint that anticipated the 12-percent cut in staff.

The government wants to cut state spending by 60 billion euros over its five-year term to meet deficit targets but steered clear of drastic cuts to military spending after armed forces officials and lawmakers said that would hamper France's ability to react to global security threats.

Still, the military job cuts will bite at a time of rising unemployment and dissatisfaction over Socialist President Francois Hollande's inability to revive a faltering economy.

Under the draft budget, the military will slow the pace at which it takes delivery of Rafale jets ordered from Dassault Aviation, only taking 26 of the planes over the six years, down from some 11 planes a year.

The government hopes foreign orders will absorb some of the planes being rolled out by partly state-owned Dassault, which has yet to sell one of its flagship Rafales abroad but says it has to produce at least 11 a year to operate efficiently.

The move will delay promised payments for the planes, worth roughly $120 million apiece, easing pressure on state coffers.

Relying on elusive export deals to sustain Rafale production is a gamble that could misfire and lead to Paris having to revise its own order upwards in the future. In all, France has made commitments to buy 180 Rafales, a third of which have yet to be budgeted for.

After fierce competition with U.S., Russian and European rivals, France is in exclusive talks to sell 126 Rafales to India and hopes to complete a deal by year-end. It is also battling against the four-nation Eurofighter and others for orders in Qatar, the United Arab Emirates, Brazil and Malaysia.

"There is no reason to be worried about Dassault," Defence Minister Jean-Yves Le Drian told Europe 1 radio. "I am very confident about the export capacity of the Rafale in the months ahead."

A source close to the minister said that if, two years from now, it was clear that export orders were not firming up, the pace of Rafale deliveries to France might have to be revised.

LESSONS OF MALI

The proposed budget is slightly above the 179 billion-euro figure the April blueprint had indicated, after being boosted by real estate sales and other one-off benefits.

It will be debated in the months ahead in parliament, where the ruling Socialists have a slim majority, and is largely expected to be voted into law by year-end.

The military, which has sustained repeated budget cuts in recent years, is focused on overhauling the armed forces to create a more mobile army still capable of operating in two or three different theatres at the same time.

France's engagement in Mali this year, which drove back Islamist rebels, has underscored the need for robust intelligence resources and special forces.

For the next three years, the annual budget will be frozen at 31.4 billion euros, the same level as 2013, with the expectation that it will rise in 2017, 2018 and 2019.

The six-year draft budget calls for the elimination of 23,500 posts, 16,000 of which are administrative positions. The other 10,000 staff cuts were mandated under the previous budget.

France's military employs some 228,000 personnel today. A further 165,000 individuals are employed by the defence industry, not including sub-contractors. ($1 = 0.7557 euros)

(Additional reporting by Cyril Altmeyer; Writing by Alexandria Sage; Editing by Catherine Bremer and Andrew Roche)

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