WHAT FINANCIAL CRISIS? IT’S BUSINESS AS USUAL IN THE SECURITY AND DEFENCE SECTOR
WHAT FINANCIAL CRISIS? IT’S BUSINESS AS USUAL IN THE SECURITY AND DEFENCE SECTOR

Summary/Abstract: Between 2007 and 2011 the financial crisis saw declining defence spending in Western countries ( by 3%) and Central Europe (by 14%), home to some of the world’s top five S&D spenders and the world’s greatest common market area member states. Bilateral and multilateral mechanisms to reducing costs of security and defence (S&D), with initiatives such as pooling and sharing and the ‘Ghent Framework’ were erected. NATO launched the Smart Defence Initiative aiming for the same result. However, the largest cuts have been introduced in smaller EU states, with minor roles in globalsecurity. Defence budgets of world powers maintain a relatively unaltered investment path. Germany’s actual defence cuts have been more modest than suggested in 2010. Britain has rebalanced its S&D expenditure and managed to maintain an “adaptable posture.” Obama’s $634 billion defence budget proposal in 2009 represented a cut, but still amounted to a 4% increase overall. Thus, contrary to common belief, the S&D sector overall appears relatively immune to the crisis. This seems even more true today, with the German Defence Minister de Maizière renegotiating existing contracts with the defence industry and Prime Minister David Cameron stating that he is ‘very open’ to the idea of channelling resources from the UK’s foreign aid budget into military defence, to avoid further defence cuts. Therefore, restructuring is happening, but adverse cuts are evaded. In effect, despite the crisis, it seems it’s - more or less - business as usual in the global security and defence sector.

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