Europe is caught in a paradox: its leaders have never put so much emphasis on reindustrialization, and yet the EU’s industrial production decreased by 2% in 2023. We cannot combine the actions with the words, because there is a lack of clear European leadership. France would do well to distinguish itself by proposing a course for Europe: transform our economy into a war economy, to support the Ukrainian military effort and thus succeed in reindustrializing the country.
Switching to a war economy will not happen in a few weeks, but it is urgent to start now. Ukraine is losing ground despite significant Western military support, particularly American, while this could diminish due to the presidential election in the United States and pressure from part of public opinion. to redirect aid to American households.
This would have two consequences for France and Europe: it would be necessary to massively increase support for Ukraine to reverse the course of the conflict and replace American support which could end with the victory of Donald Trump at the end. of the year. Otherwise, we are doomed to see Vladimir Putin achieve his war objectives: retain 20% of Ukrainian territory, via puppet republics, and neutralize Ukraine.
France must take the lead, because it is the only European country capable of doing so quickly. We have three assets to make this transition to a war economy: energy production, with our nuclear fleet, which can support the increase in industrial production; our military-industrial exporting complex, which has retained know-how; our agricultural production, finally, particularly cereal production, which must protect us from the risks of shortages linked to the establishment of such an economy. However, that is not enough. In a more industrialized and agricultural France, Blum and Daladier took two and a half years to switch to a war economy. But Ukraine cannot afford to wait that long.
France has survived crises, wars and occupations, we can do better than Blum and Daladier. To do this, it is not enough to decree “Produce more and faster”, but to implement a strategy in three relevant steps to achieve this.
Locks to lift
First step, we must create the conditions for an increase in industrial production. We cannot create a war economy in a country that needs lawyers and tax specialists more than engineers and industrialists. This requires the removal of three obstacles: taxation, standards and working time, which have made our industry less competitive and are responsible for deindustrialization. For example, it would be wise to increase the military effort to 3% of GDP and lift the regulatory constraints preventing French banks from lending to defense manufacturers; to carry out a simplification shock on industrial standards; and authorize increases in working hours to 42 hours in key sectors.
Second step, we must target essential industrial sectors to support a war effort. However, in France, they are all in crisis. Our production has collapsed in textiles (–51% since 2000), necessary for uniforms; in refining (– 34% since 2000), necessary for the movement of troops; or even in the automobile industry (– 28% since 2000), necessary to manufacture motorized vehicles, armored vehicles and ambulances. To succeed in this transition, we need to convert factories by sectoral proximity.
Last step, we must carry out a technological upgrade at the industrial and military level. Switching to a war economy will require relaunching our R&D. Each billion euros invested in the defense industry generates 2 billion euros of additional activity (GDP) after ten years and makes it possible to achieve disruptive innovations for the benefit of society in many areas: robotics, GPS, medicine, etc.
Implementing a French-style war economy will lead to freeing up all the country’s energies to produce more. So we will kill two birds with one stone: we will save Ukraine from Russia and we will save our economy from ruin.
William Thay, president of the Gaullist and independent think tank Millénaire.
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