In theory, Romania has increased its defense spending to 2 percent of GDP since 2017 and major US and Western European military contractors have engaged in a fierce battle over multi-billion contracts, aiming to strengthen a weak link on the eastern fringe of NATO. But most of major army programmes are now frozen as the government struggles to finance its soaring wage and pensions spending.
Romania is militarily weak, experts say, as it has not invested enough to boost its defense capacities since the fall of the Communist regime.
But the situation seemed to be changing during the last couple of years as a consequence of both the rising external threat, following the annexation of Crimea by Russia, and of NATO’s pressure on its members to increase defense spending.
The political consensus to increase military spending to 2 percent of GDP from 2017, from roughly 1.4 percent over the previous years, has had a rapid effect on army modernization plans.
However, planning doesn’t always translate into doing in Romania. In 2017, Romania spent almost 2 percent of GDP for its defense but in 2018 the total military spending was RON 17 billion – and this means only 1.8 percent of the GDP.
The Romanian official statistics body (INS) said last week that Romania’s GDP was RON 940.5 billion (EUR 202 billion) in 2018 – significantly below the government’s last forecast of RON 949.6 billion.
This underperformance of the military spending was mainly due to delayed or frozen modernization plans.
Romania’s main procurement and modernization projects are: the acquisition of four multifunctional corvettes, rocket launcher mobile systems, the modernization of MLI 84 M combat machines, 8×8 and 4×4 armored carriers, C4I systems, ASAM large-scale rocket systems, short and very short range air defense (SHORAD/VSHORAD) systems and a multiple missile launcher.
Other important projects include the expansion of the fighter plane fleet (from currently 12 F-16’s to at least 48), the acquisition of combat and utility helicopters, the upgrade of the training plane fleet (IAR 99 Soim), the modernization of the two British frigates (Regele Ferdinand and Regina Maria), the acquisition of military trucks and the beginning of a small submarine fleet programme.
All these programmes are costly, and Bucharest has really begun to launch only a few projects. With virtually no defense against missile and naval threats along the Black Sea, Romania’s government has signed several important military contracts in 2017, notably for Patriot and HIMARS rocket systems and Piranha 5 military vehicles.
All the contracts were granted directly to US military contractors: Raytheon (Patriot), Lockheed Martin (HIMARS) and General Dynamics (Piranha 5), and the reason was not necessarily the quality of the equipment.
But almost all the other major projects are delayed. The acquisition of four multifunctional corvettes is now blocked as the government has accused some unclear issues in its own tender procedure won by France’s Naval Group – and the Ministry of Defense has notified the Military Prosecutor’s Office.
The decision has caused anger in Paris and France is now ready to sue the Romanian government as French top officials are exasperated by Bucharest’s will to deny to Naval Group the contract for 4 navy corvettes, despite the fact that the French group won the tender, according to the French economic journal La Tribune.
France’s Naval Group has the best bid with an offer of EUR 1.2 billion, followed by the Dutch group Damen (EUR 1.25 billion) and Italy’s Fincantieri (EUR 1.34 billion).
But the Romanian Ministry of Defence did not announce the result of the tender but preferred to notify prosecutors that some unreported irregularities had been detected during the procedure.
The modernization of the two British frigates is a project without any known schedule, and for the acquisition of military trucks the German group Rheinmetall accused the local government of bid rigging.
As for other major programmes, there are still no clear plans from the government.
This spending freeze comes in a moment when Romania’s need for military equipment is huge: its military procurement, modernization and expansion plan for 2017-2026 includes eight major projects, worth more than EUR 100 million each.