International Market Assessment (Brought to you by Janes) – France

France's Defence Acceleration

France's defence spending is rising sharply in 2026, with the military receiving an additional €6.7 billion compared to 2025 despite broader austerity measures elsewhere in the budget. This boost supports immediate procurements such as a new nuclear-powered attack submarine, hundreds of armoured vehicles, and Aster surface-to-air missiles, part of a longer-term modernisation under the Military Planning Law 2024-30.

The increases respond to persistent threats from Russia's invasion of Ukraine, now in its fourth year, which has exposed gaps in European stockpiles and capabilities. Combined with shifting U.S. policy signals under the current administration, these pressures have pushed NATO allies toward a new pledge at the 2025 Hague Summit: 5% of GDP on defence and related investments by 2035, with at least 3.5% for core military needs.

France, already meeting the earlier 2% target and reaching about 2.07% in 2025, is accelerating toward higher levels while emphasising European sovereignty. This includes championing joint EU initiatives like the SAFE instrument for collaborative procurement, which recently opened to non-EU partners including Canada.

The stakes are high: delayed modernisation risks capability shortfalls in key domains like air defence and space, while inaction could weaken France's role as Europe's leading arms exporter. Budget growth is projected to lift spending from around $66.7 billion in 2025 toward $91.8 billion by 2030, creating concrete opportunities in fixed-wing aircraft, submarines, and frigates—but fiscal constraints from debt servicing and competing priorities may temper the trajectory.

Tensions arise between France's push for European champions and the reality of industrial cooperation needs, alongside debates over funding sources amid high public debt. Export ambitions reinforce the industrial base but face competition from rising German and other European efforts.