Back to news

March 19, 2020 | International, Aerospace

Special US fund to replace Russian equipment in Europe is shifting its strategy

By: Aaron Mehta

WASHINGTON — A U.S. State Department fund to help European nations replace Russian-made weapons with American equipment has expanded to eight countries, but will be eschewing a second wave of funding in favor of targeted investments.

In 2018, the State Department quietly launched a new effort known as the European Recapitalization Incentive Program, or ERIP, a new tool developed alongside U.S. European Command to speed up the process of getting allied nations off Russian gear. The U.S. benefits both strategically — getting partners and allies off Russian equipment to improve interoperability and deny Moscow funds for maintenance — and financially, thanks to the sale of American weapons abroad.

ERIP funds, reprogrammed from unused dollars such as regional Foreign Military Financing, come in one-time bursts to help a country buy American-made alternatives to Russian kit. To get the money, the European nation must pledge to not buy Russian equipment in the future, while also at least matching the dollar value of the ERIP grant with domestic funding.

The initial funding round consisted of six countries, totaling $190 million in reprogrammed fiscal 2017 dollars. As of last May, the State Department was considering a second round of ERIP grants and was at least in early discussions with Latvia about the funding.

But in the time since, the department decided there won't be a second round, but rather ERIP will become a tool best used on a rolling basis. (Discussions with Latvia turned to different pots of money other than ERIP, according to a source.)

“There was a lot of discussions about a second round, but the way it's kind of evolving is, rather than look at it as rounds is, look at it as opportunities,” a senior State Department official told Defense News on condition of anonymity. “It's a tool that we can use when opportunities arise for us to work with a partner to make a difference.”

All told, the department has given out roughly $277 million in ERIP grants in the last two years — but, the official said, those relatively small dollars helped lock in roughly $2.5 billion in U.S. weapons sales. That's a win in “pure economic terms,” the official said, even before getting into the hard-to-quantify policy and political benefits.

“It was a pretty bold decision in trying to help some of these countries acquire a pretty high capability capital intensive, and for some of them it's their first major [Foreign Military Sales] case, period.”

Going forward, there may be tie-in money from EUCOM, which could kick in $1-3 million in small grants to nations that received ERIP dollars in order to help nations with maintenance costs on the newly bought American equipment. That money would likely come from DoD's Section 333 authority.

Asked about that potential. DoD spokesman Lt. Col. Uriah Orland said the department "continues to work closely with the Department of State in the planning of security assistance with our European partner nations that enables them to reduce their dependencies on Russia's defense industry and build and/or sustain their own defense capabilities.”

Targeted, ongoing funding

Bulgaria presents a notable example for how the thinking on ERIP is evolving. The country spent several years debating what fighter jet to purchase, with the finalists coming down to new F-16s from Lockheed Martin, secondhand F-16s from Portugal, Eurofighter Typhoons from Italy and Saab Gripens from Sweden.

As ERIP was envisioned, it would be used only for rotorcraft or ground vehicles. But with the government in Sofia teetering on the edge of rejecting the Lockheed deal, the U.S. State Department stepped in and used $56 million in ERIP dollars to push the F-16s over the edge and finalize a deal that could exceed $1.6 billion in costs.

“For countries where it's a politically contentious issue, whether for economic or political reasons” the fund can help make a deal happen, the official said. “We were able to close that gap with an ERIP grant that enabled them to make the purchase and acquire the capability.”

The second nation to get a targeted ERIP grant has been Lithuania, which in October announced plans to buy six UH-60 Black Hawk helicopters to replace its Soviet-made Mi-8 fleet. The State Department kicked in $30 million of ERIP funding to help complete that deal.

In fact, no one piece of equipment has benefited from ERIP as much as the UH-60, of which three of the eight ERIP grants has helped procure. The eight projects to date are:

  • Albania: $30 million for UH-60 procurement. The UH-60 is produced by Sikorsky, a Lockheed Martin subsidiary.
  • Bosnia and Herzegovina: $30.7 million for the Bell Huey II.
  • Croatia: $25 million for Bradley fighting vehicles, manufactured by BAE Systems. Croatia is also working to stand up local maintenance for the equipment.
  • North Macedonia: $30 million for Stryker vehicles, produced by General Dynamics.
  • Slovakia: $50 million for UH-60 procurement.
  • Greece: $25 million earmarked, but the government is still debating what to buy. Likely to either be Bradley vehicles or the M1117 Armored Security Vehicle from Textron. Greece stands out because, as a higher-income nation, they are technically ineligible for Foreign Military Financing dollars, but a political decision was made to support them with ERIP anyway, the official said.
  • Lithuania: $30 million for UH-60 procurement.
  • Bulgaria: $56 million for eight Lockheed-produced F-16s.

All of those deals except Greece and Lithuania are under contract, with a letter of request from Lithuania expected in the next few weeks.

As to future opportunities, “we always kind of have our eye open, and we rely on the country teams out in the field to bring us these opportunities and think about them,” the official said. Although at the moment there are no potential ERIP projects in the works.

“We continue to look at the Baltics, we look at the Balkans,” the official said, adding that “countries within Eastern Europe, the Baltics, the Balkans moving towards a new ground mobility or rotorwing systems with something to divest would be our top candidates.”

All of those deals except Greece and Lithuania are under contract, with a letter of request from Lithuania expected in the next few weeks.

As to future opportunities, “we always kind of have our eye open, and we rely on the country teams out in the field to bring us these opportunities and think about them,” the official said. Although at the moment there are no potential ERIP projects in the works.

“We continue to look at the Baltics, we look at the Balkans,” the official said, adding that “countries within Eastern Europe, the Baltics, the Balkans moving towards a new ground mobility or rotorwing systems with something to divest would be our top candidates.”

https://www.defensenews.com/global/europe/2020/03/18/special-us-fund-to-replace-russian-equipment-in-europe-is-shifting-its-strategy

On the same subject

  • Berlin aims to have "best equipped" NATO army division in Europe in 2025

    July 17, 2023 | International, Land

    Berlin aims to have "best equipped" NATO army division in Europe in 2025

    Germany is confident it will have the best equipped army division amongst European NATO allies in 2025, Army Chief Alfons Mais told Reuters, as countries are scrambling to gear up their troops in the wake of Russia's invasion of Ukraine.

  • In War, Chinese Shipyards Could Outpace US in Replacing Losses; Marine Commandant

    June 18, 2020 | International, Aerospace, Naval, Land

    In War, Chinese Shipyards Could Outpace US in Replacing Losses; Marine Commandant

    “Replacing ships lost in combat will be problematic," Marine Commandant Gen. David Berger writes in a forthcoming paper. "Our industrial base has shrunk while peer adversaries have expanded their shipbuilding capacity. In an extended conflict, the United States will be on the losing end of a production race.” By PAUL MCLEARYon June 17, 2020 at 4:44 PM WASHINGTON: The Commandant of the Marine Corps, Gen. David Berger, dismisses current Marine and Navy plans for amphibious ships as “obsolete,” and worries that in any conflict, China could replace damaged ships faster than the US in a draft operating concept obtained by Breaking Defense. The warnings are the latest in a campaign waged by the reform-minded Berger to overhaul how the Marine Corps trains and equips to meet the challenges of China and other advanced nations, while working more closely with the other armed services and allies around the globe. In the sharply-worded 22-page document, Berger rejects war plans anticipating a Cold War-style confrontation in which huge ships can creep close to shore free from the threat of precision-guided munitions being launched from batteries deep inland. He calls the current configuration of amphibious ships “the most obvious manifestation of this obsolete paradigm” in a draft document obtained by Breaking Defense. In an unsigned draft of the unreleased report, “Naval Campaigning: The 2020 Marine Corps Capstone Operating Concept,” Berger underlines the need for new thinking about how the Marine Corps and Navy will fight an advanced Chinese military that can control islands, coastlines, and vast swaths of the sea with aircraft carriers, a swelling blue ocean fleet and long-distance precision munitions. The old way of thinking “is also exemplified by our current amphibious warships and maritime prepositioning ships, which are large and built for deployment efficiency rather than warfighting effectiveness,” he writes. “These superb, multipurpose ships are extremely expensive—meaning we've never had the desired number.” Berger also raises significant concerns about the United States' ability to replace any combat losses, even in a short, sharp conflict. “Replacing ships lost in combat will be problematic, inasmuch as our industrial base has shrunk, while peer adversaries have expanded their shipbuilding capacity. In an extended conflict, the United States will be on the losing end of a production race—reversing the advantage we had in World War II when we last fought a peer competitor.” The stark admission comes as the Navy's shipyards struggle under the disruptions caused by COVID-19, leading the service to order an emergency call up over 1,600 Reservists to fill labor shortages to do repair work on aircraft carriers and submarines in a desperate effort to get them back out to sea as soon as possible. Berger takes care not to blame the Navy for building expensive, relatively slow amphibious ships to carry Marines across the globe. “These issues should not be construed as a criticism of our Navy partners who built the fleet—to include the types of amphibious warfare and maritime prepositioning ships the Marine Corps asked for—that was appropriate to the security era within the constraints of finite resources.” But that era is now over the Corps wants to build a more dynamic “inside force” of smaller ships that can operate within range of Chinese and Russian weapons and pack a potent offensive punch while offering more and smaller targets than the current amphibious fleet. But these small ships won't replace their bigger cousins — they'll come in addition to them, creating new issues for both Navy budgets and the limited number of shipbuilders who can produce hulls for the sea service. The ships will also need ports to call home. “One can think of basing forces and lots of smaller vessels in theater, but this raises the issue of where to put everything and doesn't seem to be a ready solution that replaces divestiture of large ships,” said Dakota Wood, senior research fellow for defense programs at The Heritage Foundation. In recent weeks, the Navy met with shipbuilders to talk about plans for a new class of logistics ship that can operate under fire and resupply Marines deep within the range of enemy precision weapons. The Next Generation Medium Logistics Ship would resupply both ships at sea, as well as small, ad hoc bases ashore. The ship fits within plans Berger has made to stand up several Marine Littoral Regiments designed to move fast and have their own integrated anti-air and possibly anti-ship weapons. The Corps and Navy are also looking to buy as many as 30 Light Amphibious Warships in coming years, which would be much smaller than the current amphibious ships. The draft document doesn't include any those specifics. But Berger has already done that work in previous statements and documents, where he outlined plans: to rethink the role that large amphibious ships play in future; divest of M1 Abrams tanks; cut artillery units; slash helicopter squadrons; and reassess the role F-35s might play in future operations. Berger has admitted he realizes he needs to undertake this transition within existing budgets, leading him to call for cutting tanks, helicopters, and even some end strength. But for the Navy, Wood said, “I think much of this will be added cost because it must maintain current capabilities (types of ships) while developing new capabilities. It does not have the luxury of getting rid of current before new replacements are ready.” A significant omission in all of these plans is the absence of a larger, coherent naval strategy. The 30-year shipbuilding plan, due to Congress in February, continues to be missing in action. A major Navy force structure review was rejected by Defense Secretary Mark Esper earlier this year. The force structure review, currently being taken apart by Deputy Defense Secretary David Norquist, is expected this fall. The Navy's plans are in such a fluid state that Vice Adm. Stuart Munsch, head of the service's Warfighting Development office, cited Chinese attention as a reason to decline to give a progress report in a call with reporters earlier this month. “I'm not going to divulge our intentions,” he said. “I'm very conscious that, if I say anything public, I'm an authoritative source and the Chinese will key on what I say, and likewise any kind of public-facing document that we put out as well.” Pressed to explain what the Navy's strategy for operating in a world with competing great powers looks like, Munsch said, “I'm not sure how you would see that keeping our intentions for warfighting classified is something you would want as an American citizen.” While Berger continues to push out papers and strategies for pushing the Marines into the future, the Navy, which will provide much of the lift he needs, is still at the drawing board. https://breakingdefense.com/2020/06/in-war-chinese-shipyards-can-outpace-us-in-replacing-losses

  • Sopra Steria sélectionné par le ministère des Armées

    March 30, 2021 | International, Aerospace

    Sopra Steria sélectionné par le ministère des Armées

    Sopra Steria confirme avoir été retenu pour mettre en place, aux côtés de la Direction générale de l'armement (DGA) et de la Direction de la...

All news