Covid-19 and the French Defence Technological and Industrial Base: Impact and Policy Responses

France suffered an almost total lockdown from 14 March 2020 to 11 May 2020, which then became partial until 2 June 2020. The arms industry was not requisitioned, but activity was not stopped either. A level of 75% of activity was maintained while the Ministry of Defence defined its priority needs during this period of COVID-19 notably towards the armed forces in military operations abroad. The most significant slowdown in activity has been observed in the aeronautical supply chain, which is very dependent on civil orders. There has also been a shortage of supply due to the closure of borders, hampering the progress of cooperative programmes or simply slowing down manufacturing when part of the components come from abroad. Exports have also suffered from this border closure. The measures taken by the French authorities were aimed above all at supporting the companies’ cash flow, specifically the SMEs, certain measures being specific to the Ministry of Defence. A toll-free number has been set up for defence SMEs to let them report any difficulties they may have. The Ministry has above all initiated a screening process for the 1,500 companies considered to be strategic, particularly for SMEs when they hold rare skills. It is undoubtedly these companies which will be targeted in priority by the recovery plan in favour of the aeronautical and defence sector announced on 9 June 2020. This plan notably provides for the establishment of an investment fund, the amount of which may reach € 1 billion to help SMEs in the aeronautics and defence sector (many of them being dual). Finally, the Ministry of Defence anticipated orders for € 600 million…