Germany’s interest in Arrow 3 could presage European defense bonanza for Israel

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Germany’s interest in Arrow 3 could presage European defense bonanza for Israel​

Germany is in talks to purchase the IAI-built Arrow 3 ballistic missile defense system, according to a new report.​

By ARIE EGOZIon September 12, 2022 at 4:13 PM

An Arrow 3 is tested by IAI. (IAI)
TEL AVIV — With Germany now reportedly in talks to buy Israeli-made air defense systems, there is hope inside Israeli defense firms that a new spending-splurge on defense equipment may be coming from Europe. But the firms are also keeping a wary eye on what pressure Washington may bring to the European nations to instead buy American.
In public comments while meeting with German Chancellor Olaf Scholz Sept. 12, Israeli Prime Minister Yair Lapid declared that Israel “will be part of the construction of Germany’s new defense force, mainly in the field of air defense. Scholz, for his part, called the Arrow 3 a “high-performance offer;” a German source told Reuters that there is a “plan” to buy Arrow 3 but that specifics have not been worked out.
Such a sale, if it happens, would be the first time Israel has exported the Arrow to another country. And given Germany’s central role in Europe and the continents defense spending increase in the wake of Russia’s invasion of Ukraine, a deal could potentially drive other nations interested in integrating on air defense with Berlin to also purchase the system.
Produced by Israel Aerospace Industries (IAI) with funding from the US, the Arrow 3 is targeted at ballistic missile defense. Because the US provides money, it can veto any export of the system, but sources here say Washington has given its tacit approval for a sale to Germany if Berlin and Jerusalem can come to terms.
One Israeli senior defense official said that other European countries are already in negotiations with the Israeli ministry of defense and defense industries about systems that can upgrade their capability to defend themselves from Russian missiles. While air defense is the priority, other systems are also on the hastily prepared shopping list.
The senior source added that Poland, Romania and at least some of the Scandinavian countries are already talking with “the right people” in Israel about fast acquisitions.
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The only other major Israeli-made air defense systems under contract with Europe is in the Czech Republic, whose ministry of defense decided to purchase four Rafael-made Spyder batteries in 2012, including radars produced by IAI, in a contract valued at roughly $520 million. The agreement includes the involvement of Czech defense industries. Both the Spyder and Barak MX systems are also being evaluated by Romania.


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A presentation of Rafael’s Spyder and Iron Dome has been scheduled for early 2023, per the source; that would occur at Rafael’s test ground in southern Israel.
IAI and Rafael declined to comment, as did the Israeli ministry of defense.
While Israeli industry may be licking their lips at the chance for a big influx of cash from Europe, they are doing so with the understanding that Washington could tip the scale towards American firms instead.
That the US could encourage European nations to buy American is hardly new; there is a long tradition of nations backing their domestic arms producers in competitions, and DC is hardly a stranger to that. The hope for Israeli industry, then, is that they are still able to land sales even as some portion of increased European budgets inevitably flow towards the US (and Europe’s own domestic companies.)

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“It is very likely that pressure will be put by Washington on some proposed contracts,” predicted Amos Yadlin, a retired Israeli military officer and former head of the intelligence directorate. “ It will not be an across-the-board effort to undermine business with Israeli companies, but some proposed deals with Israeli companies will bring opposition from Washington.”
A former high-ranking official in one of Israel’s main defense companies said that American pressure should be anticipated when European countries re-arm, noting “At the end of the day, the European countries will buy what they think is the best solution.”
One nation unlikely to be buying Israeli weapons, even if there is interest, is Ukraine. Jerusalem made the political decision early this year not to sell advanced anti-tank missiles to Ukraine, in order not to disrupt the fragile arrangement allowing Israel to attack Iranian-related targets in Syria, a country controlled by Russia.
Kyiv has long shown interest in acquiring Israeli military equipment, particularly UAVs and communications outfits. However, in 2014, a deal between Kyiv and Israel drone maker Aeronautics was blocked by Russia and since then Ukraine has not officially received any military-technical assistance from Israel.
According to a defense source, the sensitive relations between Israel and Ukraine brought the Israeli ministry of defense to put strict “end user” regulations on countries like Estonia, Latvia and Lithuania, NATO members that purchased big numbers of the Spike missile manufactured by Israeli companies. As Breaking Defense previously reported, the three Baltic nations have been warned not to try and transfer the weapons to Ukrainian hands.

Germany's interest in Arrow 3 could presage European defense bonanza for Israel - Breaking Defense

Germany is in talks to purchase the IAI-built Arrow 3 ballistic missile defense system, according to a new report.

breakingdefense.com

 

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Berlin wants a pan-European air defense network, with Arrow 3 ‘set’ as first step​

The plan fits into a broader vision, laid out in recent weeks by German chancellor Olaf Scholz, of a united air defense front throughout Europe.​

By CHRISTINA MACKENZIEon September 13, 2022 at 1:06 PM

German Chancellor Olaf Scholz (R) and interim Israeli Prime Minister Yair Lapid speak to the media following talks at the Chancellery on September 12, 2022 in Berlin, Germany. The two are in discussions about the purchase of the Israel-made Arrow 3 missile defense system. (Photo by Sean Gallup/Getty Images)
PARIS — The former commander of the German Air Force has confirmed that Germany intends to buy the Arrow 3 air defense system from Israel, as a central part of what German Chancellor Olaf Scholz has described as a pan-European air defense network
In a telephone interview on Sept. 12 with Breaking Defense, retired Lt. Gen. Karl Müllner said the choice had been set and confirmed at a defense conference in Koblenz, Germany, two weeks ago.
Discussions about buying the Arrow 3 system have been reported by both German and Israeli media since early April. But Müllner said the decision is already more or less “set,” confirming a report from Reuters on Sept. 12.
The most important issue in the area of air defense is not “short-range air defense, the army’s air defense or even modernizing the Patriot missile system. It is [ballistic] missile defense,” writ large, Müllner said.
In an Aug. 29 speech at Charles University in Prague, Scholz laid out a vision of Germany at the heart of a pan-European air defense network, stating “we have a lot of catching up to do in Europe when it comes to defense against airborne and space-based threats” — something Müllner said was most likely driven by the threat from Russia’s Iskander missiles based in Kaliningrad, just 328 miles from Berlin.
RELATED: Germany’s interest in Arrow 3 could presage European defense bonanza for Israel
Germany “will be investing very significantly in our air defense over the years ahead. All of those capabilities will be deployable within the framework of NATO,” Scholz continued in Prague. “At the same time, Germany will, from the very start, design that future air defense in such a way that our European neighbors can be involved if desired — such as the Poles, Balts, Netherlanders, Czechs, Slovaks or our Scandinavian partners.”
However, a number of these countries have been making their own air defense arrangements for years, and several have stepped up procurement plans over the summer in the wake of Russia’s invasion of Ukraine:


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• Poland will be getting a short-range air-defense system using MBDA’s Common Anti-air Modular Missile (CAMM) with a range of more than 25kms. Originally slated for procurement in 2027, the first of two fire modules of the system, known as Narew, will be delivered later this month, with the second at the end of the year.
• Baltic states Latvia and Estonia signed a letter of intent (LoI) on June 30 to jointly procure an air-defense system, and on Sept. 7 Estonia and Poland signed an agreement to jointly procure the PIORUN Polish-developed short-range man-portable air defense systems (MANPADS).
• Finland has downselected two Israeli systems: Rafael’s David’s Sling and IAI’s Barak MX. A final decision will be taken in 2023.
• The Netherlands wants to buy 96 GEM-T missiles for the Patriot air defense system, in service with the Dutch military since 1987. In late July it was announced that the US State Department had approved the proposed sale worth an estimated $1.2 billion.
• As for the Czech Republic, it is helping provide air defense for neighboring Slovakia. Its JAS-39 Gripen aircraft started performing air policing missions earlier this month and will continue to do so until at least the end of 2023 when Slovakia’s new F-16 fighters should be operation to replace the Russian MiG-29s which are being decommissioned early.

But Müllner said, the Chancellor “doesn’t have in mind a political project because you always have to compromise and it will take longer, so this program will be decided nationally. But at the same time others are invited to participate.” He explained that participation from the neighbors in question “could range from decision-making procedures in NATO to financial participation or even buying their own missiles. It all depends on what they think both politically and militarily.”
Doug Barrie, a senior fellow for military aerospace at London’s International Institute for Strategic Studies, told Breaking Defense that there was “a lack of clarity” in the announcements, remarking that if the Arrow were a short-term, albeit very expensive fix at around $2bn, “it would still be less expensive than losing something strategic.”
“How does all this fit together? It’s like a jigsaw puzzle with pieces either missing or in the wrong place,” Barrie said, adding that “Berlin doesn’t have a fantastic history of clarity on land-based acquisitions.”

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Müllner explained that the capability gap in Germany’s air defense had its roots in that “10-12 years ago nobody really thought about a war with a peer enemy. The planners at MoD were focused on Afghanistan-type conflicts and never thought about war against an enemy with reasonable air capability. But now is a totally new situation and it’s become an obvious value to defend our own air space, so Germany has to do something.”
In mid-July, prior to Scholz’s speech, EU Internal Market Commissioner Thierry Breton announced a new €500 million fund to encourage European cooperation in defense matters — notably to acquire portable air defense (MANPADs), anti-tank guided missiles and artillery such as shells and the Caesar or Krab howitzers — to complement the European Defense Fund, which is aimed at R&D projects. That means that the more countries Germany gets involved with to develop air defense capabilities, the more money it could get from this fund, formally the “European Defense Industry Reinforcement through common Procurement Act” (EDIRPA). But Müllner said he didn’t think there was a link between Scholz’s announcement and EDIRPA.
This new €500 million instrument has three objectives:

• First, to help reconstitute EU member states’ weapon stocks, currently reaching dangerously low numbers because so much has been sent to Ukraine
• Despite almost €200bn extra money being pledged for defense by member states, the concern is that investments will be made along purely national lines leading to a fragmentation of efforts, a lack of interoperability and countering the European Defense Fund’s objective of helping to create an integrated European defense industry base. So this fund is a carrot to encourage member states to work together.
• To support European industry to adapt to reality and to the return of high intensity conflict on the continent

The €500m fund will be available for two years (2023-2024) and can only be used to incite member states to cooperate. The European Commission will not be buying weapons itself. The fund will support joint acquisition projects by a minimum of three countries. And the more member states are involved the more financial aid they will get. Eligibility will be the same as for those of the European Defense Fund.
Discussions to approve this initiative are expected to be held by the European Parliament and the European Council (the governments) this fall.

Berlin wants a pan-European air defense network, with Arrow 3 'set' as first step - Breaking Defense

The plan fits into a broader vision, laid out in recent weeks by German chancellor Olaf Scholz, of a united air defense front throughout Europe.

breakingdefense.com