Norway's defense industry needs European integration, argues analyst

Norway's approach to its defense industry is too simplistic and requires a fundamental shift towards European integration, according to defense analyst John Berg. He argues that it is time to move power, money, and ownership into a European framework, moving away from a model that has left Norway isolated.

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Norway has chosen too simple a model for the defense industry. It is time to move power, money, and ownership into a European framework.

Berg criticizes Norway's stance since the 1990s, a period marked by significant cross-border mergers and acquisitions that led to the creation of large, often civil-military conglomerates like Airbus, BAE Systems, Thales, and Leonardo. While Swedish firm Saab also strengthened its market position through partial sales, Norway largely remained outside these developments. Norwegian companies like Kongsberg and Nammo have established international presences, but Berg contends they adhere to an outdated ownership model, relying on the assumption that the state will always provide financial support. This reliance, he notes, has not been subjected to public debate.

The analyst highlights the lack of comprehensive cost analyses for Norwegian defense materiel, particularly concerning development and industrial support appropriations, as well as export subsidies. He points to the persistent issues with helicopter projects since 2001, which have consumed substantial funds without delivering the necessary helicopter fleet. Berg notes that the acquisition of the 16 AW101 SAR Queen rescue helicopters was only achieved after the Ministry of Justice and Emergency Planning took over the project from the Ministry of Defense. Furthermore, he observes that the benefits of reciprocal acquisitions with the manufacturer, Leonardo, have not been fully realized, even as Leonardo has bolstered its European standing through acquisitions.

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We have never seen calculations of what Norwegian defense materiel costs us in total when we include appropriations for development and industrial support. Nor of how Norway subsidizes exports.

Berg suggests that the Ministry of Finance, rather than the Ministry of Defense, should lead defense procurement and industrial strategy. He believes that given the significant financial investments involved, the finance minister is best positioned to oversee these matters. With former NATO Secretary General Jens Stoltenberg currently serving as Finance Minister, Berg suggests Stoltenberg's extensive knowledge of the European defense industry could be invaluable. This shift is crucial, especially as Norway considers engaging with the Ukrainian defense industry and establishing multinational constellations, a task for which Norway lacks independent expertise. Berg contrasts this with Ukraine's understanding of the Swedish Gripen's field capabilities, unlike Norway's focus on F-35 capabilities driven by U.S. interests.

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The management should lie with the finance minister.