It is often overlooked: the rearmament of Europe is also an economic mega-project. For Belgian defense companies, it is of extraordinary importance not to miss this wave of billions.
“It is a new construction of six thousand square meters, spanning two floors. A new cafeteria will be located at the top. You have to take care of your people. The roof has been reinforced to ensure it can support our radars. They weigh ten tons and are always tested here first.”
Jan Bonte is a satisfied CEO. His company, Advionics, is doing well. As the successor to the Belgian subsidiary of Siemens, the company has focused on radar production throughout the years. Now that Europe is rearming, the demand for that technology is rising. Proof of this is the new building rising next to the Advionics factory hall in Oostkamp.
“Advionics works to a significant extent on defense, but we still view ourselves primarily as a technology company,” explains Bonte. “What we supply is so-called high-frequency electronics. This can serve for radars on frigates or communication between fighter jets, but also for sensors in cars or proton therapy in the treatment of cancer patients.”
Advionics’ showpiece is a new radar antenna. It no longer needs to rotate in circles like its traditional counterpart. “This is interesting for tracking aircraft, for example. Currently, your signal drops out for a few seconds due to the movement of the radar.” Recently, frigates of the German navy set sail equipped with the new antennas.
Trump
Advionics currently has a good two hundred employees but wants to grow. Now that American President Donald Trump is turning his home country’s gaze toward China more than ever, Europe must be able to protect itself. And fast. The new NATO standard means that member states must triple their annual military expenditures: from 325 to 900 billion euros by 2035.
Politically, there is hope that Belgian companies can surf along on this wave of billions. But after eighty years of peace, only a modest defense and arms industry remains in our country. FN Herstal is the only international player. Especially in Flanders, the sector consists mainly of SMEs that supply the continent’s defense giants — concerns such as Rheinmetall and Thales.
In any case, any economic return from our own rearmament is welcome. The new investment plan for the Belgian army provides for 34 billion euros in orders by 2035. While the goal is to have as much of this money as possible flow back into the local economy, that will not be simple. Scaling up alone appears to be a problem. Advionics’ order book, for instance, is bursting at the seams.
Bonte: “We need three things to scale up. One: people. For us, often those with fine motor skills. Two: machines. We are trying to invest in those. Three: space. That is why we are adding a building now. It will be ready by the end of this year.”
Bonte further emphasizes the importance of the quality of education. Like so many business leaders, he is hunting day and night for new employees. His slogan: Your talent won’t stay under the radar! “Good schooling is the starting point. We must ensure that enough of our youth follow STEM programs and that the quality of those graduating is high.”
Doubling
According to Agoria, the umbrella organization for Belgian technology companies, the domestic defense and arms industry could at least double in size over the coming eight years. That amounts to more than 10 billion euros in annual revenue. However, hurdles still need to be overcome. For instance, banks and universities are traditionally (very) reluctant to collaborate with the sector.
“Companies need certainty, and they are getting it with the new investment plan for the army. ” – Pascal Acket, defense specialist.
“It is important that after months of promises, the political level now has plans ready,” says Pascal Acket, former colonel and defense specialist at Agoria. “Companies need certainty, and they are getting it with the new investment plan for the army. Now they can start selecting projects, seeking foreign collaborations, investigating timelines, and so on.”
However, Acket notes a cautious Zeitenwende (turning point) at banks and universities. “For example, we have increasing contact with research centers like Imec and Flanders Make. A lot of money is being freed up, and naturally, interest grows immediately. Banks are also financially reassured more quickly now.”
Acket’s assessment does not seem wrong. Deutsche Bank, for example, says it is “honored” to provide 1.2 billion euros in loans for “the resilience of Europe.” The bank recently established a special team focused on defense. ING has also reported that internal guidelines regarding military investments have shifted from ‘no, unless’ to ‘yes, unless’.
Meanwhile, Minister of Defense Theo Francken is traveling the world to lend a helping hand to domestic defense companies. In the past eight months, he has visited Ukraine, the Netherlands, France, the United States, and India, among others. This week, it was Turkey’s turn. Francken is counting on a declaration of intent with Ankara regarding defense cooperation.
“Turkey is a key player in the global defense industry and is organizing the NATO summit next year; we want to further deepen our cooperation,” Francken responds. The country is, among other things, home to the renowned drone company Baykar—a technology our country wants to focus on fully from now on. Belgium is already quite strong in the field of underwater drones.
SCAF
Prime Minister Bart De Wever is also making an effort. For example, by pleading at the European level against fragmentation. Currently, major powers each maintain their own industries. In the future, many more joint projects must see the light of day. This way, smaller players can also benefit from rearmament. Otherwise, they face a story of economic loss.
The most famous example of this fragmentation is the turbulent development of the so-called European combat aircraft of the future: SCAF. France and Germany are clashing over the distribution of contracts. Belgium has been an observer in the project since 2023. There is a real chance that our country will soon join the development — if it continues at all.
“European rearmament has only just gotten underway, yet you notice that the national reflex remains strong in the large European countries,” explains Yf Reykers (Maastricht University). “Improving cooperation will truly be a long-haul effort. Ideally, at some point in Europe, someone needs to say: who is going to do what now? But that is a very sensitive issue.”
Reykers points to the statements of Eric Trappier, the idiosyncratic top executive of Dassault, the French aircraft manufacturer behind SCAF. “He now says he doesn’t see why we should be allowed to participate in the development of the aircraft. He is still angry about our order of the F-35.”
To ensure that Belgium reaps the rewards of Europe’s budding ‘defense era,’ we must, according to Itinera, “dare to lead instead of lagging behind.” In a recent report, the think tank argues for a “shortened trajectory” to 3 percent of GDP for defense. This corresponds to an extra 10 billion euros per year. Only in this way can our country connect with the European leading group and force its place at the ‘adult table.’
Danger
Back to Advionics in Oostkamp. And to the ethical questions surrounding the rapid revival of the domestic defense and arms industry. “I notice the shift in my own environment,” says Bonte. “In the past, people sometimes looked at you askance. But that negative image is disappearing.”
Bonte connects the economy with geopolitics. “It is important that Europe becomes more independent. And to do that, you must be able to protect yourself and thus have your own industry, instead of placing all your orders in the US. We are ready, here in our own country too. If German frigates are getting our radar antennas, perhaps that should also be possible for the new Belgian frigates?”
“Many states are using the war in Ukraine as a smokescreen to justify the replenishment, expansion, and modernization of their own weapons arsenals,” reads a report by the NGO Transnational Institute. According to the think tank, existing rules regarding the arms trade are being bent or ignored in the process, “leading to unbridled militarism.”
“The greatest danger, in my opinion, lies elsewhere,” says Professor Reykers. “We are going to spend an extraordinary amount of money on European defense in the coming years. But this entire rearmament will only be truly successful if it relies on a corresponding European industry. Otherwise, little will have changed in the end.”
According to Acket, the growth of the defense and arms industry will ultimately benefit society as a whole. “If you use the internet, you profit from technology that has its roots in military research. The same goes for warming up a bowl of soup in your microwave. This is about our safety, but in the long term, we will gain much more from these investments.”
Source: “De comeback van de Belgische defensie- en wapenindustrie”