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Spain - Military Spending

The Ministry of Defense is convinced that Spain's military spending will reach 1% of GDP in 2021. It will still be a long way from the 2% set by NATO as a target for 2024, but it will be a leap from previous years, when it barely exceeded 0.90%, and Minister Margarita Robles will transfer it to her allied counterparts, according to sources in her department. The Defense budget for 2021 will be 9,409 million, a 4.6% increase. To this must be added some 600 million operations abroad and 676 credits from Industry. But the real reason that its level with respect to GDP increases is not because military spending is much higher, but because GDP will be lower.

By late 2012 the Ministry of Defense planned to reset and renegotiated the major weapons programs with which the State had acquired purchase commitments such as the A400M military transport aircraft (27 units), the S-80 submarine (4), the Pizarro armored vehicle during the first quarter of 2013 (190), and the NH-90 helicopters (45) and Tiger (24), as reported by the Secretary of State for defence, Pedro Argüelles. Such and was already the case with the Eurofighter program, where conversations with the industry were advancing. Various solutions might include the delay in the delivery of units, its reduction or sale [to a third country], to reduce the economic pressure on the Ministry, and reduce the national deficit. The Ministry had already managed to defer the delivery of 15 aircraft until 2015.

The General State budget approved for 2012 included an allocation of resources to the Ministry of Defence (sub-sector State) amounting to € 6.316,44 Million (M€), which represents a decrease of 8.84% with regard to the budget of the previous year and in relation to the GDP planned for 2012 (1.065.400 M€) a share of 0.59%. Including the approved budget for the autonomous bodies attached to the Department, which amounts to 1.095.303,94 m€, for 2012 budget consolidated by the Ministry of defence (sum of budgets less transfers between subsectors) becomes 7.351.484,32 m €, which represents 8.35% of reduction in relation to the consolidated from the past fiscal year and a participation of 0.59% of GDP planned for 2012.

The budget of the MoD in 2010 was €7.7bn (ie, 4.15% of the total Government spending). This figure represented a reduction of 6.8% from the 2009 budget, though the Government still aimed to maintain its commitment to existing modernisation programs.

At the end of 2010 the Ministry of Defense constituted a broad working group that developed the enormous task of compilation and updating of information relating to Special Programs of Armament (PEA - Programas Especiales de Armamento), auditing the financial situation and evaluating the results so that availability of a documentary collection that not only reflects thesituation of each and every one of programs but also of their different impacts on eachfield of interest and, especially, in the budget forecasts of the next years.

Special Programs of Armament (PEA - Programas Especiales de Armamento)
program name	Date of Council of Ministers authorization	Contractual Amount (SP0)	Spending Authorized ACM 2009 (SP1)	Amount Updated December 2010 (SP2)
Fragatas F-100	24/01/1997	1.683	2.007	1.810
Aviones EF 2000 (Eurofighter)	20/11/1997	9.255	9.255	11.718
Carros LEOPARDO	23/12/1998	1.910	2.390	2.399
VI LEGISLATURA	(1996-2000)	12.847	13.652	15.927
Aviones A-400	16/11/2001	3.453	4.443	5.493
Submarino S-80	05/09/2003	1.756	2.136	2.212
Buque Proyección Estratégico	05/09/2003	360	375	462
Helicóptero de combate TIGRE	05/09/2003	1.274	1.517	1.580
Vehículo PIZARRO (2ª serie)	05/09/2003	708	787	845
VII LEGISLATURA	(2000-2004)	7.549	9.257	10.592
Misil IRIS-T	23/12/2004	247	285	291
Fragata F-105	20/05/2005	750	823	834
Buque Acción Marítima (BAM)	20/05/2005	352	390	488
Buque de Aprovisionamiento en Combate	20/05/2005	213	229	238
Misil SPIKE-LR	20/05/2005	324	365	356
Helicópteros NH-90	20/05/2005	1.260	1.260	2.463
Misil ALAD (TAURUS)	24/06/2005	57	60	60
Obús REMA 155/52 SIAC	01/07/2005	181	196	200
Helicóptero medio UME	14/12/2007	76	76	80
Avión Apagafuegos UME	14/12/2007	44	41	41
VIII LEGISLATURA	(2004-2008)	3.504	3.724	5.051
Nodos CIS desplegables	24/12/2008	60	60	61
IX LEGISLATURA	(2008-2011)	60	60	61
TOTAL		23.960	26.693	31.631

By 2010 Spain was committed to a number of key programs that sought to modernise the Armed Forces (new surface and submarine ships, fighter and transport fixed-wing and rotary-wing aircraft, land armored vehicles…) but there were other areas of exploitation too such as troop protection, both individual and collective. A non-comprehensive list of the programs involved in the Spanish MoD modernisation scheme follows:

• Eurofighter aircraft. Spain had initially bought 87, though it was giving a second thought to the 3B tranche (14 items);
• A400M transport aircraft. 27 purchased. The participating nations have recently agreed on increasing their funding of the programme, which generates 2,000 jobs in Spain;
• 24 x Tiger attack helicopters. Eurocopter agreed to set up an assembly line in Albacete as part of their industrial offset package;
• IRIS-T missiles (770 units) to replace the current fleet of Raytheon’s AIM-9 Sidewinders;
• Modernisation programs of the EF-18 APlus Hornet, P-3 Orion and CN-235 maritime surveillance aircraft fleets;
• Strategic UAV Talarion program, with Germany and France, after the jet-propelled Barracuda demonstrator successfully flew in 2009;
• 45 x Eurocopter’s NH90 transport helicopters (deliveries starting in 2013);
• Mine hunting vehicles LMV and RG-31, deployed in Afghanistan as they are received to protect the Spanish forces;
• 8x8 armoured vehicles. The first phase only will include 300x units, for a value of c.€1.5bn. Tender delayed to the first half of 2010;
• Leopard 2E and Pizarro (Spanish Ascod) platforms, still in delivery (around 200 units of each type). These programs were due to finish by end of 2013;
• Army tactical UAVs (Searcher Mk II);
• 4 x S-80 submarines built by Navantia, due 2016. 2nd phase of this programme cancelled;
• Carrier & strategic projection ship Juan Carlos I. Built by Navantia in their Galician shipyards, the Spanish Navy’s largest ship ever was commissioned in mid 2010.

Other major programs recently accomplished include the delivery of 4x F100 frigates. And amongst those uncertain, the F-35B Joint Strike Fighter (to replace the AV8B Harrier II Plus aircraft), the BAMs or Maritime Action Ships and a new class of last-generation frigates called F110 are worth noting.

NON-FINANCIAL BUDGET (Current euro)
Year	State	Defense	%
2000	118.816.842	5.799.765	4,88
2001	124.373.138	6.060.765	4,87
2002	114.294.331	6.320.213	5,53
2003	114.516.798	6.477.224	5,66
2004	117.260.000	6.744.339	5,75
2005	124.575.760	6.988.186	5,61
2006	133.947.030	7.413.940	5,53
2007	142.925.690	8.049.986	5,63
2008	152.331.100	8.491.312	5,57
2009	157.904.270	8.252.932	5,23
2010	132.442.000	7.691.995	5,81
2011	122.022.000	7.153.546	5,86
2012	116.140.000	6.313.607	5,44

The defense budget for 1988 was set at 762 billion pesetas, or US$6.74 billion based on 1988 rates of exchange. It was apportioned on the basis of 37 percent to the army, 24 percent to the navy, 19 percent to the air force, and 20 percent to centralized functions (the Ministry of Defense). The army budget, which had constituted 46 percent of the total in 1982, had begun to diminish as a result of reductions in army force levels. The shift also reflected major weapons acquisitions programs by the navy and the air force. The cost of centralized functions had risen as a result of the development of the new command structure, the consolidation of many operations that had previously been administered by individual services, and the decision of the minister of defense to control major equipment acquisitions more directly.

NON-FINANCIAL BUDGET (Current euro)
Year	GDP	Defense	%
2000	629.907.000	5.799.765	0,92
2001	680.397.000	6.060.765	0,89
2002	729.258.000	6.320.213	0,87
2003	783.082.000	6.477.224	0,83
2004	841.294.000	6.744.339	0,80
2005	909.298.000	6.988.186	0,77
2006	985.547.000	7.413.940	0,75
2007	1.053.161.000	8.049.986	0,76
2008	1.087.749.000	8.491.312	0,78
2009	1.047.831.000	8.252.932	0,79
2010	1.051.342.000	7.691.995	0,73
2011	1.073.400.000	7.153.546	0,67
2012	1.065.400.000	6.313.607	0,59

The 1988 defense budget was somewhat higher than the corresponding figures for 1987 (703 billion pesetas) and for 1986 (630 billion pesetas). In real terms, however, the rise in defense allocations had been lower than the annual rate of 4.432 percent planned for the eight-year period 1982-90. Moreover, the military budget had declined as a percentage of the total government budget, from 13.2 percent in 1978 to 8.81 percent in 1986. Military expenditures also declined slightly, during the same period, as a percentage of gross domestic product (GDP), from 2.06 percent to 1.97 percent.

Alhough personnel costs remained high in proportion to total defense expenditures, a distinct reduction was recorded between 1982 and 1986, of from 49.9 percent to 44.5 percent. Expenditures for construction and materiel expanded from 34.8 percent of the total in 1982 to 42.3 percent in 1986. Operating costs (of 15.3 percent in 1982 and 13.2 percent in 1986) were proportionately somewhat lower. Although the army was gradually bringing its personnel outlays under control, they continued to be much higher than those in the other services--58.8 percent of its total expenditures in 1988, compared with 31.3 percent in the navy and 33.5 percent in the air force. Moreover, because of their earlier starts on modernization programs, much higher shares of the navy and the air force budgets (over 50 percent for each in 1986) were being invested in equipment and in construction than was true in the army (22 percent in 1986). According to a study prepared by the United States Arms Control and Disarmament Agency, Spain ranked thirteenth among NATO's sixteen nations in military expenditures per capita, calculated on the basis of 1985 defense budgets. With the exception of Luxembourg and Iceland, it ranked last in military expenditures as a percentage of GDP. Spain's defense outlays were well below the average of 3.4 percent of GDP attained by other European NATO countries.