Can Macron’s Defense Dreams Stick The Landing?

A lot is riding on the rearmament boom in Europe, from supporting Ukraine to building a stronger and more independent domestic industrial base, and Emmanuel Macron knows it. This week, he brandished a potential mega-order from Kyiv for 100 Dassault Aviation Rafale jets – worth billions of euros – and called for a redoubling of efforts to get a sixth-generation Franco-German fighter jet off the ground. There's a "duty" to get the project done, he said.

But it's easier said than done at a time of strained budgets and fractious politics. The Rafale deal, for example, looks highly aspirational. Spare French taxpayer cash for Ukraine is in the millions rather than the billions, as a gridlocked parliament and fragile government struggle to curb a runaway deficit. This means a lot depends on France's ability to tap European cash instead, from joint defense loans to billions in frozen Russian assets.

And there's also a lot of hope behind Franco-German projects like the Future Combat Air System, a sixth-generation jet combined with drones and data proposed back in 2017 as one of several joint initiatives. Forcing very different companies (including Dassault) and cultures to work together is hard, and the FCAS has been plagued with in-fighting. The popularity of Dassault's Rafale hasn't helped, with the firm now threatening to go it alone.

Time is running out for Macron and his European partners to take the bull by the horns, whether it's overhauling the way cross-border defense projects are distributed to reduce dependence on Donald Trump or taking risks with frozen assets when it comes to standing up to Vladimir Putin. With Macron a diminished figure, 2027 presidential elections looming and the US ramping up pressure for a peace plan, there may not be many chances left.

France's chief of defense staff said the country had the military and economic power to deter future aggression from Russia but lacked "strength of spirit" to accept suffering.

Ubisoft Entertainment SA said it's in breach of a loan agreement after auditors told the video-game publisher to delay recognizing revenue from a recently signed partnership and forced the company to restate its 2025 fiscal accounts.

France's private sector stagnated in November as the services sector defied persistent political uncertainty over the budget.

Veolia has entered an agreement with Enviri to buy US hazardous waste firm Clean Earth for an enterprise value of $3 billion.

Renault SA and China's Geely are investing 3.8 billion reais ($714 million) in Brazil to develop new models together after the two automakers decided to join forces to better compete in South America's largest market.

Paris apartment prices jumped the most since the end of 2020 in the third quarter.

Wednesday - Paris court holds urgent hearing on government request to suspend Chinese fast-fashion giant Shein.

Thursday - Remy Cointreau update.

Friday - Preliminary November CPI inflation, Q3 GDP, November consumer confidence, Oct consumer spending, Oct PPI data, Q3 payrolls.

Japan's second-hand fashion market is booming – in part because of a $10 million Birkin bag bought at Sotheby's Paris in July.

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Source: Bloomberg Europe