Bordering Ukraine and with direct access to the Black Sea, the tempo of defence planning and defence-related acquisitions has never been more dynamic in Romania. With an estimated defence expenditure of 2.44% of GDP in 2023, of which 35.2% was dedicated to the acquisition of major equipment (including related R&D), Romania attracts the attention of defence suppliers as much as Poland does in the same region.
Romania is generally perceived as a European country that emphasises the opportunities for EU–NATO cooperation, while shying away from the discourse of EU strategic autonomy in defence. Romania is also known for its strong defence partnership with the US and for a relative preference for off-the-shelf military procurement from external sources, often government-to-government. The US’ designation of Romania in 2021 as a “Dependable Undertaking” only serves to reinforce this perception.
Aside from the US as its most prominent strategic partner, Romania has been procuring military equipment from a variety of other external sources, notably Israel, France, Switzerland, Italy and Türkiye. With the acquisition of 17 F-16AM/BM Block 15 combat aircraft from Portugal and 32 from Norway, these two countries can be added to the top defence equipment supplier countries.
The local defence industrial base is often described as lagging behind after 30 years of limited financing and a progressive loss of skills – largely due to the aging and retirement of the workforce –as well as being relatively decoupled from major defence modernisation efforts. However, the Romanian Defence Ministry’s Directorate General for Armaments (DGA) is transparent about the past, just as it is with current and upcoming major acquisition programmes, and provides some information about the participation of the local defence industry. However, obtaining a comprehensive picture requires researching and compiling information from multiple sources.
The emergence of structured approaches to reindustrialisation
Although the pace has dramatically increased lately, many of the major acquisition programmes are following a defence planning schedule that precedes the ongoing conflict in Ukraine.
Credit: US Army/Pfc Jason Klaer
A strong modernisation trend started in 2017 with the adoption of the Armed Forces’ Acquisition Plan for 2017–2026. Long forgotten by now, this Plan had been initially withdrawn from the meeting agenda of the Supreme Council of National Defence (CSAT) – Romania’s defence decision-making body – because it had not met the political agreement to allocate 2% of GDP for defence. The revised Plan respected the political agreement, and also allowed the initiation of procedures for eight acquisition programmes with a total value of around EUR 9.8 billion, approved by the Romanian Parliament a few months earlier. According to Romanian law, the contracting authority has the obligation to request prior parliamentary approval for the initiation of award procedures with an estimated value of contract equal to or higher than the equivalent in Romanian RON of EUR 100 million (excluding VAT).
Greater Romanian defence industry involvement was planned as part of this series of acquisitions. At the time, it was hinted that all defence-related acquisitions – with the exception of government-to-government ones (G2G) – would have to involve cooperation with local industry. Whereas in defence speak this is generally known as ‘offsets’, readers should be reminded that, for many years, the principle of ‘offsets’ has been a difficult topic in the EU context. Though never actually banned, because it was understood that “any unilateral intra-European decision to abolish offsets would severely hinder the competitiveness of the European defence industry in the global market”, “since 2005, the EDA Member States have sought consistently to act together to develop a more open and competitive European defence market”, as noted in the European Defence Agency’s (EDA’s) Industry & Market Directorate In-House Study ‘Abatements: a pragmatic offset tool to facilitate the development of the European Defence Equipment Market’. As an enabler, a Code of Conduct on Offsets was adopted in 2009 with the participation of 25 EDA Member States and Norway.
The actual consequences of this approach to offsets on the EU defence industrial base as a whole – both positive and negative – can only be analysed with hindsight in a separate article; nevertheless, this issue highlights the sensitivity and difficulty of decision-making processes that have to consider numerous variables.
Several prominent acquisitions initiated in 2017, many of which are now being implemented, involve cooperation with local defence industry partners. The acquisition of up to 227 Piranha 5 wheeled armoured vehicles in six different configurations and initial logistic support from General Dynamics European Land Systems (GDELS) is one of them. Still in the implementation phase, this acquisition programme involves the production of the vehicles in Romania under a strategic cooperation and technology transfer agreement between GDELS-Mowag and Romanian company Uzina Mecanică București (UMB), part of the Romanian National Company ROMARM. In this context, the UMB facilities were renovated and UMB employees were trained in Switzerland for series production of the Piranha 5.
The acquisition of seven PATRIOT long-range surface-to-air missile (SAM) systems was approved by the US State Department in 2017 and implemented a few months later through a contract worth USD 3.9 billion awarded to Raytheon and Lockheed Martin. This acquisition did not include industrial cooperation, but it is likely that the conflict in Ukraine triggered an expansion compared to the initial planning. In May 2022, a Memorandum of Understanding (MoU) was signed with Raytheon Missiles & Defense for the co-manufacturing of SkyCeptor intercepting missiles in Romania by Electromecanica Ploiesti, a subsidiary of ROMARM. In August 2023, this was confirmed through the signature of a Letter of Intent between Electromecanica Ploiesti and Raytheon Missiles & Defense for the effective start of the production collaboration.
Credit: RTX
The first two PATRIOT batteries were delivered to Romania in 2022, and two in 2023. Romania also participates in the recent joint procurement of up to 1,000 PATRIOT PAC-2 GEM-T missiles under the European Sky Shield Initiative (ESSI) coordinated by the NATO Support and Procurement Agency (NSPA). The contract, worth up to USD 5.6 billion, was awarded in January this year to COMLOG – a joint venture between Raytheon and MBDA Germany founded in 1987. In this context, Romania is expected to acquire 200 PAC-2 GEM-T missiles for its PATRIOT systems.
Another high-visibility programme initiated as part of the 2017 plans, now in implementation, is the acquisition of High Mobility Artillery Rocket Systems (HIMARS) and related support and equipment, approved by the US State Department for Foreign Military Sales (FMS) for an estimated cost of USD 1.25 billion. However, this contract does not include the significant involvement of Romanian industry.
Some programmes initiated in 2017 were also delayed, with naval capabilities being the most affected. For this reason, acquisitions in this sector are expected to be prioritised in the future. One example of a delayed programme, eventually solved relatively rapidly, is the Mobile Anti-Ship Missile Launch System (SIML) programme intended to arm the two modernised Type 22 frigates and the four multirole corvettes, which were also planned for acquisition since the last decade. Four companies were initially admitted for negotiations during the initial procurement procedure: Boeing (US), Kongsberg Defense & Aerospace (Norway), Saab Dynamics (Sweden) and MBDA (France), but only MBDA submitted an offer in the second phase of the procedure. According to the Romanian MoD’s news page, Inforadar, the negotiation failed because the contractor imposed non-negotiable conditions, unacceptable for the MoD at the time, since they fell outside the scope of the initial plan.
The acquisition of SIML eventually moved forward thanks to the signature of an FMS agreement in 2021 with the US to acquire the Naval Strike Missile (NSM) Coastal Defense System (CDM), which should be completed in 2024. Raytheon, in collaboration with Kongsberg, are providing the systems, estimated to be worth up to USD 217 million, if all options are implemented. The deal is said to involve technological and industrial cooperation, namely a production and maintenance capacity established at the level of a Romanian economic operator. However, it is unclear if and what company or entity was selected to fulfil this task.
Similar to the cooperation model established with GDELS for the Piranha 5, the Romanian government expressed the intent in 2017 to acquire four corvettes and to renovate the existing T22R frigates for the navy. Nonetheless, in August 2023, the Romanian MoD cancelled the competition procedure, won in 2019 by the French Naval Group to build four Gowind corvettes and to renovate two existing T22R frigates in partnership with Santierul Naval Constanta. The reasons for this cancellation have been widely reported as: initial legal challenges raised by competitors, followed by the refusal of Naval Group to sign the framework agreement.
Credit: US Navy/Spc Josiah J. Kunkle
Now deemed to be an essential procurement, several future acquisition scenarios are speculated. The organisation of a similar competition is considered a low probability whereas a G2G procedure, either with France or with the US, a high probability. Since Romania acquired NSM, and because the Damen corvette Sigma 10514 (main competitor) can be armed with US solutions, and also since Damen already has two shipyards in Romania, some speculate the high probability of a G2G agreement with the US Government where the building is subcontracted to Damen and the corvette armed with US equipment. However, this is not the only scenario of a potential G2G agreement with the US. On the other hand, procurement from France is still not excluded, especially in a context where relations between the two countries are assumed to have strengthened after France decided to become the Framework Nation for the multinational battlegroup hosted by Romania, as part of NATO’s forward presence. If not with the corvettes, French cooperation with Romania in some areas seems likely to happen in the coming years.
Very promising negotiations were held before 2020 on the acquisition of AH-1Z Viper and UH-1Y Venom helicopters from Bell Helicopter (US) for Romania’s land forces. The helicopters were supposed to be produced in a second phase at the Romanian company IAR Brasov. In view of this, in 2016, Bell Helicopter signed an MoU with IAR-Ghimbav Brasov Group. However, the acquisition did not materialise, and other actors subsequently expressed interest in providing helicopters, such as Airbus and Lockheed Martin/Sikorsky.
While nothing concrete has happened on this front since then, in 2022, on the margins of the visit of French President Macron to Constanța (to meet French soldiers deployed on ‘Mission AIGLE’), the French and the Romanian Defence Ministers – Sébastien Lecornu and Vasile Dincu, respectively – signed a Letter of Intent (LoI) aimed at “developing the capabilities of Romanian Naval Forces” though the French MoD did not disclose much about the scope of the cooperation. However, the Romanian Minister of Defence was quoted by the Bulgarian publication Actualno, announcing the signature of the LoI and hinting that this also concerned the acquisition of helicopters and of Scorpene submarines. In October 2022, the Romanian MoD officially asked the Parliament to approve the acquisition of Airbus H215M helicopters equipped for anti-surface vessel warfare (ASuW) for the Romanian Navy, at an estimated cost of EUR 150 million. The delivery of the first helicopter is expected in 2026. This acquisition does not remove the unknowns concerning procurement of helicopters for the land forces, but the likelihood of acquisition from a European provider is not excluded.
Credit: US Navy/Spc Josiah J. Kunkle
Airbus has a production unit in Romania – Airbus Helicopters Romania – a joint venture between Airbus Helicopters (60%) and IAR (40%) established in 2002. According to the Airbus website, “Airbus’ commitment to Romania deepened in 2016 with the creation of a new plant, whose primary goal is to produce the H215M helicopter.” However, due to a lack of orders, on 17 October 2019 the company suspended the construction of the factory. The H215M are expected to continue to be produced outside the country.
Local defence industrial capacity confirmed among priorities
Romania’s Military Strategy issued in 2021 provides continuity to the modernisation efforts previously initiated and guides the implementation of its two multiannual modernisation programmes, ‘Armata 2026’ and ‘Armata 2040’. The strategy highlights that inconsistencies between the national defence industry’s capacity to produce weapon systems (…) and the needs of the Romanian Armed Forces could be a potential vulnerability, and prioritises support actions aimed at strengthening the economic-industrial base and the defence industry. In April 2021, the Parliament also approved the start of 10 new acquisition programmes, many of which are currently in the “implementation” or “preparation” phase, as identified on the MoD’s DGA website.
Triggered by the Russian war of aggression against Ukraine, the original ‘Armata 2040’ programme was updated by CSAT in October 2022 to include the reconfiguration of acquisition programmes and efforts to restore stocks and the modernisation of defence industry. This was followed, in October 2023, by the approval of the Romanian Armed Forces’ Acquisition Plan for 2024–2033, that equally considers the change in the regional security situation and, apparently, restates the importance of retaining a functional sovereign defence industrial capacity. While the plan is not available to the public, and little has been unveiled so far regarding its content, some of the acquisition priorities can be guessed from the history of uncompleted past procurements and from recent high-visibility announcements, such as the acquisition of the F-35 Lightning II Joint Strike Fighter, or of two Scorpene submarines. In addition, the MoD’s DGA website lists the most important programmes under preparation in the short term. Some of them are currently in the awarding or competitive bidding process.
The competition for 1,059 light armoured tactical vehicles (L-ATV) was completed recently, with Turkish company Otokar the sole bidder. Purportedly, other companies decided not to bid due to contractual conditions requiring that more than half of the vehicles be assembled in Romania, as well as maintenance to be carried out by local defence industry partners.
An award procedure is underway for 298 tracked IFVs. According to analysts, a choice will be made between Rheinmetall’s Lynx, GDELS’ Ascod, BAE Systems Hägglunds’ CV90, and Hanwha Aerospace’s Redback. If technology transfer and industrial collaboration is part of the contractual obligations, the companies that already have a presence in Romania might have an advantage.
The competition for the acquisition of 27 short-range air defence and very short-range air defence systems (SHORAD/VSHORAD) is also underway. Whereas the winner will be chosen based on the best price-performance ratio, as well as proposed delivery terms (weighing 20%), this procurement also seems to involve some political sensitivities. Based on statements by anonymous MoD sources, scenarios circulated that this acquisition could take two directions: a bidding process effectively launched at the end of 2023, and acquisition of MBDA’s Mistral 3 as part of the multinational joint procurement programme led by France.
Several names were also circulated to have entered the competition but without being confirmed by official sources; for example MBDA with the VL Mica and Mistral 3, Rheinmetall Air Defence with Skyranger 30 and Skyranger 35, Kongsberg with NASAMS, Diehl Defence with IRIS-T SLS and IRIS-T SLM, and Rafael with SPYDER. Some analysts have suggested that the cooperation agreement signed in 2017 between MBDA and Electromecanica Ploiești, a ROMARM subsidiary, could be an advantage for the company.
A multitude of programmes require high absorption capacity
While the number of ongoing and planned defence acquisitions by Romania is impressive, they cannot all be covered in this article. The multitude of programmes that will have to be managed firmly sets the Romanian defence industry on the path to modernisation, but it also increases pressure to establish effective processes to be able to quickly absorb such a large quantity of technology and knowledge.
In this respect, it is worth noting that in December 2023, a Government Emergency Order (No. 124/2023) was adopted, which streamlines the operationalisation and implementation of development, technological and industrial cooperation in security and defence. It also establishes and defines the operation of a Romanian Agency for Technological and Industrial Cooperation for Security and Defence. The new agency will build on the foundations of the existing Office for the Compensation of Acquisitions of Special Technologies, and will receive new responsibilities.
Complex acquisition programmes will have to be implemented in the coming years; these will require highly effective logistic and maintenance operations, if not more complex development and production.
The acquisition of F-16 Fighting Falcons from Portugal and Norway is one of these acquisition programmes since both the maintenance and modernisation infrastructure is developed in Romania, with Romanian company Aerostar Bacau designated as maintenance centre. It is still unclear how the preparation for the transition to the F-35 Lightning II Joint Strike Fighter will be made, though this is doubtless a high priority on the MoD’s agenda. The acquisition of 48 F-35s was confirmed in October 2023 following parliamentary approval and will be implemented in two tranches: two squadrons of 32 jets in Phase 1 for a total of USD 6.5 billion initiated in 2023, and one squadron of 16 jets in Phase 2, the value of which is to be determined at a later stage.
Credit: Lockheed Martin
The supply of Watchkeeper X tactical unmanned aerial vehicles (UAVs) from Elbit Systems, for an approximate value of USD 410 million started in 2023, with the first purchase order made for the initial three out of the seven units. Aerostar Bacau will also be involved in the implementation of this programme. A collaboration agreement was signed in 2021 with the UK joint venture U-TacS for the potential production of the Watchkeeper in Romania. The collaboration is also likely to include Thales Systems Romania, Romaero S.A. and the National Institute for Aerospace Research (INCAS).
It is unclear how much logistic and maintenance support will be needed for the announced acquisition of 54 Abrams M1A2 SEPv3 tanks or the operation of Bayraktar TB2 UAVs, but additional needs for logistics and maintenance capacity can be expected.
What next for the Romanian industrial base?
In a context where the revitalisation of defence industries across Europe is essential, the Romanian defence industry clearly has something to offer. To varying degrees, partnerships with local defence industry partners were and still are covered by many major acquisition programmes, but they have never been strongly enough emphasised. As such, public awareness about industry’s potential is relatively low. At the same time, the core of the Romanian defence industry is still state-owned, which makes it subject to specific constraints. However, this is not only a characteristic of Romania, but of other countries in the region as well.
If the gaps in the defence industry start to be filled, more political determination and vision is needed to adopt holistic policies and industrial strategies that connect the rest of the industrial base – civilian and private industries – with the defence planning process, thereby increasing overall industrial capacity, security of supply, and resilience in the long term. In the wake of four elections scheduled for 2024 – local and Euro-parliamentary, presidential, and parliamentary – thinking of defence in holistic terms, across the spectrum of all policies may be welcome.
Manuela Tudosia
