Brexit Could Scale-back European Defense Spending

British exit (Brexit) could slowdown collaboration and purchases across Europe. Brexit will make European countries to scale back defense spending and also prompt companies across Europe to rethink their strategic goals.

The analysts at Berenberg were quoted as saying by IFA magazine that the impact would be “benign” given that less than 10.0% of the group’s sales came from within the European Union, nor did they see any negative fall-out on BAE’s trading with individual countries.

Big European defense firms have seen their stocks slide in recent weeks, even as US giants are up. Over the first two weeks of June, Italy’s Leonardo (né Finmeccanica) was down 15 percent, Sweden’s Saab down 6 percent, and France’s Thales down 8 percent, Defense One reported Monday. U.K firms BAE Systems and Cobham are down 2 percent and QinetiQ is down 6 percent. American Lockheed Martin, Northrop Grumman, and Raytheon are up 2 to 5 percent.

Berenberg thinks there could be a delay in the production phase of Type 26 Combat Ship which the firm is currently developing.

"If the UK votes to leave the EU, we would almost certainly enter into a period of uncertainty as the details are worked out." BAE Systems CEO Ian King had warned its staff of the risks of Britain leaving the EU, Sky News had reported earlier this month.

Airbus Group Chief Executive Tom Enders was quoted as saying by Reuters Thursday that, "If Britain leaves, I cannot imagine that this would have positive consequences for our competitiveness in Britain."

Roger Carr, chairman of BAE Systems said, "I am a supporter of making it (the EU) better, more competitive and therefore seeking to improve it, but I still believe you can do that more effectively as a family member within rather than as a critic outside."

Leonardo Finmeccanica lost further ground after the fall yesterday with the fear that Britain exits European Union.  LEONARDO-Finmeccanica will have to assess its operations in Yeovil if the UK votes to leave the European Union, according to John Ponsonby, the managing director at AgustaWestland.

He said that an out vote in the referendum on June 23 would cause "uncertainty".

Mr Ponsonby was speaking at the roll out ceremony of the AW101 NAWSARH at Leonardo's Yeovil base last month, where the helicopter was formally unveiled to the Norwegian Ministry of Justice and Royal Norwegian Air Force as part of a £1bn deal.

Brexit a negative impact on Polish military security. The tense atmosphere is not conducive to joint projects arms, whose main example is a multirole combat aircraft Eurofighter Typhoon.