CORONAVIRUS PANDEMIC AND THE PROSPECTS OF THE EUROPEAN UNION DEFENCE INDUSTRY DEVELOPMENT

The article analyzes the impact of the current crisis on the defence policy of the EU countries. Coronavirus has had a negative impact almost on all industries. According to the forecast of International Monetary Fund the growth of the world economy is expected to be at the level of -4.9%. In such conditions where social sphere including medical is going to be the most important one, governments are faced with the problem of relocation of their expenditures. Therefore, the military expenditures probably would suffer cuts like it was during last crises for example financial crisis of 2007-2008. The EU defence industry is also influenced by coronavirus crisis, this was yielded in the downtime and supply dates shifts during lock down. However together with armed forces defence companies were engaged in fight with coronavirus: production of medical and protective equipment, disinfection, transportation and etc. But these efforts cannot be considered as an efficient measure to limit negative impacts of coronavirus crisis on the prospects of defence industry. The following coronavirus crisis consequences for the defence industry can be outlined: stock prices fall, civil aviation crisis, supply chain disturbance and difficulties for small and medium enterprises during lock down. Such effects of course can slow down the development of the defence industry and complicate the operation. However the most crucial one is military expenditures cuts, because such changes put defence industry in the new environment with reduced demand for arms. Defence cuts are also a threat to the joint EU defence industry development programs. The importance of these programs is that their goal is to contribute to the military capability of the EU and these programs could be used for coronavirus crisis consequences overcome. However the budget allocated for these programs was also cut, so their implementation is hampered. But defence companies and their associations are working on the plans to boost the development. The author believes that in such conditions the key point for the successful overcome of coronavirus crisis and further sustained development of the EU defence industry is the joint efforts in this direction. The current level of cooperation between member state in the sphere of defence industry is not enough not only for the overcome of coronavirus crisis, but also for the development even in the standard conditions. Therefore the deepen of the cooperation is required and important like never before. As a result current crisis situation is a chance for the EU defence industry to joint the efforts in the defence sphere and expend integration in defence and security.