German Chancellor Olaf Scholz, right, and Nato Secretary General Jens Stoltenberg in Berlin on June 19. The Nato alliance will hold its annual summit next week in Lithuania. Getty
German Chancellor Olaf Scholz, right, and Nato Secretary General Jens Stoltenberg in Berlin on June 19. The Nato alliance will hold its annual summit next week in Lithuania. Getty
German Chancellor Olaf Scholz, right, and Nato Secretary General Jens Stoltenberg in Berlin on June 19. The Nato alliance will hold its annual summit next week in Lithuania. Getty
German Chancellor Olaf Scholz, right, and Nato Secretary General Jens Stoltenberg in Berlin on June 19. The Nato alliance will hold its annual summit next week in Lithuania. Getty


What is Nato doing to establish an artillery edge in Europe?


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July 03, 2023

As recently as the Nagorno-Karabakh conflict of 2020, the advent of drone warfare was seen as bad for tanks and particularly detrimental for the future of artillery formations.

Ukraine, with its long front line where two fully formed armies are waging battle, changed all that – even as drones played a leading role in the fight, the shelling is what shapes the battle.

The Nato alliance holds its annual summit next week in Lithuania and the obvious question is: what are the members doing about establishing an artillery edge in Europe?

It appears the answer is not yet clear and that goes to the heart of the alliance’s seriousness as the foremost military bloc in the world.

Ursula von der Leyen, President of the European Commission, announced a rapid investment in output of artillery shells earlier this year. She said anything was possible.

The actual systems that deliver these shells are in short supply too, and Nato’s defensive plans for Europe revolve around these challenges. It is at the heart of how the alliance intends to fight.

Confidence in Europe’s rearmament relies on Nato’s leadership getting the big guns out of the factories sooner rather than later

There has been plenty of talk about learning the lessons of the successes Ukraine has racked up on the battlefield against what was thought to be a superior enemy.

For example, Ukraine won praise last week from the International Institute of Strategic Studies. In a report it said Kyiv had “rapidly incorporated foreign weapons and technology”, specifically mentioning the deployment of the US Himars precision rocket artillery. It pointed out the enabling factors that Ukraine had been able to put around the systems, often by improvisation, such as buying the Chinese-made DJI drones.

Europe’s land armies are now looking at this response as the key to its upgraded priorities.

Even before the Russian invasion of its European neighbour, the question posed for Nato was summed up by French President Emmanuel Macron’s jibe in 2019 that the organisation had become "brain dead".

Just the summer before the Ukraine war, Nato operations were exposed to strategic failure by the collapse in Afghanistan, which had been its most ambitious mission this century.

Don’t forget the impact on many Mena countries of the 2011 intervention in Libya that has not produced a better outcome.

The legacy of these conflicts, and the role of leading Nato states in Iraq, was to bend the alliance out of shape. Military planners' jargon had every sinew stretching to develop a light-footprint expeditionary operation model of war fighting. Now the switch to a more conventional configuration for war fighting in Europe remains a goal but not yet the face of European military power.

Equipment and structures are still far behind where planning scenarios envisage. Training is the third leg of this framework and also lags

The IISS report lists the battle tanks, fighting infantry vehicles, self-propelled artillery and other systems that are currently part of more than a dozen Nato countries' militaries. The numbers for most are listed in the dozens or low hundreds.

Charles Michel, President of the European Council, right, Ursula von der Leyen, President of the European Commission, left, and Ulf Kristersson, Sweden's Prime Minister, following a EU Council summit in Brussels on June 30. Bloomberg
Charles Michel, President of the European Council, right, Ursula von der Leyen, President of the European Commission, left, and Ulf Kristersson, Sweden's Prime Minister, following a EU Council summit in Brussels on June 30. Bloomberg

As Ms von der Leyen said in February, what is needed to upgrade the output of artillery ammunition alone in Europe is to move mountains.

In May she returned to her message saying the Commission was still pushing the armaments industries to “ramp up” production.

Last week, Ms von der Leyen was welcoming the next piece in the puzzle for the Europeans. The common procurement initiative, known as EDIRPA, will use the EU budget to spend €300 million ($326 million) on arms purchases for member states. One of the avowed goals of the initiative, a quid pro quo, is that one third or more of national defence spending should be devoted to pan-EU programmes.

The architects of the scheme foresee three benefits: stopping the fragmentation of European buying power, boosting investment in the local ramp up and providing market strength to the additional defence spending.

All that is for the long term. The immediate need is to sign contracts and here the record is less impressive than the scroll of names given to these systems. Names like Starstreak, Boxer, Jaguar and Archer look very impressive in press releases. Often the numbers of each put on order are packing less of a punch.

What this is all about is readiness. An announcement last month from Germany should serve as wakeup call of a rising benchmark. Berlin said it wanted to station a “permanent, robust” force around 4,000 troops to Lithuania to strengthen the alliance’s eastern flank.

German Defence Minister Boris Pistorius made the statement in the Lithuanian capital of Vilnius. The timing ahead of the Nato summit in the same city next week was clearly a vote of confidence in Nato’s new-found virility.

It is also quite a step change from what was called the high readiness rotating task force model that had been deployed as a kind of souped-up military exercises since the Baltic and Eastern European states joined the Nato expansion 15 years ago. The deterrence effect of this approach was touted after the 2014 Russian annexation of Crimea and the Donbas but proved nothing of the sort.

Beware when listening to pledges of a military build-up that prioritises battlefield iron and steel just as much as tech. In the wake of the Wagner rebellion that shook the Kremlin, the share prices of big arms manufacturers like Germany’s Rheinmetall suffered falls as investors feared a quicker resolution in Ukraine.

Confidence in Europe’s rearmament relies on Nato’s leadership getting the big guns out of the factories sooner rather than later.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Trump v Khan

2016: Feud begins after Khan criticised Trump’s proposed Muslim travel ban to US

2017: Trump criticises Khan’s ‘no reason to be alarmed’ response to London Bridge terror attacks

2019: Trump calls Khan a “stone cold loser” before first state visit

2019: Trump tweets about “Khan’s Londonistan”, calling him “a national disgrace”

2022:  Khan’s office attributes rise in Islamophobic abuse against the major to hostility stoked during Trump’s presidency

July 2025 During a golfing trip to Scotland, Trump calls Khan “a nasty person”

Sept 2025 Trump blames Khan for London’s “stabbings and the dirt and the filth”.

Dec 2025 Trump suggests migrants got Khan elected, calls him a “horrible, vicious, disgusting mayor”

Retail gloom

Online grocer Ocado revealed retail sales fell 5.7 per cen in its first quarter as customers switched back to pre-pandemic shopping patterns.

It was a tough comparison from a year earlier, when the UK was in lockdown, but on a two-year basis its retail division, a joint venture with Marks&Spencer, rose 31.7 per cent over the quarter.

The group added that a 15 per cent drop in customer basket size offset an 11.6. per cent rise in the number of customer transactions.

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Updated: July 05, 2023, 8:17 AM