Allies hope for a European defense policy from Germany

After four months of war in Ukraine, one thing is clear: Germany has finally said goodbye to wishful thinking about defense policy.

The “turning point” declared by Federal Chancellor Olaf Scholz has prevailed both in the budget and in politics. Of course, this doesn’t happen without headwinds, but after all, you can’t create a new consensus in four months either.

It is at least clear to see that the federal government and parties are trying to face the challenges of a new, uncertain world order. So much clarity is also welcomed abroad.

However, there are also risks in this radical rethinking of German defense policy. Germany’s contribution to the European project is undisputed, and Berlin’s commitment has led to a real push towards integration in the common defense policy (PESCO) and the further development of the economic union (Next Generation EU). It is therefore all the more astonishing that the Federal Republic has chosen a decidedly national approach to the turning point.

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One has to distinguish between fears and facts here: populist forces in other member states (and unfortunately some commentators too) were quick to present the special fund as evidence of a dangerous rearmament. Cooler heads, on the other hand, were more concerned because there was hardly any talk of strong European commitments in most political discussions.

In the foreign policy discourse, Germany often emphasizes the need for European unity abroad, especially with reference to Moscow and the eastern neighborhood. This requirement is missing in defense policy.

The main focus is on the long-term convergence between the military forces of the EU and on research and development projects of PESCO. But stating that “parochial thinking” in increasing military spending weakens Europe’s real potential is not enough.

The restriction to German suppliers is inefficient

Smaller member states are already having difficulties arranging appointments with German armaments companies at all. Companies prefer rich buyers – especially when the credit-safest economy in Europe makes 100 billion euros available. The selective mediation of the federal government in these cases is a palliative solution that is institutionally hardly sustainable.

Another lawsuit among allies is the restriction of EU procurement law for the acquisition of weapon systems and key technologies. The requirement to advertise contracts throughout Europe has long been cited as a reason for the Bundeswehr’s inadequate procurement system.

Because of the miserable condition of the Bundeswehr, the demand for simple bureaucratic processes is understandable. The Bundeswehr has always had concerns about using industries in other EU countries. This significantly slows down the procurement of spare parts.

But the life expectancy of weapon systems is extremely long: if the Bundeswehr today limits itself to German or Germany-based companies as suppliers, this will be felt in the next 15 years, if not even longer. The risk of this national approach is permanent fragmentation of demand in the European defense market. There is also no way to make defense spending more efficient through interoperability and common logistic systems.

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It certainly plays a bigger role that the Federal Republic has had a rather suboptimal experience in bilateral cooperation with France. Behind closed doors, German politicians regret the decision of the then grand coalition to make defense projects the litmus test of the Franco-German partnership. Differing political attitudes towards export policy, unequal industrial and military priorities, and the overpriced price tag of the FCAS project have led Germany to view large joint projects with skepticism.

It even falters in the development of a new main battle tank, a comparatively simple project. The federal government has learned lessons from this: Both the new missile defense system and the Tornado successor are American and were negotiated bilaterally.

And yet: the fact that difficulties have arisen with a partner does not mean that efficient, rapid and cooperative European solutions are impossible. This applies both to the procurement of existing systems and to the development of new capacities. Many EU countries emphasize the need for close cooperation with the USA and American producers.

The structure of German industry with its many medium-sized companies also makes it easier to integrate German producers into pan-European value chains. This is also an advantage with a view to industrial consolidation and the merger of European armaments companies.

The European allies expect Germany to open up to joint defense projects

Germany should therefore campaign for the implementation of the EU Commission’s latest proposal on defense policy. The package introduces several measures for procurement of weapons systems at EU level. Two things are particularly noteworthy: the establishment of a task force to coordinate arms procurement and the setting up of multinational consortia (so-called EDCCs) to jointly purchase new weapons systems.

The proposal is not without weaknesses. But it can help to complement the German turning point at the European level. Increasing military spending only makes sense if it is part of a common defense policy.

The European allies want Germany to open up to European projects, for German medium-sized companies to participate more in conferences in Brussels and for them to take an active part in the European discourse in the defense sector.

Finally, Germany could help to clarify two fundamental questions of the coming defense union: non-European arms exports and the role of the EU Parliament in reviewing and co-determining joint projects. The former can be partly solved by a clever industrial policy: the creation of a real European defense market would reduce the need of the industry for large sales markets abroad. The latter needs a lengthy, difficult and demanding debate on a future change of the EU treaties.

This is going to be tricky. However, it is in Germany’s and Europe’s interest to make this effort.

More: Rheinmetall tank brings new trouble – the arms projects of Germany and France wobble

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