Berlin/Washington Christian Lindner (FDP), as a reserve officer and major in the Air Force, had one message that was particularly important when presenting the budget: Germany will finally meet the two percent target for defense spending next year, said the Federal Finance Minister.
In view of the NATO summit that started on Tuesday, that sounds like good news – after all, the alliance in Vilnius has strengthened the two percent target. The final declaration speaks of a “permanent commitment”.
But there are now serious doubts as to whether Germany will really succeed in achieving the goal. “I don’t expect that we will reach the two percent target even once before 2025,” says a budget politician from the traffic light groups, who does not want to be named.
Scientists are also skeptical: Military experts from the German Society for Foreign Relations, for example, titled a paper on the defense budget “Time warp instead of turning the tide”. The Ifo Institute also casts doubt on the proclaimed goal in a new study.
At the NATO summit in Vilnius, US pressure on the allies to present new forces will increase, says Douglas Lute, American ambassador to NATO under ex-President Barack Obama.
The Russian war of aggression caused German politicians to rethink defense spending.
(Photo: AP)
Kay Bailey Hutchison, American ambassador to NATO under former US President Donald Trump, said that Chancellor Olaf Scholz (SPD) made a very strong turn after the Russian invasion, “and I am full of praise for it”. “But fundamentally, Germany is moving too slowly to live up to its responsibilities and fulfill its obligations.”
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Lute demands that Germany must disclose what the higher defense spending is intended for. Now that the war in Ukraine will be on for almost 18 months, “we should actually have more clarity”.
As early as 2014, NATO countries pledged to spend two percent of their gross domestic product (GDP) on defense in the future. But although Germany also agreed to the decision at the time, the grand coalition never adhered to the requirement. In the SPD in particular, there were doubts as to whether this brand made sense.
The two percent target is now considered the minimum in NATO
That only changed after Russia invaded Ukraine. Now, of all people, an SPD chancellor promised to meet the two percent target. Scholz wants to achieve this with the 100 billion euro special fund for the Bundeswehr.
In the meantime, the brand is even more of a minimum requirement. Lute demands that the Vilnius final declaration must make it clear “that two percent should be the lower limit for defense spending”. That’s exactly how NATO Secretary General Jens Stoltenberg sees it.
Due to the new threat, Defense Minister Boris Pistorius (SPD) seemed to be in a good negotiating position in the budget negotiations. But although he was the only head of department who did not have to save thanks to the special fund, according to defense politicians he tended to emerge as a loser.
It was always clear that Pistorius would not get the additional ten billion euros he was asking for next year. In the end, he received 1.7 billion euros, just as much more than the wage agreement in the public sector cost him for staff.
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First, Pistorius should use up the Bundeswehr special fund, according to Lindner and Scholz. But this is where the problem begins. Of the 100 billion euros, only 1.1 billion euros have been paid out. And it will remain so for the time being.
At the end of April, 32 billion euros were contractually bound. By the end of the year it should be two-thirds, and then the full amount in the first quarter of 2024.
It is planned to procure 35 F-35 fighter jets worth 8.3 billion euros, 60 CH-47 Chinook heavy transport helicopters worth seven billion euros and 50 Puma infantry fighting vehicles for 1.1 billion euros. In addition, further purchases are fixed.
Germany is planning numerous military purchases.
(Photo: dpa)
In the next year, 19 billion euros are to flow out of the special fund. Together with the slightly increased defense budget of 51.8 billion euros, the two percent target will be achieved, Lindner calculates.
Population in Germany supports higher defense spending
But budget politicians have doubts about this calculation. The large armament projects from the special fund will only be completed after 2025, such as the F-35. And only then does this money flow out. “One gets the impression that we are announcing the turning point, but then backtracking,” says a traffic light housekeeper.
The draft of the new federal budget only says vaguely that the federal government will “provide two percent of GDP for defense spending from 2024”. However, providing is not the same as draining.
There is meanwhile consensus on higher defense spending: in a Yougov survey, 45 percent of those surveyed believe the two percent mark is correct. 21 percent even want higher defense spending.
They will probably also be necessary. As a result, the special fund cannot be used to purchase as much new equipment as hoped. The government has to plan higher interest rates because of inflation. As a result, the special fund will shrink from 100 to 87 billion euros. In addition, a number of projects are becoming more expensive than expected. For example, three ordered spy ships will cost at least 3.2 billion euros instead of two.
A large part of the special fund offsets savings in the defense budget
According to calculations by the Ifo Institute, only just under half of the special assets can be used to buy additional equipment.
33 percent of the special fund offsets savings in the regular defense budget, eight percent is spent on interest. Ifo military expert Marcel Hauler criticizes: “The use of the special fund thus misses the formulated goals.”
In order to permanently spend two percent of economic output, the defense budget would have to increase now. For Ifo researcher Florian Dorn, that would be “a real turning point that would also be secured with money”. However, the opposite is currently happening.
After inflation, the defense budget has been falling since 2022. In 2023, Germany will miss the two percent target by a double-digit billion amount and is one of the NATO member states with the largest deficit.
At the same time, investments in the special fund will be postponed. While the defense budget even in 2022 earmarked ten billion euros for new equipment, in 2024 it will be less than three billion. This means that the gap in the regular household is getting bigger and bigger.
“The current budget plans sow doubts as to whether Germany really wants to meet the two percent target in the long term. This makes it difficult for the armed forces and the armaments industry to plan,” says Ifo researcher Traktor. In the long term, the conclusion of his study was that the achievement of NATO’s target mark was in jeopardy.
More: Only eight countries meet the two percent target