For Olaf Scholz, it’s about filling the turning point announced on February 27 with action. But shortly before the final negotiations, there is another dispute. On Sunday, when the Finance Ministry was supposed to be talking to the Union again about the 100 billion special fund, the representatives of the CDU and CSU could read in the newspaper that SPD leader Saskia Esken was questioning one of their most important points.
“We will not reach the two percent target equally every year,” said Esken of the “Frankfurter Allgemeine Sonntagszeitung”. The reason she gave was that armaments will not be procured in the same way every year, so there are fluctuations depending on demand and the market situation, which is why a fixed two percent target makes little sense.
The core of the dispute: Because the special fund is to be linked to an amendment to the Basic Law, the traffic light for the necessary two-thirds majority depends on the votes of the CDU/CSU.
In his government statement three days after the Russian attack on Ukraine, Scholz said the following sentence: “The federal budget for 2022 will provide this special fund with a one-off amount of 100 billion euros. We will use the funds for necessary investments and armament projects. From now on, we will invest more than two percent of gross domestic product (GDP) in our defense every year.”
The Union sees this as a 100 billion euro special fund plus more than two percent of the gross domestic product for defense every year. The NATO members had promised each other this, but to the annoyance of many allies, Germany had missed the target for years – and had made no great effort to change this before Russia launched a war of aggression against Ukraine.
Defense Minister Christine Lambrecht (SPD) has already increased the budget for the current year by more than seven percent to 50.3 billion euros. But depending on economic development, almost 20 billion are still missing to reach the two percent target. If the special fund does not come on top, but is included in the calculation, if the 100 billion can be used up in five years, then the special fund would only be a flash in the pan from the Union’s point of view.
What is to be bought: Among other things, new F-35 fighter jets, new tanks and other heavy, state-of-the-art weapons and drones are to be procured, as well as the Pegasus system for air reconnaissance, comprehensive air defense and ammunition worth several billion euros.
The increased defense budget should also enable soldiers to be fully equipped with all sets of clothing. Another major topic is digitization and protection against cyber attacks. SPD leader Esken warns against overly rigid spending targets. “If you order large equipment today, you won’t get it for three or four years.
That means the sums may not be that high in the first two years, and then there comes a year in which a great deal becomes necessary.” But beyond all money issues, the crucial reform remains that the procurement system of the Bundeswehr is modernized to such an extent that it doesn’t Years are lost or material is obtained that does not help or is to be developed first.
The Baerbock formula: Until recently, one point of contention was whether the new money would be intended exclusively for the Bundeswehr and whether the two-percent target for armaments spending should apply permanently – and whether this should be enshrined in law. In his “Zeitenwende” speech on February 27 in the Bundestag, Scholz spoke exclusively of the financing of the Bundeswehr.
In tough negotiations, however, Foreign Minister Annalena Baerbock (Greens) managed to ensure that the cabinet decision to set up the special fund did not specifically name the Bundeswehr as a beneficiary, but instead spoke of strengthening alliance and defense capabilities.
This success was important to the Greens because they also want to use the special fund to invest in cyber security, which they had promised in the election program.
They also want to invest more in diplomacy and development cooperation – knowing that less will be available from other pots in the future. Because Finance Minister Lindner wants to comply with the debt brake again from 2023 – which makes it so difficult for him, for reasons of economy alone, to guarantee the Union’s demand for 100 billion plus two percent of GDP every year for the defense budget.
The Greens’ position and the Baerbock formula are also shared by parts of the SPD, including parliamentary group leader Rolf Mützenich. In the negotiations on the Bundestag’s motion for a resolution on the delivery of heavy weapons, the price of the Union’s approval was that instead of the Baerbock formula the equipment of the Bundeswehr was mentioned again, which they also demanded for the negotiation on the amendment to the Basic Law.
Dissent in the traffic light: The chairwoman of the defense committee, Marie-Agnes Strack-Zimmermann (FDP), warns the SPD and the Greens against softening the two percent target. “The FDP will not discuss that either.” The Liberals are also pushing for speed so that the purchases can be pushed quickly. “The special fund must be in the Basic Law before the summer break, because otherwise we will lose a lot of time,” says the defense policy spokesman for the FDP parliamentary group, Alexander Müller.
“The necessary ships, vehicles and protective vests are not in the shop window, but have to be produced again.” Before the industry hires staff and orders materials and preliminary products, they want to be sure that the funds are also legally secured. “That’s why the Union can no longer block here.”
Who is negotiating: Federal Finance Minister Christian Lindner (FDP), Foreign Minister Annalena Baerbock (Greens), Defense Minister Christine Lambrecht (SPD) and other representatives of the Ministry of Finance had agreed to meet with politicians from the Union faction on Sunday evening in the presence of Bundeswehr Inspector General Eberhard Zorn.
Scholz would like to have an agreement by Wednesday, when he will speak as part of the general debate in the Bundestag – then the vote on the special fund could take place in the Bundestag by Friday. However, Scholz and Lindner have to fear that concessions to the Union could drive their own MPs to abstain.
This is significant in that Union parliamentary group leader Friedrich Merz (CDU) has repeatedly threatened that his Union of Traffic Lights will only give as many votes for the amendment to the Basic Law as the SPD, the Greens and the Liberals lack for the constitution-amending two-thirds majority. Any of their own dissenters could thus cause the central chancellor project to fail.