According to a study, the federal government cannot keep the promise made by Chancellor Olaf Scholz (SPD) to achieve NATO’s two percent spending target for defense in the future, despite having a special fund. The German Economic Institute (IW) expects a “gap of just under 18 billion euros” in the defense budget for 2023. In addition, the study refers to deficits in armaments production.
Despite the special fund of 100 billion euros for the Bundeswehr, the goal of spending two percent of annual economic output on defense cannot be achieved this year and next, according to the analysis, which was first reported by the “Rheinische Post”. . For example, no significant increase in defense spending is planned in the budget for 2022, nor is there any expenditure from the special fund. An outflow of just 8.5 billion euros from the special fund is planned for 2023.
In the following years up to 2026, the two percent target will only almost be reached, but not exceeded. From 2027, the corresponding financing is completely unclear. If the special fund is used up by then and the defense budget is not increased, there will be “a gap of around 35 billion euros” per year, they say. The country is heading towards a “break-off edge” here.
According to the IW study, “by 2026 at the latest” a “regular defense budget increased by a good 60 percent” must be made available “by 2026 at the latest” in order to meet the two percent target. Without a “consolidation” of spending, the defense industry “could not adjust to future requirements”.
The IW examines the general conditions of the “turning point” that Scholz spoke of after the Russian attack on Ukraine. In order to strengthen defense capability, “the possibilities for industry to supply new weapon systems and the possibilities for the Bundeswehr to use and maintain these weapons must also be reconciled,” emphasize the experts. Stronger European cooperation is also necessary.
In 2020, around 55,500 employees in the defense industry in Germany produced weapons, combat aircraft, warships and military vehicles for around 11.3 billion euros. According to the information, both values ​​were lower than in 2015, despite the fact that Russia had already occupied Crimea.
This is astonishing insofar as defense spending has risen again somewhat in recent years after hitting a low in 2015 and 2016. According to the study, the reason is that in 2021, for example, more than 41 percent of the available money was spent on personnel expenses and pension claims. Only 18.5 percent of the budget flowed into new weapons and vehicles.
The study takes a critical look at defense policy as a whole since the end of the Cold War, and there is talk of a German “Sonderweg”. Although other important NATO states such as Great Britain or France initially reduced their military expenditures from 1990, this trend was reversed after the turn of the millennium, unlike Germany.
