The Russian assault on Ukraine has dramatically modified the course of German defence policy. The coalition contract and partners initially agreed on a moderate defence policy, that the Bundeswehr should be better equipped, but none of the coalition members risked releasing actual figures.
Before the war in Ukraine, the Federal Government was at a dead end on defence budget, a perspective which provoked a tense situation in the various departments involved in preparing the March 9 budgetary conference. Like other ministries, the MoD sent in its requests, comprising not only the programs already approved in June, but not yet funded, as well as new requests such as the planned acquisition of the Lightning fighter and the EW version of the Eurofighter.
All these requests have been denied by the Budget secretary (the other ministries were treated in the same brutal way), leaving the MoD with a massive €38Bn hole in its forward financial planning (see graph above)
With such a deficit in its planned requirements, the MoD was not able to finance the €24.8 billion package voted by the Bundestag on the 23rd of June, even without considering an acquisition of new combat aircraft like the F-35A or the development of the SEAD version of the Eurofighter.
Without a massive increase, the MoD would be forced to postpone the launch of some projects such as the FCAS/New-Generation Fighter, the MGCS future tank, and delay some orders such as the PUMA combat vehicles, the P-8 Poseidon maritime patrol aircraft, the F-126 frigates or the U-212 C/D submarines.
Against the background of growing inter-ministerial tensions and the massive deficit in the financial needs, Defence Minister Christine Lambrecht (SPD) said at the Munich Security Conference that Germany, as a reliable partner, would invest more money in the military.
"We will also continuously increase this defence spending," she said in a panel discussion on the future of EU security and foreign policy. With the new three percent target of the co-called “traffic light coalition,” spending on defence and development cooperation would be viewed in a networked approach.
Apart from her public statement, the Free Democratic Party (FDP) has also voiced its concerns about the defence budget. Mr. Lindner, the minister of finance, and Mrs Strack-Zimmermann, Chairman of the Defence Committee, have both supported the idea of increasing the defence budget.
The war in Ukraine has reshuffled all the cards. Chancellor Scholz’s announcements on February 27 have dramatically altered the course of German defence policy, not only because it has broken the previously strict rule of not exporting weapons to war zones, but also because it sets the line for a steady increase of the defence budget. The analysis of Chancellor Scholz's announcements call for three main observations:
1. 2% of GDP for Defence: now…
The promises made by Chancellor Scholz in his February 27 speech, if enacted, should bring about a new Revolution in Military Affairs in Germany.
First, because money, which was so scarce during these last three decades, should flow with the setting-up of special fund (“Sondervermögen”) for the equipment in the Bundeswher. The FY-2022 budget establishes it at the level of €100 billion, used to finance the necessary investments and equipment projects.
Secondly, the share of Defence in GDP will be set at 2% annually, which sets the defence budget at a level of around €80 billion per year...
2….and for ever?
The key passage in Scholz’s speech is the proposal, made to the Bundestag, to integrate this special fund in the Fundamental Law, that is to say to make it permanent, with the Chancellor specifying that this decision is taken above all for the security of Germany.
3 The Chancellor then went into certain details, some of which are mere confirmations:
First, the common projects with France, the MGCS & the SCAF are given “top priority”, he said: “That is why it is so important to me, for example, that we build the next generation of combat aircraft and tanks with European partners – and in particular with France – here in Europe. These projects are our top priority.”
But the problems behind these two major projects are not only budgetary, but essentially industrial and political: good will and a flow of money will not be enough to see them through to their implementation.
Secondly, while the New-Generation Fighter will be developed, the EF-2000 will undergo new enhancements (Standard 4 and SEAD version certainly).
Thirdly, the weaponization of the Israeli Heron TP, leased from Israel Aerospace Industries, will be armed sooner than planned; this decision will however have to wait for the establishment and enactment of new rules of engagement to make future air strikes legal and ethical.
Finally, the nuclear mission of NATO will be pursued by acquiring in due course an electronic warfare version of the EF-2000 and the F-35A, both decisions largely awaited by experts.
A budget increase is not a revolution…
However, the large flow of money, which should be steadily channelled into the defence ministry will not fix all the problems facing the Bundeswehr: as the yearly reports on equipment mention it, most of the problems of the German armed forces come from their very procedures of procurement: an unclear doctrine leads to uncertain specifications, which in their turn, lead to confusion, delays and under-performance. Money will not remove all the obstacles; paradoxically, it could even worsen them, and lead to a tremendous waste without leading to any new military capability.
Besides, the new course will for quite a long time being used to fill the large gaps in the defence equipment: the €38Bn budget hole will take time to be filled in, and will not immediately solve the most frequent problems of spare parts, support systems and training.
Finally, money will not be a game-changer: only a new doctrine could provoke a true and in-depth revolution in German military affairs, a doctrine based on the new international role that Germany wants to assume, not only in central Europe but also in Africa and in Asia.
So far, the coalition does not look ready for this great leap forward.