The Bundeswehr’s Special Fund: A Political Catch-22?
(Source: special to; posted May 04, 2022)

By Alistair Davidson
Initial debates both in the Bundestag and the Bundesrat have shown that not only are the very purposes of the Special Fund questioned, but the very conditions of its implementation as well.

Defence or Security?

The CDU/CSU is fully aligned with the Chief of the Staff of the Bundeswehr: the Sondervermögen has been specially designed for the Bundeswehr and not for the increase of wages or broader security issues (cyber-security, civil protection, search& rescue…). Portions – hard to evaluate – of the Greens and the SPD (not to speak of die Linke sitting with the opposition) stand against the narrow vision of defence. Will they vote against?

This is the issue on which the Union has adopted a smart approach by giving its support limited to the minimum level (i.e., 75 MPs) to allow the Bill to pass. If any member of the Coalition votes against the project, the Bill will not pass.

The Union also compels the majority to a strict discipline which could be problematic: the left wing of the SPD, led by the influential Mr. Rolf Mützenig, continues to question the arbitrariness of the goals of the Special Fund.

2% with or without the Funds?

Another stumbling block is the respect of the 2% of the German GDP for Defence. In the famous speech of Mr. Scholz delivered before the Bundestag on the 27th of February, the Chancellor said (official version): “The 2022 federal budget will provide a one-off sum of 100 billion euro for the fund. We will use this money for necessary investments and armament projects. We will now – year after year – invest more than two percent of our gross domestic product in our defence.”

“More” for the Union means the Special Fund of €100Bn+2% of the GDP for the annual Defence budget. But for the F.D.P and the SPD, “more” means that the Special Fund will feed the annual Defence Budget (€50.3Bn for FY22) to reach at last the 2% per year by the end of the current legislature: €25Bn per year will be more that the 2% of the GDP (i.e, €70Bn).

The Union has acknowledged that it cannot force the Coalition to add the Special Fund and an extra defence budget of 2% of GDP, and stands firmly on the objective of a sustainable and persistent increase of the Defence Budget beyond 2027. Paradoxically, the Union has also been very clear that it wants a plan to clear the debts contracted for the Special Fund…

A Special Fund for what?

The CDU and the CSU have plaid on velvet by insisting that the capability plan behind the Special Fund is still unknown and, therefore, its absence reflects the lack of a strategic vision of the future Bundeswehr.

This opinion is widely shared in defence circles: so far, the sole goal of the Government is to replace the old equipment by a new one, without any thought of a leap forward in capability. Given the European context, this lack of vision is viewed a very short-sighted doctrine stuck to the sole replacement of items...

This state of mind is being reflected by the future list of purchases; it includes in fact three categories of the equipment:

a) fast and reliable (off-the-shelf) purchases;
b) the transatlantic anchorage;
c) the consolidation the German & European defence industry.

Three goals will hardly help square the circle: the heavy budgetary weighting of purchases from the United States (F-35, P-8, CH-47, Patriot upgrade) will leave German and European industry with less money for new developments which are more interesting.

In the Special Fund, an important part will be spent on ammunition (€20Bn at least), personal equipment for soldiers (€2.3Bn, already voted) and already ordered programs (PUMA, K-130).

Few euros will be spent on fully new projects: the ECR-version of the EF-2000 and the U-212 C/D submarine will be top-priorities because they are fully German and will help to sustain jobs in the North and South of Germany…

In this context, the absence of a clear strategic thinking – work on a national security strategy has only just begun, for completion in 2023 – risks to lead to acquisition decisions dictated maybe by public nervousness, but surely by the lobbying of German and non-European industries, or even both, as shown by the Arrow 3 project, now being discussed within the Government and the Bundestag.

Finally, the existence of a new financial Eldorado does not in itself solve all the problems of the Bundeswehr: the procurement system is badly managed, exposed to corruption and impossible to reform. Year after year, the so-called “Rüstungsbericht” (procurement report) shows how delays, cost-overruns and under-performance have eaten most of the defence budget.

The result of this persistent incompetence has been given by the Chief of the German Army, General Alfons Mais on LinkedIn the 24th of February: “In my 41th year of peace-time service, I would not have thought that I would have to experience a war. And the Bundeswehr, the army which I have the honour to command, is standing there more or less empty-handed. The options we can offer the government in support of the alliance are extremely limited.”


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