By Alexander Luck*
(FPRI) — For decades, Germany pursued close economic and political ties with Russia. It did so because German political and strategic leaders thought consistent engagement would result in geopolitical stability for Europe. They also thought it would lead to the eventual transformation of Russia itself, following the paradigm of “Wandel durch Handel” (“change through trade”).
After Russia’s invasion of Ukraine in February 2022, Berlin’s approach lies in ruins.
In response to the new European security situation, Chancellor Olaf Scholz has promised a “Zeitenwende” (German for “turning point”). After resisting calls to increase the country’s defense spending for years, Scholz finally decided to allocate enough funds to meet minimum operational requirements for the German armed forces. In early June, the German parliament passed the equivalent of two annual defense budgets — a sum total of 100 billion euros (roughly $105 billion) — to rebuild and modernize the German military. The approval fulfilled Scholz’s pledge to address Germany’s atrophied military, as part of a broader policy shift to account for Russian aggression in Europe.
However, given Germany’s under-investment in its military in recent years, the 100 billion euros are only the minimum needed to equip the German armed forces. As a result, this allocation will not support the badly needed expansion of the armed forces, but may instead just address a limited number of long-festering issues that have negatively impacted the force.
The End of an Era
After the Russian invasion of Ukraine in February, Scholz shelved the Nordstream 2 gas pipeline project. Germany also pledged to support NATO partners in the East, many of which had lost confidence in its willingness to come to their defense. In addition, the chancellor pledged to spend at least 2 percent of the German gross domestic product on the defense budget per year. This would meet the pledge on spending obligations agreed to at the NATO Wales summit in 2014.
At first glance, these changes in German policy seem profound. For years, NATO allies (especially Poland and the Baltic countries) criticized Germany’s position on the pipeline with Russia. From their perspective, it undermined mutual security by creating a direct energy supply relationship between Russia and Germany, bypassing Berlin’s eastern partners. Likewise, the commitment to higher defense spending could reaffirm German support of NATO and serve to reinforce military deterrence against Russia in Eastern Europe.
However, upon closer examination, many questions remain unanswered. What will the new defense spending pay for? How long will the funding last? Is the appropriation truly indicative of a sustained change in the German military posture?
What Will Germany Buy?
The 100 billion euro figure reflects longstanding political debates that have raged in the Bundeswehr (the German military) and the ministries of finance and defense. For years, the Bundeswehr faced budgetary challenges and procurement issues, and in October 2021 revealed that 102 billion euros were needed to address only the most important of these systemic shortcomings. The figure to address the full scale of modernization needed would likely be well over double that amount. This was confirmed when the list of programs to be funded via the special budget emerged in May and then explained further in point-by-point clarification in the June budget proposal.
The first decision taken after Scholz’s announcement in February concerned the so-called “Vollausstattung” of Bundeswehr troops with clothing and protective gear by 2025, worth 2.4 billion euros. This purchase suggests that several German administrations had failed to adequately supply soldiers with basic equipment. The Bundeswehr had to collect equipment from across the force to properly equip units sent to NATO’s Very High Readiness Joint Task Force.
Germany’s Marineflieger (naval aviation) also faced serious budget cuts over the last few decades. It had to curtail anti-submarine training as a result, and the capabilities of the German P-3C maritime patrol planes deteriorated. The decision under the previous government to buy five P-8A satisfied the absolute minimum capability as defined by German naval aviation to fulfill maritime patrol and anti-submarine warfare responsibilities. However, five aircraft is not enough to address rising demand for both in several theaters where NATO and the European Union had increasing expectations for German capacity. The 100 billion euro allocation will fund the expansion of P-8A aircraft from the five to twelve. This expansion, while dramatic, is simply bringing the number aircraft up to meet the requirements for anti-submarine capability and to help meet NATO and EU commitments, as illustrated by Mediterranean maritime patrol deployments near Libya or anti-submarine exercises in the North Atlantic and Baltic Sea.
The budget allotment may also address a longstanding issue for Bundeswehr troops: the lack of secure communication equipment. This issue has festered for decades, with policymakers even going as far as to implement a bizarre decision in September 2021 to award contracts to manufacturers to rebuild radios from the ground up, recreating vintage parts in the process. This decision was needed so that the Bundeswehr could continue to use 1980s legacy equipment. The operational ramifications of these choices were severe. The Bundeswehr could not communicate with NATO allies that used more modern encrypted communications and the allies refused to radio German troops on open and unsecured channels. This led to bizarre situations both in the Baltic region and Mali, where troops literally had to pull up side by side shouting orders from their vehicles or patrols to communicate during combat operations and exercises. The special funding allocates no less than 20 billion euros to command and control equipment, including radio gear, satellite communications capabilities, and networking hardware to ensure Bundeswehr troops are finally in line with what is considered equipment standards elsewhere for many years already.
Germany will also use the new 100 billion Euro fund to buy F-35 fighter aircraft to replace a share of Luftwaffe’s aging Tornado strike fighters, specifically those tasked with the nuclear sharing role under an agreement with the United States. Scholz specifically mentioned the American stealth fighter in his speech in February and the government subsequently announced their selection of the F-35 as part of future purchases. This seemingly signaled a 180 degree turn for the Social Democratic Party (SPD), which for years had vocally opposed such an acquisition and nuclear sharing in general. Yet already last autumn, when the new government coalition assumed office, signals were sent by SPD leadership that a rapid decision on Tornado and the commitment to nuclear sharing would now be a priority. In January, Scholz, in discussion with new defense minister Christine Lambrecht (also SPD) revealed that the F-35 was again being considered. This contradicted the previous government’s decision, then endorsed by SPD, to dismiss the US fighter from the circle of candidates. As a result, Scholz in February had merely completed a protracted and bizarre decision-making process that most likely would have occurred with or without Russia’s aggression in Ukraine. Again, this reflects more the pressing need to replace expired Bundeswehr assets with the quickest available solution, and only to maintain longstanding commitments.
How Long Will the Funding Last?
There are already indications this budgetary resuscitation may not last. The special budget required additional debt, which can only be approved in exceptional circumstances. Further efforts have to deal with the so-called “Schuldenbremse” (or “debt brake”), a constitutionally enshrined obligation of any German government to limit new federal debt spending to 0.35 percent of gross domestic product. Substantial increases accounting for higher defense spending would violate this pledge unless savings are found in other federal budget items, such as social security or healthcare. Projections for the regular defense budget consequently show flat-lined spending in line with this commitment.
Only by adding the extra appropriations from the special budget can the promised target of 2 percent of gross domestic product spent on defense be met. However, once the full sum of 100 billion euros is spent, this top-up will disappear. While there is still some margin in how the one-time budget is allocated, one way or another it will run out by about 2025. By then, federal elections will be due once more. If a future administration then does not find the political will to dramatically raise the regular defense budget or pass yet another special fund, the Bundeswehr will be back at square one.
Zeitenwende is not a strategic change of direction for Germany. Instead, it represents how one German government finally felt compelled to address multiple longstanding military deficits. To be sure, it will improve the Bundeswehr as a functional service both in terms of maintaining competency of their core responsibilities and of interoperability with NATO and other partners. Yet these measures do not ensure a change in basic military posture. Berlin here stands in contrast to Poland, where the government has already announced or signed multiple large-scale procurements that will, if realized, see a dramatic expansion of military capability.
While fixing several longstanding deficits in basic defense tools required for the Bundeswehr to be a credible military force, the special budget threatens to cut short true reforms before they have been implemented. The time-limited nature of the funding puts big question marks on the chancellor’s claim that Zeitenwende marks a true turning point in German defense policy.
If Berlin was determined to signal a step change, it would have to address mid-term defense spending through the regular budget, far beyond the 100 billion euros committed as top-up for the next few years. The Bundeswehr would have to receive sustained funding for growing its starved land force. German industry would require significant government funding to allow scaled-up production, after decades of languishing on limited purchases by the Bundeswehr and relying on the export market just to keep its limited assembly capacity running.
That we have not seen any tangible declarations in those regards should ring alarm bells. It renders Scholz’s intention to provide a truly long-term perspective to Germany’s allies and partners hollow. Zeitenwende risks being not a turning point for German national security, but merely a flash in the pan.
The views expressed in this article are those of the author alone and do not necessarily reflect the position of the Foreign Policy Research Institute, a non-partisan organization that seeks to publish well-argued, policy-oriented articles on American foreign policy and national security priorities.
*About the author: Alexander Luck received his MA in Political Science from the University of Leipzig. He is an independent analyst focusing on the Bundeswehr and trans-Atlantic security.
Source: This article was published by FPRI