COLOGNE, Germany — Germany may be unable to deliver on its pledge to increase the defense budget due to smaller-than-expected economic growth, according to a new Finance Ministry analysis.
The projections peg the military budget to be several billion euros short of the trajectory to meet the government’s goal of reaching 1.5 percent of gross domestic product by 2024. Analysts even see the current spending curve unable to sustain 1.35 percent in the years ahead.
NATO members in 2014 agreed to boost their defense spending to 2 percent of GDP within 10 years.
Germany’s defense budget is roughly €43 billion (U.S. $49 billion) for 2019, or about 1.2 percent of GDP. That is a boost of €4 billion over the previous year.
Defence Minister Ursula von der Leyen on Monday said Germany remains committed to hitting the self-declared 1.5 percent target in 2024. She portrayed the Finance Ministry’s analysis as a mere first step toward a budget proposal negotiated by Cabinet secretaries. The government is expected to unveil such a plan in late March.
The Trump administration has often criticized Germany for underspending on defense, arguing Berlin rides on American coattails when it comes to security. News that the country’s spending target is at risk is sure to embolden the narrative in Washington that Europe is somehow taking advantage of the United States. It could weaken the negotiating position of German government delegates at two high-profile events in mid-February: a meeting of NATO defense ministers in Brussels, and the Munich Security Conference.
The Finance Ministry’s economic outlook estimates that agencies will have to reconcile new spending priorities within their previously established budget targets. That means no fresh money would become available for the government’s push on artificial intelligence, for example, according to the document.
Sebastian Sprenger is associate editor for Europe at Defense News, reporting on the state of the defense market in the region, and on U.S.-Europe cooperation and multi-national investments in defense and global security. Previously he served as managing editor for Defense News.