WASHINGTON — German government and opposition party leaders are lobbying their members to approve a constitutional change that would secure a €100 billion (U.S. $108 billion) defense fund announced by Chancellor Olaf Scholz in late February, days after Russia’s invasion of Ukraine.
The fund, which is meant to plug holes in equipment and ammunition, will be key to setting Germany on course for the NATO-agreed goal of spending 2% of gross domestic product on defense. If approved by the Bundestag, Germany’s parliament, the money will go on top of annual military budgets frozen at slightly more than €50 billion annually for the next several years.
The extra spending clashes with Germany’s restrictive policies on new debt, which means a two-thirds majority is needed for an exception. All relevant parties — the governing coalition of Social Democrats, Free Democrats and Greens, plus the opposition Christian Democrats — agreed on details over the weekend, which means the proposal’s passage is considered likely.
Government officials want to see the legislative changes enacted before the summer recess begins in early July. In parallel, they are crafting acquisition wish lists prioritizing how to spend the extra money and, crucially, when.
In a letter on Monday, three prominent Social Democrats — Scholz, Defence Minister Christine Lambrecht and Bundestag party chairman Rolf Mützenich — asked their members for support when the legislative changes come up for a vote.
Russia’s war on Ukraine, they argued, marks a significant shift in Europe’s security architecture. “It has shown us: Living in freedom requires military strength to protect and defend it,” they wrote.
Exactly how the government should spend the money has been a source of debate in Germany for months. The spending velocity is of particular concern, as the Defence Ministry is unequipped to translate a sudden uptick of, for example, €25 billion above the regular defense budget for a total of €75 billion per year into added capabilities. That calculation assumes spending the new fund equally over four years while reaching the NATO percentage every year, given the current economic outlook.
The partywide compromise carves out some leeway in reaching the alliance rate, according to the Social Democrats’ letter, obtained by Defense News. The plan is to reach an “average” spend rate of 2% of GDP measured over a period of five years, with investments specifically linked to German obligations within NATO.
Restocking the military’s ammunition alone will swallow €20 billion, according to the missive.
Party negotiators have haggled over allocation details as well as when relevant acquisitions should commence. In the end, the compromise proposal prescribes that capability gaps should be plugged with investments in “significant” and multiyear acquisition programs starting in 2022, according to the letter.
Christian Mölling, research director at the Berlin-based German Council on Foreign Relations, said Foreign Military Sales deals with the United States could offer a way to get money out of the door fast, perhaps even still this year. Berlin wants to buy 35 F-35 aircraft for the country’s nuclear-sharing mission. Also on the table is a new heavy transport helicopter program, for which U.S. manufacturers Boeing and Lockheed Martin submitted offers.
The German government also should use the money to re-energize the European Union’s joint military development push that is at risk of collapsing as the gap widens within the bloc over the endgame in Ukraine, Mölling argued. “How do you turn this into something good for Europe?” he asked, referring to Germany’s boosted spending prowess.
Eastern EU member nations are turning away from Germany and France, the duo once meant to shepherd the bloc’s defense policies, in anger over those two countries’ weapons-delivery policies for Ukraine. Russia’s closer European neighbors consider the tempo too slow and the emphasis on talks with Russian President Vladimir Putin as misplaced.
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. He is based in Cologne, Germany.