German government increases defense by $108 billion for vote

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WASHINGTON — German government and opposition party leaders are pressuring their members to approve a constitutional change that would guarantee a 100 billion euro (US$108 billion) defense fund announced by Chancellor Olaf Scholz in late February, days after Russia invaded Ukraine.

The fund, which is intended to plug holes in equipment and ammunition, will be key to putting Germany on track to the NATO-agreed target of spending 2% of its gross domestic product on defence. If approved by the Bundestag, Germany’s parliament, the money will add to annual military budgets frozen at just over 50 billion euros a year for the next few years.

The extra spending comes up against Germany’s restrictive policies on new debt, meaning a two-thirds majority is needed for an exception. All parties involved – the ruling coalition of Social Democrats, Free Democrats and Greens, as well as the opposition Christian Democrats – agreed on the details over the weekend, which which means that the adoption of the proposal is considered probable.

Government officials want to see the legislative changes enacted before the start of the summer holidays in early July. At the same time, they build acquisition wish lists, prioritizing how to spend the extra money and, most importantly, when.

In a letter on Monday, three prominent Social Democrats – Scholz, Defense Minister Christine Lambrecht and Bundestag party chairman Rolf Mützenich – asked their members to support them when the legislative changes are passed.

Russia’s war against Ukraine, they argued, marks a significant shift in Europe’s security architecture. “It showed us: to live in freedom requires military force to protect and defend it,” they wrote.

Exactly how the government should spend the money has been debated in Germany for months. The speed of spending is of particular concern, as the Ministry of Defense is not equipped to translate a sudden increase of, say, €25 billion above the regular defense budget to a total of €75 billion. euros per year in additional capacity. This calculation assumes spending the new fund evenly over four years while reaching the NATO percentage each year, given the current economic outlook.

The party-wide compromise leaves some leeway to achieve the alliance rate, according to the letter from the Social Democrats, obtained by Defense News. The plan is to achieve an “average” spending rate of 2% of measured GDP over a five-year period, with investments specifically tied to German NATO bonds.

The army’s ammunition resupply alone will gobble up 20 billion euros, according to the missive.

Negotiators for the parties haggled over the details of the award as well as when the relevant acquisitions should begin. Ultimately, the compromise proposal prescribes that capability gaps should be filled by investing in “significant” and multi-year 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 quickly, maybe even still This year. Berlin wants to buy 35 F-35 planes for the country’s nuclear sharing mission. Also on the table is a new heavy-lift helicopter program, for which US manufacturers Boeing and Lockheed Martin have submitted bids.

The German government is also expected to use the money to reinvigorate the European Union’s joint military development push that is in danger of collapsing as the rift widens within the bloc over the endgame in Ukraine, it said. argues Mölling. “How do we turn this into something good for Europe? he asked, referring to Germany’s increased spending prowess.

Eastern EU member countries are turning away from Germany and France, the duo once supposed to guide the bloc’s defense policies, angered by the two countries’ arms delivery policies to the EU. ‘Ukraine. Russia’s closest European neighbors consider the pace too slow and the focus on talks with Russian President Vladimir Putin misplaced.

Sebastian Sprenger is Europe Editor for Defense News, reporting on the state of the defense market in the region, as well as US-European cooperation and multinational investments in defense and global security. He previously served as editor of Defense News.

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