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Germany - Military Spending

In a speech delivered 07 November 2019 at the Bundeswehr University in Munich, German Defense Minister Annegret Kramp-Karrenbauer . pledged to boost defense spending to 2% of GDP, a NATO target, by 2031. While it would be well behind the 2024 goal, it could eventually make Germany the third largest defense spender in the world, behind the US and China. For now, Germany would try to reach 1.5% of GDP by 2024, she added.

In its yearly financial report on military capacity and engagement to NATO, in February 2019 Germany promised to increase expenditures to more than 1.5 percent of gross domestic product by 2024. That goal fails to satisfy the alliance's agreed spending benchmarks and could ultimately be politically tricky to implement at home in the wake of new financial forecasts. The plan, known as the "Strategic Level Report," envisions an 80 percent increase in defense spending between 2014 and 2024, or 27 billion ($31 billion) in absolute figures. That would bring Germany's total military expenditures to 60 billion by 2024.

The proposed 2019 defense budget was set at US$51.2 billion for defense, which was US$4.7 billion more than Berlin was slated to spend in 2018. The German military actively lobbied for increased funding amid pressure from Washington to increase NATO defense spending, even as the Federal Republic's military budget was already set to reach over $51 billion in 2019. Germanys parliamentary budget committee agreed 09 November 2018 to allocate billions of euros in additional funding to the Bundeswehr, after 15 hours of intense negotiations. The new budget, which was only agreed after several revisions and amendments were made, would see the Ministry of Defence allocated 43.2 billion [US$49.1 billion] to procure a fleet of new transport helicopters and ships.

Just over a third of the new military equipment delivered to the Bundeswehr by manufacturers in 2017 is fit for service, the German defense ministry has revealed in an October 2018. Of the 97 major pieces of equipment delivered to the armed forces last year, only 38 of them were combat ready, the report said. According to the report, of the 71 Puma infantry fighting vehicles delivered, 27 are combat ready. Of the eight new Airbus A400M Atlas military transports, half are fully operational. Just two of the seven Eurocopter Tiger combat helicopters and four of seven NH Industries' NH90 transport helicopters are combat ready. Furthermore, just one of the four Eurofighter Typhoon fighter jets delivered in 2017 is fit for service.

Berlin is looking to achieve an equipment readiness level of 70 percent, and is most concerned with the state of the Puma and A400M deliveries. Defense ministry parliamentary secretary of state Peter Tauber said the quality of the planes was "increasing," while urging the defense industry to "reach the agreed upon indicators as soon as possible."

Defense Minister Ursula von der Leyen on 20 June 2018 reaffirmed Germany's commitment to significantly increasing its defense budget. Germany had announced that it would increase its defense spending to 1.5 percent of GDP by 2024, but will fail to meet its NATO spending obligation of 2 percent of GDP. US Secretary of Defense Jim Mattis said "I think they are on the right track. We welcome the announcement that Germany wants to increase its defense spending by 80 percent by 2024".

German Chancellor Angela Merkel said on 15 June 2018 that Germany would not be able to meet its NATO spending obligation until well after 2024. German Defense Minister Ursula von der Leyen put in a request for an increase to the military budget of 12 billion ($14.6 billion) over the current term of parliament, an amount greatly in excess of present budget plans, a newspaper reported on 29 April 2018. The Bild am Sonntag said Finance Minister Olaf Scholz had so far foreseen an increase in defense spending of just 5.5 billion over the four years to 2021. The Defense Ministry had already criticized Scholz's plan on Friday as "inadequate in view of the huge accumulated needs and required modernization, particularly in the medium term."

According to the paper, von der Leyen will threaten to stop at least one international armaments project scheduled for 2019 if the defense budget is not given a considerable boost. The first to go would be a planned submarine deal with Norway, followed by the purchase of six C-130 Hercules transport aircraft, according to Bild.

Germany's defense budget in 2017 was around 37 billion and is expected to reach 39 billion in 2018. Although that represents the ninth-highest defense budget in the world, it still falls far short of the 2 percent of national GDP that NATO would like to see. Over the past few years, there has been growing criticism that the Bundeswehr is underequipped.

Donald Trump called for NATO members to increase their defense spending to 2 percent of their GDP by 2024. If Social Democratic chairman and candidate for chancellor Martin Schulz won power in Germany's national election in September 2017, Trump won't get anywhere near that much. "I'm not of the opinion that NATO has agreed to achieve this 2 percent goal in defense spending," Schulz told members of the foreign press in Berlin 10 April 2017. "Twenty billion euros ($21 billion) or more in additional defense expenditures would certainly not be a goal my government would pursue."

At their 2014 summit in Wales, NATO members set 2 percent as a "guideline." Trump's White House treats this as a commitment, but the SPD led by Schulz say it's no such thing. "If I interpret it correctly, all that was agreed was that we'd try to approach it," Schulz said. "It doesn't seem to me to be the highest priority to spend 20 billion euros more just to have a force armed to the teeth in the middle of Europe." Foreign Minister Sigmar Gabriel, a member of Schulz' party, has questioned how the target should be assessed, arguing it should include aid and development programs.

Social Democratic Party (SPD) leader Martin Schulz in an interview published 26 March 2017 by the German weekly "Bild am Sonntag" said he wanted to increase defense spending, saying Germany's armed forces, known as the Bundeswehr, needed more money and should receive it. "We owe it to our soldiers that they are optimally equipped," Schulz said in the interview. However, he stopped short of calling for a comprehensive overhaul of the armed forces, in contrast to Chancellor Angela Merkel, who has vowed to go forward with a significant increase in defense spending.

To completely equip the army, Germany needs to significantly increase its defense budget. NATO requires all its members to spend 2 percent of their GDP for military purposes, but Germany spent only 1.16 percent in 2015 and 1.15 percent in 2016.

The German armed forces are 30 percent underequipped and will need years to bring their lacking arsenals up to speed, Lt. General Bruno Kasdorf, Inspector of the German Army, warned in a radio interview on 22 June 2015. He praised the governments decision to ramp up the countrys defense budget. The Bundeswehr will need a lot of new arms and other military hardware in the coming decade, General Kasdorf told Deutschlandfunk radio, adding that the country had neither the money nor production capacities to quickly rectify the situation.

At 1.29 percent of output, by 2014 Germany's defense spending was well below NATO's 2 percent target. The military said in late 2014 that a large proportion of equipment such as helicopters and fighter jets is unfit for service, casting doubt on Germanys ability to help provide defence for its NATO allies. The military said only 70 of 180 Boxer armored fighting vehicles, seven of 43 navy helicopters, 42 of 109 Eurofighters and 38 of 89 Tornados were operational. Transall transport planes were also in poor condition, with only 24 out of 56 deployable. These are symptoms of Germany's push for fiscal austerity. Germany has pushed strict austerity measures in order to combat deficits and public debt.

By 2015 Germany planned to boost its defense budget by 6.2 percent over the next five years, aiming to increase defense spending to more than 35 billion by 2019 and comprehensively modernize the army. Between 2010-2014, Berlin had raised defense spending seven percent to 32.4 billion, while French defense spending fell 2.5 percent over the same period to 31.4 billion.

In 2011, Berlin decided to save money by providing only 70 percent of required equipment for some branches of the military, such as armored divisions.

Bundeswehr Mid-2014
Operational Capability of Select Weapons Systems

Weapons
System
Total
Number
Available Deployable
Tiger helicopter 31* 10 10
NH90 helicopter 33* 8 8
Sea King helicopter 21 15 3
Sea Lynx helicopter 22 18 4
CH53 helicopter 83 43 16
Eurofighter fighter jet 109 74 42
Tornado fighter jet 89 66 38
K130 corvette 5 2 2
U212 submarine 4 1 1
Frigates 11 8 7
Marder tank 406 280 280
Boxer tank 180 70 70
Total stock = all procured units
Available = in operation, including systems currently out of service because of maintenance or repair
Deployable = can be used immediately for missions, exercises or training

*includes pre-production models
Source: Bundeswehr German Armed Forces

On 07 July 2010 Germany's Cabinet approved a 2011 budget that foresaw a 3.8 percent cut to spending from 2010 and lower new borrowing, aimed at putting Europe's biggest economy on track to reduce its debt. The Defense Ministry was getting a 1.4 percent increase to euro31.5 billion [US$39.8 billion]. However, Defense Minister Karl-Theodor zu Guttenberg stressed the need to save euro 1 billion a year in the long term. By mid-2010 Finance Minister Wolfgang Schuble was seeking savings of 80 billion, or about $102 billion, between 2011 and 2014. Under pressure to find cuts in the Defense Ministry, Guttenberg said the armed forces would have to save as much as 8 billion over that time. The defense ministry is aiming to cut some 8.3 billion euros ($10.6 billion) off its budget over the next four years.

Military officials proposed staying out of defense contractor EADS' Talarion drone project, revising the number of Airbus A400M transport planes Germany is ordering, a reduction in plans for helicopter purchases, tanks and jet fighters. Reductions might include the immediate grounding of 15 Transall cargo aircraft. The number of Tornado jet fighters in service would be reduced from 185 to 85 as quickly as possible, and orders for Puma tanks reduced from 400 to 280. The number of NH-90 naval helicopters on order could be cut from 122 to just 80, and the number of Tiger multi-role attack helicopters from 80 to 40. The Germany navy might have to cut its plans for new frigates from four to three, and take up to eight frigates, 10 high-speed motor launches and 21 Sea King helicopters out of service. Other cuts will include closing many of the 403 barracks, as well as trimming the 9 separate military commands.

On 19 March 2010, the German Bundestag passed the resolution on the 2010 Federal Budget. In a roll call vote, 313 members of the German Bundestag voted for and 256 voted against the draft budget. With 31.11 billion euros this years defence budget is at about the same level as in the previous year. As in 2009, half of the defence budget will be accounted for by personnel expenditure. A total of 16.33 billion euros is earmarked for the remuneration of Bundeswehr personnel in the 2010 budget year, as opposed to 16.46 billion euros in the previous budget year. The same amount as last year, 454.65 million euros, is to be made available for military pay and other allowances for service conscripts.

In 2006 Germanys defense budget totaled US$35.7 billion, or 1.5 percent of gross domestic product. Germanys relatively low level of defense spending is in keeping with the militarys transformation into an international peacekeeping and intervention force.

Over the 1990s, Germany steadily expanded its participation in peacekeeping and humanitarian operations, development assistance, and, most recently, the War on Terrorism. Germany's armed forces form a major component of Alliance military capabilities. Germany is in the process of a significant reform of its Armed Forces. As part of this reform, and with the aim of creating a more professional and deployable force, Germany has reduced active-duty military strength from 338,000 to 282,000 (of whom 85,000 are conscripts). Dedication of adequate resources at a time of tight budgets will be crucial to the successful completion of this reform.

Germany's defense spending increased by a modest 0.6 percent in 2002 (to $29.4 billion), but relative to GDP, remained stable at 1.5 percent -- below the average of 1.9 percent of GDP for all non-U.S. NATO nations. Continuing economic difficulties make it doubtful that defense budgets will be increased in the near-term, and defense spending as a percentage of GDP is expected to remain flat through 2006. In December 2002, Defense Minister Struck accordingly announced deep cuts in most of Germany's major defense acquisition and modernization programs, including A-400M air transports, Eurofighter tactical aircraft, Tiger attack helicopters, Meteor and IRIS-T air-to-air missiles, and frigate, corvette and submarine construction projects. Germany provides the second largest share of total NATO ground combat capability and fourth largest shares of total NATO naval supply, tender and transport tonnage; combat aircraft capability; and military transport aircraft capacity.

Germany ranked first among NATO nations in personnel contributions to multinational peace operations at the end of 2002. There were about 3,800 German troops serving with KFOR in Kosovo, another 1,300 supporting SFOR in Bosnia, and 159 deployed with NATO's Operation ALLIED HARMONY in the Former Yugoslav Republic of Macedonia (FYROM). Moreover, Germany commanded NATO's Task Force Fox in FYROM from September 2001 to June 2002, supporting the international observers monitoring implementation of the peace settlement which resolved that nation's recent civil war. During 2002, Germany also contributed small military contingents to UN peace operations in Sierra Leone, the Republic of Georgia and along the Iraq-Kuwait border, and about 360 civilian police to the UN Interim Administration Mission in Kosovo (UNMIK). Germany also made very large financial contributions to UN peace operations, ranking fourth in absolute terms after the United States, Japan and France ($186 million).

German foreign development assistance contributions totaled almost $6 billion for 2001, ranking third among all the nations covered in this Report. Germany has pledged about $280 million over four years for Afghanistan reconstruction and humanitarian assistance, and has taken the lead in training and equipping the Afghan police. About $12 million was contributed to humanitarian assistance programs in the Balkans during 2002. Germany also contributed $5.1 million for counter proliferation and nuclear threat reduction efforts in 2002, mainly to programs for the destruction and physical protection of chemical and nuclear weapons stocks in Russia and the Ukraine.

Since September 11, 2001, German federal and local governments have allocated considerable resources to enhance force protection for U.S. military personnel and dependents. Bundeswehr troops have been deployed to protect U.S. military facilities and additional support provided by local police. Germany contributed over $861 million in 2001 to offset the costs of maintaining U.S. military forces on its soil, representing about 21 percent of U.S. non-personnel stationing costs in Germany. Almost all cost sharing was in the form of indirect contributions (i.e., waived taxes, rents and other forgone revenues). Finally, Germany works diligently to assure that its airspace is available for both U.S. and NATO training needs, and has granted a blanket clearance for U.S. military aircraft transiting its territory.



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