Germany's battle: Defence spending struggles amid political discord and NATO obligations

About a decade ago, only 20-30 percent of military equipment was operational. These readiness figures caused great concern in Germany. However, there has been budgetary reallocation and readiness has improved in many areas since then. A military equipment repair program was also introduced as a measure to tackle this problem.

The preceding Christian Democratic-led government initiated these measures, and the following coalition, made up of SPD, The Greens, and FDP, continued them. In 2022, the Bundeswehr was allocated a budget of roughly £44 billion - a substantial 7 percent more than the previous year. This budget increased to about £62 billion in 2023.

Although these funds are substantial, Berlin still does not fulfil NATO's requirement to devote 2 percent of its GDP towards its military. This mark is expected to be reached only by 2028, leaving Germany short by roughly £16 billion. NATO rejects the estimated £98 billion dedicated specifically for modernisation because it's distributed over time and isn't included in the defence budget.

Out of this £98 billion, Germany plans to spend most on expanding its naval forces. For instance, submarines are estimated to cost about £2.7 billion, surveillance submarines will cost about £2 billion, and the P-8A Poseidon patrol aircraft will cost around £1.4 billion.

Military modernisation projects have been approved for the army, including the purchase of Puma infantry combat vehicles and new assault rifles. A new fleet of evacuation vehicles, Korsak reconnaissance vehicles and anti-aircraft 'Boxers' equipped with a Skyranger 30 A3 system will also be introduced.

The air force will receive the F-35A Lightning II aircraft.

Despite these strides, there are still several gaps that must be addressed in the coming years, such as short-range air defence.

The main challenge Germans face is time. Funds, national industry capabilities and expertise exist, but political will is sorely lacking. Another instance of internal discord has arisen within the coalition government.

For two years, the German Greens have been advocating not only for increased aid to Ukraine, but mainly for increased defence spending. Chancellor Scholz, from the governing coalition's SPD party, has consistently opposed this. Currently, Foreign Minister Annalena Baerbock is calling for an increase in the defence budget.

Baerbock believes that the roughly £98 billion set aside for technical modernisation of the army is not sufficient. She highlighted the need for increased spending not only because of the aid that should be sent to Ukraine, but also to ensure better security for Germany and NATO's eastern flank allies.

Her concerns were triggered by declarations from Donald Trump, a prominent candidate in the US presidential race. He has repeatedly stated his opinion that the USA should withdraw from the alliance and Europe should manage its own issues. Recently, he suggested countries that do not invest enough in their defence could be left to whatever fate Russia might decide.

As a result, Baerbock stresses that European countries should enhance their military capabilities to a level where they can maintain security without depending on the political situation in the USA and its current White House incumbent. Similar arguments have been put forth from the Christian Democratic opposition and certain state leaders - notably, Bavarian Premier Markus Söder who proposed raising defence spending to 3 percent of GDP.

The Chancellor remains unresponsive to these calls for action. On 16th February, Olaf Scholz said in an interview with 'Süddeutsche Zeitung' that increasing budget allocation towards military modernisation was a bad idea and funding from the current defence budget was adequate.

He stated that by 2028, depending on budget revenues, roughly £99-£101 billion would be set aside for the military. Finance Minister Christian Linder supported Scholz's statement, asserting that Germany currently assigns more than 2 percent of its GDP to the Bundeswehr, although not in the form of budgetary funds but including a special modernisation fund.

Since his early days as Chancellor, Scholz has been obstructing the development and modernisation of the armed forces and the provision of aid to Ukraine. He has resisted even his own government, disregarding pressures from then-Defense Minister Christine Lambrecht, his political base and public opinion. Not in a long time has a Chancellor received such unified criticism from all corners of the political spectrum.

He eventually dismissed Lambrecht from her post and installed his close aide Boris Pistorius in her place. During a meeting in Ramstein in 2023, Pistorius shot down any plans to aid Ukraine. It took pressure from Washington to force a change in this stance.

Now, Pistorius, together with Scholz and Linder, is endeavouring to limit defence spending, despite resistance within their government, the federal states and society, which is gradually acknowledging that years of neglect in defence matters are starting to show.