Berlin slips from NATO spending target

With a 2017 budget up 7.3% to €37bn, €10bn for investment by 2020 and an army of 200,000 by 2024, the new trajectory announced in 2016 for Germany’s armed forces was enough – in theory – to arouse the envy of neighbouring armies. But new elements presented in a German 2018 Federal Budget draft should calm any envy others may have had of Europe’s third military power.

Will Germany turn its back on the financial goals demanded by NATO?

 

After the 2017 surge, Berlin is now looking at an increase of “only” 3.9% (€1.4bn) for military spending in 2018. Goodbye also to the additional €10bn investment budget announced last year for the 2017-2020 period: the budget unveiled on Friday reveals this has been almost halved to €5.3bn for 2018-2021. Far from the financial boom of 2017, the 2018 draft budget seems to indicate that Germany will not make the 2024 finish line set up by NATO for spending 2% of GDP on defence.

In order to do so, Germany would have to almost double its military budget to €65bn, or more if the German economy continues to grow. The latter, engaged on a path of growth up to 2021 at least, artificially limits the extent of the percentage that can be spent on military investments. Thus, if the planned budgetary effort for 2018 is realised, German military expenditure will reach “only” 1.23% of GDP, an increase of … 0.03% compared to 2017, and will therefore remain well below the target set by NATO in 2014. At this rate, Germany would not reach the level of defence spending required by the Alliance until about 2045 …

France, which devotes 1.78% of its GDP to its armed forces, will only have to make an additional effort of €2bn a year to reach the NATO target in five years. So, if the monies are there, what are the obstacles to a gradual increase in the German military budget?

They are both political and cultural. German Defence Minister Ursula von der Leyen is faced with a particularly virulent political opposition, which accuses the government of spending more money on rearmament instead of assigning bigger budgets to education and protecting the environment. The migrant crisis has also absorbed part of the available finances, with the German Ministry of Finance estimating that €20bn a year is necessary to carry out the social policies towards the million migrants to whom Berlin has offered asylum. Moreover, part of the population remains skeptical about the national armed forces, and therefore remains opposed to any policy favouring a rearmament of Germany.