At the end of last month, a new GlobalData report claimed Germany’s defence budget was increasing by 6.5 per cent compound annual growth rate between 2020 and 2024.
Before defence wonks get too excited, it is worth looking at what that means and whether this is the news that will finally bring music to NATO ears.
Since the NATO summit in Wales in 2014, NATO members have agreed to spend two per cent of GDP on defence by 2024. Whether this is a smart measure to use is a debate for itself, but the wording in the summit agreement is what Germany usually cites as an excuse: the alliance agreed to raise defence expenditure ‘towards’ two per cent. In early 2019, Germany assured its fellow NATO members that it would spend 1.5 per cent by 2024, which displeased members already hitting the target.
President Trump has been vocal about low defence spending in Germany, quoting big budget surpluses and export records. He hasn’t been the first president to complain about European NATO members’ spending behaviour, but he is the first president to threaten to ‘go it alone’.
A poll from September 2018 saw more Germans expressing support for increased defence spending (43 per cent against 32 per cent the year before). Yet 55 per cent don’t support more German involvement in international crises.
Overseas defence watchers often oversee the absence of foreign and security policy debate amongst the German public. Consequently, the voting public lacks understanding of how increasing military spending is in their interest. This requires an honest and transparent conversation between politicians and their electorate, but with support for ruling parties dwindling in recent elections and polling, federal politicians are trying to win back voters. That won’t happen through defence budget increases.
Nonetheless, Chancellor Angela Merkel confirmed an increase in defence spending in May. A boost of more than €5 billion will raise the defence budget to €47.32 billion this year; a 10 per cent increase compared to 2018. This is significant for Germany but only moves spending towards 1.35 per cent of GDP. Reaching the promised 1.5 percent of GDP by 2024 will require a budget of more than €60 billion.
There are also important issues that could thwart any bigger defence budget plans as the economic growth rate decreases. Reports on the state of the Bundeswehr and its tools put an additional question mark behind the country’s commitment to common defence, even though Germany is the second largest troop contributor to NATO missions.
But is it really all about the money? An analysis by the German Council of Foreign Relations argues that more money won’t work without more efficiency. The analysis shows that the current midterm plan could create an investment gap of €46 billion between 2019 and 2024. The newly announced increase of €5 billion now won’t easily overcome that gap. One concrete suggestion from the analysis is a call to establish an independent parliamentary controlled office to control the budget and enhance financial transparency.
So yes, Germany is set to spend more - for now. Whether this the kind of ‘more’ NATO partners are expecting remains to be seen.
Note: Jacqueline Westermann is a regular academic commentator on European and Russian security. In addition to her research for ASPI’s International Program, she has also been working with The German Marshall Fund of the US’ Warsaw office and the Moscow German Newspaper.