As of: February 11, 2024, 10:40 a.m
By: Lars-Eric Nievelstein
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Split
Ukraine needs new air defense systems, the USA is insisting on NATO's 2 percent target.
There is a clear warning from the arms industry: the special fund is not enough.
Berlin – The defense budget appears to have been saved.
After the adjustment meeting in the Budget Committee of the German Bundestag, the economic plan for the special fund for 2024 has been finalized.
In total, around 71.8 billion euros from the defense budget and the Bundeswehr's special assets should form the basis for the further implementation of the so-called turning point, which aims to make the Bundeswehr fit for war.
However, industry associations warn: There are clear risks in the long term.
Germany's defense spending in 2024 |
52 billion euros (excluding Bundeswehr special funds) |
|---|---|
Bundeswehr special assets total |
100 billion euros |
Of these, 2024 will be issued |
19.8 billion euros |
Germany’s defense spending in 2027 (forecast) |
52 billion euros (Bundeswehr special funds used up) |
Turning point in the defense industry – “It’s possible if we all want it”
“The defense budget not only provides significant funds for armament-intensive measures, but also takes comprehensive account of the general challenges of rising operating and personnel costs,” said the Federal Ministry of Defense.
The spending volume of the Bundeswehr special fund is expected to be around 19.8 billion euros for 2024 - an increase of 11.0 billion euros compared to 2023. Among other things, the Ministry of Defense will use this to pay for the procurement of radio equipment, light combat helicopters, ground-based air defense and the F-35A weapon system.
Why the German arms industry is in crisis – 2 percent target in danger © IMAGO / Rudolf Gigler
Another three billion euros are spent on the procurement of ammunition.
“Our goal is clear: to enable the Bundeswehr to provide modern national and alliance defense,” said Defense Minister Boris Pistorius (SPD).
“Security doesn’t come for free.” The government takes security and defense seriously – this year’s budget will achieve a NATO quota of 2.1.
For the first time in decades.
Projects such as the delivery of the Leopard tanks and the self-propelled howitzers were completed in half the working time.
“It’s possible if we all want to do it together,” said Pistorius at the Bundeswehr conference last November.
Defense industry is willing, but the resources are lacking
The Federal Association of the German Security and Defense Industry (BDSV) issues a clear warning.
Dr.
Hans Christoph Atzpodien, general manager of the association, sees the lack of funds and orders as a risk.
In his opinion, there is a gap between the great expectations of higher production.
“It is absolutely not due to a lack of will on the part of the industry that we have not already achieved higher volumes,” explained Atzpodien when asked by
Ippen Media
.
Immediately after the Russian attack on Ukraine, the German defense industry received an order from the Ministry of Defense to “do everything” to make the Bundeswehr ready for combat.
Atzpodien criticizes: “Many of our companies then made efforts - sometimes at their own risk - to improve the Bundeswehr's equipment as quickly as possible.
Unfortunately, almost nothing could be ordered at the beginning due to budgetary reasons.” This has “fundamentally improved” since Minister Pistorius took office - but the federal government has not followed his call to increase the regular defense budget.
Bundeswehr special funds used up by 2027 – 2 percent target in danger
However, this is absolutely necessary because, according to the BDSV, the Defense Ministry's much-discussed special fund of 100 billion euros is expected to be used up in 2026.
It is not yet clear how the Federal Republic will then invest two percent of its gross domestic product in defense - in keeping with its NATO commitment.
According to forecasts, 96 billion euros would be needed for this in 2028.
For comparison: According to the 18th Armaments Report, the Ministry of Defense has budgeted around 52 billion euros for 2027 - without special funds.
This should be used up by 2027.
According to the planning, the regular budget for defense would change marginally compared to 2024.
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“This naturally also puts pressure on companies’ willingness to take their own risk by building up further capacity without a firm order perspective,” explained Atzpodien.
It is clear that the Bundeswehr will have far greater needs beyond 2026 than the special fund can meet.
Significantly more money for security and defense
Now “everything” depends on “whether we as a society understand that we still have to spend significantly more money on our security and defense than we currently do.”
Politicians must now set the course for the 2025 budget and the following years.
Depending on the product, a certain amount of lead time is necessary for production.
“The sooner you order, the faster delivery can take place,” explained the defense industry.
The defense industry companies are ready, but there is a lack of binding orders from the Bundeswehr.
A solution to the problem of a shortage of skilled workers is provided by Dr.
Atzpodien still: Due to the reduction in personnel in the automotive industry, trained personnel are available in many areas “for ramping up arms production”.
She had not yet responded to a request about what challenges there were to be combated at the level of the Bundeswehr.
NATO recently said that Germany could become a central “hub” for the defense alliance's reinforcement and supply lines in Europe.