Germany's Half-Baked Zeitenwende

Berlin's failure to spend more on its defence is putting the security of the continent at risk

Photo by Rod Long on Unsplash

Mario Draghi’s hard-hitting report on how to restore European competitiveness has rightly receiving widespread attention. His blunt warning that Europe needs deep reform and massive investment if it is to avoid the “slow agony” of economic decline was powerful because everyone knows it to be true. But his was not the only report published last week that rang alarm bells over Europe’s readiness to confront the immense challenges facing the continent. A report by the Kiel Institute for the World Economy highlighting the “woefully inadequate” level of German military spending in response to the growing threat from Russia raises troubling questions about Europe’s ability to provide for its own defence and highlights the extent to which Germany’s misguided fiscal policies increasingly pose a risk to the security of the continent.

It is more than two years since Olaf Scholz promised a Zeitenwende, or epochal change, in defence spending in response to Russia’s full-scale invasion of Ukraine. No country had reaped a greater post-Cold War peace dividend than Germany, which had allowed military spending to fall to just 1.3 per cent of GDP. The German chancellor committed to raising this to above the Nato minimum target of 2 per cent of GDP as Germany sought to rebuild its military strength. In January, Boris Pistorius, the defence minister, highlighted the urgency with a warning that Russia would be in a position to attack a NATO country within five years. Others recking that, given the pace of Russian rearmament, it could be in such a position within three years.

Yet at the current pace of rearmament, it will take Germany 100 years simply to restore part of its military inventory to the 2004 levels, according to the Kiel Institute’s new defence procurement tracker. For the first year of the Zeitenwende, the bulk of the new spending went on salaries and welfare, with just 12 per cent of the military budget going on military procurement. While orders of new equipment have since picked up, they are still barely above the levels needed to replenish stocks provided to Ukraine and nowhere near sufficient to build new capabilities.