The Real Roots of Germany’s Defense Spending Problem
The 1970s were a decade of anti-war movements. Willy Brandt received the Nobel Peace Prize for his détente policy toward the Eastern Bloc – and West German defense spending peaked at 3.13 percent of GDP in 1975. Clearly, those days are long gone.
Today, German-U.S. relations are at a low point, due in large part to President Donald Trump’s attacks on Germany’s defense spending. Trump has zoomed in on Berlin’s failure to live up to NATO’s 2 percent target, which the alliance adopted at its 2014 Wales Summit in response to the Ukraine crisis. The U.S. president repeatedly insists that many European countries, Germany in particular, do not invest enough in defense – a criticism that is anything but new. Demands for more German spending are no longer exclusively voiced in Washington. NATO Secretary General Jens Stoltenberg recently joined Trump in calling for Germany to spend more on defense.
In recent years, Germany has actually increased its spending by non-negligible amounts, and that trend will continue. Yet there can be no doubt that there is a problem with German defense spending.
More spending is needed, but the real issue is not with the percentage of GDP spent. The underlying problem is that despite the recent talk of “doing more,” Germany still lacks a strategic approach to security and defense – not only for itself, but also for Europe. The lack of financial resources for the German armed forces is only a symptom of this deeper issue, which has its roots in domestic political disagreements and Germany’s history and strategic culture. Spending more will not be the panacea. The real task at hand is to find a model for “European defense 2.0,” involving both NATO and the European Union, that can work toward both collective defense and stabilization south of Europe.
How Did We Get Here?
German defense spending was high until the end of the Cold War (2.4 percent of GDP in West Germany in 1989). Starting in the early 1990s, the defense budget shrank dramatically. In a post-Cold War strategic environment without any imminent threat, reunified Germany took full advantage of the peace dividend. Governments of all political stripes cut funding for the armed forces. The 2011 reform of the Bundeswehr, or German armed forces, brought about fundamental change: Not only was compulsory military service suspended and the number of personnel reduced, crisis management operation scenarios became the basis for planning. This implied inter alia that units were considered fully equipped if they had 70 percent of the necessary materiel at their disposal (and would borrow the rest from other units if needed during exercises or deployments). The result was the hollow Bundeswehr structures of today.
Today, investments in the Bundeswehr are desperately needed. For years, the annual report by the German Parliamentary Commissioner for the Armed Forces has painted a bleak picture of the state of the armed forces. Shortcomings affect personnel, materiel, and infrastructure. Equipment problems in particular receive considerable media attention, such as when it became known in late 2017 that none of the German navy’s six submarines were working. Earlier, a study by outside experts had found that the Bundeswehr’s procurement system was dysfunctional.
This shortfall in investment has begun to change thanks to Vladimir Putin. Earlier warning signs like the 2007 cyber attack on Estonia and the 2008 Georgian war had little impact on German defense policies, but the illegal annexation of Crimea in 2014 was a watershed moment. Territorial defense and deterrence re-entered the picture for NATO, and thus for its member-states. Germany, for its part, became a framework nation leading a battalion battle group in Lithuania as a part of the alliance’s Enhanced Forward Presence. These new commitments came in addition to existing ones in Afghanistan, Kosovo, and elsewhere, putting a heavy strain on the Bundeswehr. With the upcoming adoption of the 2018 “Conception of the Bundeswehr,” that is, the operationalization of the 2016 White Paper on German Security Policy, the return of territorial defense will become official. Crisis management operations like those in Afghanistan or Mali and collective defense will officially be considered tasks of equal importance. In reality, however, defense planners will remain focused on collective defense. It will, of course, require considerable investment to both fill existing holes and make the Bundeswehr fit for its new tasks.
Against this backdrop, Germany’s previous government (composed of the same parties as the current one) decided to increase the budget after the Wales Summit from 35.1 billion Euro (41.16 billion USD) in 2016 to 42 billion Euro (49.25 billion USD) in 2021, when the current election period ends. This will amount to slightly under 1.3 percent of GDP if the economy grows as predicted. Many consider this insufficient in light of the needs at hand. To reach 2 percent by 2024, assuming linear economic growth, Germany would have to double its spending. Defense Minister Ursula von der Leyen now advocates spending 1.5 percent of GDP in 2025, which would still require spending more than currently planned.
Deep-Rooted Political Divides
But even that 1.5 percent target faces political obstacles. The Bundeswehr’s shortcomings and security challenges notwithstanding, there is no consensus in Germany on the need to address these issues by spending more money. Not only is the opposition divided, but the rift goes right through the ruling grand coalition composed of Christian Democrats (CDU and CSU) and Social Democrats (SPD). While the Christian Democrats – notably Chancellor Angela Merkel and von der Leyen – argue for increased spending, Social Democrats warn against an “armament spiral” in Europe. During the 2017 election campaign, the SPD resolutely positioned itself against the 2 percent objective (although it already was part of the government coalition at the time of the Wales Summit). Leading representatives of the party describe spending 2 percent of GDP on defense as “wrong,” saying it has been imposed on Germany by the extremely unpopular U.S. president. Equating more defense investment with acquiescing to Trump certainly doesn’t make things easier for proponents of higher spending. Finally, critics note that if Germany were to reach 2 percent, which would amount to about 80 billion euros, it would have the largest defense budget in Europe, and by far. In light of the country’s history, particularly its role in starting two world wars, leading Social Democrats see this as a problem and argue that ramping up spending could reawaken fears of a militarist and imperialist Germany. The disagreements over defense spending have deep roots in Germany’s history and strategic culture.
There is no unified German take on the changed security environment and the solutions it requires. This is true not just for the political class, but for society at large. The debate around defense spending illustrates this divide. In a 2017 poll by the Körber Foundation, 52 percent of respondents said that Germany should continue to refrain from getting involved in international crises. The same poll reveals that 32 percent want to see increased defense spending (13 percent want a decrease; 51 percent want it unchanged). Although the annexation of Crimea and various terrorist attacks throughout Europe in the last few years came as a shock, Germans do not necessarily conclude that that solution should (or for that matter, can) be found in the military realm. Anything related to the Bundeswehr remains complicated, as public opinion is highly skeptical. It certainly doesn’t help that Germany’s biggest military effort in recent years – Afghanistan – can hardly be considered a success. As an anecdotal illustration of German strategic culture: No one in Germany called for a military response in the Middle East after the 2016 terrorist attack on a Berlin Christmas market – in contrast to French reflexes after the 2015 attacks in Paris.
Still, the defense spending debate has been getting increasingly intense since 2014 and has begun to receive considerable importance in media reporting. Although the armed forces still hardly have any larger constituency in the political class, and defense experts are scarce among politicians, we are hearing more voices than just the usual suspects. Federal President Frank Walter Steinmeier – originally SPD, but nonpartisan in his official capacity – recently declared that “Europe has to take on more responsibility in NATO.” In the expert community, the need for more spending is by and large the general consensus. The recent NATO Summit certainly led to an intensified debate. The rift within the ruling grand coalition nevertheless remains and will likely block progress in the foreseeable future.
Doing More…But to What End?
Russia’s annexation of Crimea in 2014 was a turning point for NATO, which soon after adopted the Wales guidelines and shifted its focus back toward territorial defense. However, much more happened that year within Germany’s defense debates. Just a couple of weeks before the Crimea crisis — and certainly without expecting that old-fashioned territorial war would soon be back in Europe — Berlin rolled out its new language on security policy. This was at least a partial response to strong criticism of German attitudes, perhaps most notably its 2011 abstention from the United Nations Security Council vote on authorizing military intervention in Libya. Then-Polish Foreign Minister Radek Sikorski famously declared that he feared German power less than German inactivity – a point to be understood against the backdrop of Poland’s painful history with its neighbor to the west. Calls for more German engagement were (and are) also a recurrent theme in France, Germany’s key partner in Europe. Following many debates among analysts, the incoming Grand coalition government launched its new discourse in early 2014 at the Munich Security Conference. At its heart is the idea that Berlin wants to assume more responsibility, which has since become a sort of mantra for German politicians and officials.
The problem, of course, is that “doing more” or “assuming responsibility” does not a strategy make. Herein lies the real problem with German security and defense policy. Things have certainly evolved since 2014, notably with the 2016 White Paper, but defining a German approach to strategy remains a work in progress. Today, there is a sense of stagnation in the German debate and, to some extent, a sense of complacency with what has been achieved since 2014. Outside Germany, and notably in France, there is in turn growing frustration. Four years on, it is increasingly clear that hopes for the “normalization” of German strategic culture (and perhaps automatic convergence with French approaches) were exaggerated.
It is in this larger context that the debate surrounding German defense spending should be seen. Accusing Berlin of not contributing to international security would be utterly unfair – as Supreme Allied Commander Europe Curtis Scaparotti recently noted, (while simultaneously calling for more engagement). For example, as of July 2018 1,136 German soldiers serve in Afghanistan and more than 1,000 in Mali). Moreover, more engagement need not necessarily translate into military operations. As Niklas Helwig argued in War on the Rocks last year, Berlin is undertaking a number of efforts to push Europe toward deeper defense integration. Within the Atlantic Alliance, Berlin is pursuing its Framework Nations Concept. Beyond defense, there’s also Germany’s role in attempting to solve the Ukraine conflict and its 2016 OSCE chairmanship.
Holistic German Leadership is Needed
Yet with European defense at the crossroads and Europeans in need of updated approaches to their security, the debate is still focused on only parts of the problem. The big picture is missing: How will Europe’s security be ensured in the decades to come? How can Europeans tackle threats to the east and to the south (as well as to the north in the Arctic), and how can they engage in both collective defense and crisis management with single sets of forces in times of scarce resources? Finally, how can Europe’s security be ensured if the transatlantic relationship deteriorates further? The dots between these various debates are never connected, and there is no political leadership prepared to connect them. Since both NATO and the EU Common Security and Defense Policy (the new European Defense Fund being the only exception) are intergovernmental, updating the old European approach to defense is first and foremost a task for the capitals. It is for them to do the thinking and to provide ideas and leadership. As of today, however, there are merely islands of leadership, such as Paris pushing forward its European Intervention Initiative or the European Commission with its European Defense Fund.
Germany could – and should – be much more present in this context. So far, it is mainly reacting to others. Holistic German political leadership based on thought-out and well-balanced concepts would be helpful. Due to its size as well as its middle-ground positions on many issues (in particular, defense priorities to the east and to the south, collective defense, and crisis management), Germany could play an important role in connecting the dots of Europe’s defense debate. Indeed, among the larger European states, Germany has the most potential to unite Europeans behind a common strategy. This strategy must take all threats and challenges seriously and incorporate close cooperation between the European Union and NATO. Moreover, as Ronja Kempin and I have argued in these pages, making the link between European strategic autonomy and transatlantic burden-sharing is crucial. But, in light of an evolving transatlantic relationship, ideas for future European defense must also acknowledge the possibility that the United States will no longer be there to guarantee the continent’s security.
Against that backdrop, the exclusive focus on Germany reaching the 2 percent target is not only annoying; it is counterproductive: It suggests that the German – and thus, by extension, European – defense problem can be solved through money alone. The current problem is not only about capabilities. It is a political leadership problem, a reflection of a lack of willingness to accept realities, and a lack of ideas. Such leadership is currently absent, but Americans and other Europeans should request it from Berlin. To provide it, Germany will have to do its homework: It will need to work on its approach to defense and strategy and explain to its citizens and large portions of its political class that defense is not just a nice-to-have for security wonks but a real must-have in today’s world. Of course, Germany will still have to invest in its armed forces so the Bundeswehr can take on required tasks. But defense spending is only a means to an end, not the end in itself.
CORRECTION: An earlier version of this article incorrectly described a study on the Bundeswehr as being conducted by McKinsey. The study in question was conducted by KPMG, P3, and Taylor Wessing.
Barbara Kunz is a research fellow at IFRI’s study committee on French-German Relations. She works on European defense and security, particularly in France, Germany and the Nordic countries. She teaches at Paris’ Sorbonne University and was a visiting scholar at SAIS’ Center for Transatlantic Relations.