German minister for defence Boris Pistorius has admitted that Berlin debt rules mean security spending cannot keep pace with the threats his country faces.
His admission came as chancellor Olaf Scholz prepared to tell the Nato summit in Washington that Germany is finally meeting its alliance obligations to spend at least 2 per cent of gross domestic product (GDP) on defence and security.
Helping the Scholz administration reach that goal this year: a sclerotic economy – forecast growth of 0.35 per cent this year – as well as funds from a one-off €100 billion special off-balance sheet fund set up in 2022.
With that fund’s cash exhausted or already earmarked, Pistorius has been pushing to pivot his ministry’s finances from the special fund to the regular defence budget. Instead of the €6 billion he requested, however, his ministry was granted just €1 billion as part of a coalition deal for a near-balanced budget for 2025.
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“It’s extremely annoying,” said Pistorius on a troop visit, conceding the shortfall would leave him unable to make planned investments in equipment “as the threat situation requires”.
“A lot is expected of Germany and rightly so,” he said. “We are the largest economy in Europe, the largest Nato ally in Europe. We therefore have a special responsibility to assume.”
Defence analysts have suggested the second consecutive annual shortfall in Germany’s defence budget calls into question Berlin’s long-term commitment to Nato spending rules and its own defence.
The debate over the shortfall has also exposed unresolved tensions in Germany over its defence and security priorities.
Three days after Russia’s invasion of Ukraine in February 2022, Scholz announced the Zeitenwende – a surge in defence spending – saying: “We fully intend to secure our freedom, our democracy and our prosperity.”
One camp criticised the €100 billion special fund he unveiled, saying the equivalent of two years’ defence budget was far too little to correct decades of underinvestment in the military.
Meanwhile the daily Tageszeitung, channelling left-wing opposition to greater defence spending, joked in a headline: “Putin rearms Germany”.
On Monday the opposition Christian Democratic Union (CDU) suggested that meeting the 2 per cent Nato spending goal this year was down to Berlin “budgetary trickery”.
And CDU defence spokesman Patrick Sensburg, also head of Germany’s reserve forces association, warned that having 85 per cent less additional money in its budget than expected next year would leave “holes all over” the German defence forces.
The criticism isn’t limited to the opposition benches: leading voices from the Social Democratic Party (SPD), the party of Pistorius and Scholz, described the 2025 defence budget shortfall as a “sobering figure”.
“The result of government budget talks does not correspond to what we need in the defence sector,” said Andreas Schwarz, an SPD MP and budgetary spokesman. “Our task is to make significant improvements in the parliamentary process.”
Just how much progress they can make remains to be seen. Last week Scholz backed budget cuts across all ministries to bring Germany back within self-imposed rules, set aside in the pandemic, to limit deficit spending.
Pressed on defence spending and its Nato commitments last week, the chancellor insisted that his Zeitenwende commitments remain in place and that Germany’s defence forces would be Nato compliant and fully funded from the regular budget – but not before 2028.
Even his coalition allies say challenges remain, with vice-chancellor Robert Habeck of the Green Party acknowledging the 2025 defence spend “does not suit Germany’s security situation”.
“But I don’t wish that because of defence capabilities,” he added, “that Germany has to cut back on education, research, culture and social spending.”
