With a special fund of 100 billion euros, Olaf Scholz wanted to push the “change of the era” in security policy. But lack of money is not the only problem. What about urgently needed reform?
Less than three days ago Vladimir Putin sent his troops to take the Ukrainian capital of Kiev as the chancellor took the podium in the German Bundestag. On February 27, Olaf Scholz summed up the most costly and extensive plans to date for strengthening the Bundeswehr in a term that will later be named “Word of the Year” in the autumn: a change of era.
“We are experiencing a turning point,” says Scholz. “That means the world after is no longer the same as the world before.” Indeed, for many in those days, the weather seemed to have changed overnight. For the first time since World War II, a campaign of extermination is being waged against a sovereign European state. The breakthrough refers to the outrage happening in and with Europe and calls for action.
Stop lazy tanker
But the chancellor’s breakthrough could do even more: it’s not just a cause, it’s also a good goal. It will be necessary to turn the tide ourselves – in German foreign and defense policy, which has failed and requires a reorientation. The naive assumption that an imperialist like Vladimir Putin can be defeated with good words and economic relations has failed. The tanks over Kyiv make a laughing stock of Angela Merkel’s “change through trade” strategy vis-à-vis Russia.
So now the order of the day is: stop the sluggish tanker, reverse thrust and head in another direction full force. After Scholz’s speech, the majestic sum of 100 billion euros is in the room for the “full power” factor. As a “special fund” it is intended to finance the qualification of the Bundeswehr. A smart move, because a simple increase in the federal budget would not be possible due to the debt brake. The special fund means that this money, even if raised through new debt, can only be invested for the end of the century. For Treasuries, this makes the key difference that allows them to approve this new debt.
But the size of the billions decreases significantly when you compare them to the 64 billion euros that add up as austerity policy deficits in the defense budget over the past three decades. This is the analysis of the German Society for Foreign Policy. The long-standing underfunding, which has only been partially corrected in recent years, has left large gaps in the equipment of the Bundeswehr.
Two other factors also reduce the special fund: First, inflation in the arms industry has a greater impact than in other sectors. The special fund, on the other hand, should be issued in five years. This is how the market works: Those who have to invest money under time pressure will not get the best prices from the suppliers. Especially when, in view of the fragile global political situation, other governments also have the idea of equipping their armies better – and in case of doubt they have long since ordered new weapons and ammunition due to leaner bureaucracy when Germany starts discussing this.
A sentence full of self-evidence
According to Scholz, the goal of all efforts is “an efficient, ultra-modern and progressive Bundeswehr that reliably protects us”. A sentence that seems to consist of nothing more than obvious things that aren’t obvious given the state of the German military. The shopping list of the Federal Ministry of Defense (BMVg), which was made public in June, was correspondingly long.
The “air dimension” makes up the largest item on the list called the “business plan.” It includes, among other things, the US F-35 fighter jet, which will replace the outdated Tornado. So the ministry wants to procure more CH-47 heavy transport helicopters, further develop the Eurofighter for electronic warfare, order light support helicopters for the army and arm the current Heron TP drone.
With estimated costs of €40 billion, projects of this size account for the largest volume. But the lists for land and sea dimensions were also lengthy and expensive, as well as a separate entry for digitization and management skills. Too long and too expensive, as the Federal Audit Office ruled after reviewing the business plan in the fall.
In his statement, he criticizes, among other things, “that the BMVg has not yet factored debt service spending from 2024 into its planning. A ‘buffer’ for rising interest rates and for rising of procurement and development expenditures due to inflation is also indistinguishable.” The audit authority calls for more caution in planning.
The fact that the ministry did not initially even discount inflation, which will naturally reduce the purchasing power of 100 billion in the coming years, does not suggest that Christine Lambrecht is preparing her department for the great challenges that a real breakthrough would bring with he assumed. In the ZDF interview, military historian Sönke Neitzel lacks the will to “think big and implement it” to “tackle the big problems”. Germany is in the process of “running the breakthrough into the wall at full speed”.
Too small, too complex
Michael Brzoska of the Institute for Peace Research and Security Policy at the University of Hamburg has investigated where the biggest problems lie in the equipment of the Bundeswehr. ‘It’s not about the money, stupid’ – ‘It’s not about the money, stupid’ is the name of the study, which among other things complains about risk aversion in the procurement bureaucracy. According to the study, administrative processes are so fragmented and complex that procedures take too long.
Brzoska’s critique is similarly expressed in the procurement apparatus itself. To protect yourself from legal action from suppliers that have not been considered in an award, you need to create case-by-case dossiers. Even when ordering a new model of long underwear, the regulations require such comprehensive control for sustainable production, skin and environmental compatibility, compliance with all EU directives and many other parameters which in the past could be took nine months for the order to deliver new long underwear was advertised at all.
How many test processes are required to award a billion dollar contract for fighter aircraft is probably beyond the possibilities of your imagination. The criticism of German security experts is that nothing has changed in this nested administrative apparatus overloaded with regulations. However, it is necessary to streamline the system, streamline hierarchies, minimize redundancies and pool skills.
But the BMVg, as a house involved in such processes, works completely differently. There is a whole level of hierarchy there, it is said, that does not exist in any other ministry. To put it simply, there is an additional floor with desks where papers end up that used to be on other desks for the exam, which further extends the entire exam process.
That defense spending needs to be audited and controlled – there is no doubt. However, if this is done on a scale that pushes the apparatus to the brink of its ability to perform, there is no point in turning a few screws. The entire system needs to be realigned. Sönke Neitzel sees no will for such a reform, either on the part of the minister or the Chancellery.
16 types of tanks in European NATO countries
Michael Brzoska also lacks the clear focus of procurement in his analysis. For years, the EU and NATO have agreed that it makes sense for partner countries to rely on the same types of weapons, even ordering them together if possible. A larger quantity lowers the company’s production costs and simplifies further development. It is hugely beneficial to the cooperation of armies if soldiers from different nations are familiar with the same weapons.
That’s the theory. In practice, the European NATO countries alone use 16 different types of armored personnel carriers. If a joint procurement can be agreed, many of the governments involved – the Germans in any case – draw up special national requests which are also presented.
The contractors, but also the Bundeswehr itself, all too often strive for the so-called “golden edge” solution with many extra tricks for every possible combat situation. As an example, Brzoska cites the purchase of two tankers, for which the Navy insisted on a special project, “although according to the assessment of the Federal Finance Office, the price auditors of the purchasing office and external experts , a significantly cheaper solution” would have been possible. The tank “Puma” demonstrated in mid-December what still threatens, apart from a significant increase in costs, if the devices are technically overloaded – total failure.
Another factor leading to high additional costs is the preference accorded to the own arms industry over foreign companies which would offer better prices. In principle, the suggestion to commission the German armaments industry is understandable. But given the obvious capability gaps that have existed in the Bundeswehr for years, value for money must come first. Localization policy cannot be allowed in the current disaster.
And while there is absolutely no reason not to order from the domestic manufacturer, for example when it comes to replenishing incredibly low ammunition stocks, Germany is not addressing the situation. The recent munitions summit held in the Chancellery led to an exchange between politics and the arms industry, but without concrete orders.
A ray of hope is the approval of the Bundestag Budget Committee for the purchase of 35 stealth jets from the US manufacturer Lockheed-Martin. F-35s are already flying in several European militaries and offer sophisticated stealth technology that makes it difficult for enemy radars to locate the aircraft. However, things will get really exciting now when it becomes clear how much time will pass between the decision and the order.
