In response to the Russian war of aggression against Ukraine, Chancellor Olaf Scholz has confirmed that defense spending will increase to two percent of gross domestic product. According to a study by the German Economic Institute, however, this goal is a long way off.
According to a report, Germany will miss NATO’s two percent target in 2023 and from 2026 onwards, despite the 100 billion euro special fund for the Bundeswehr. According to a study by the Institute of German Economics (IW), the goal of spending two percent of economic output on defense is “a long way off and procurements that are necessary in the short term are not progressing,” as the “Rheinische Post” reports.
According to the report, the institute blames the recent price increases, delays in the procurement of equipment and the underfunding of the Bundeswehr in the financial planning of the regular federal budget. In response to the Russian attack on Ukraine, Chancellor Olaf Scholz had confirmed that defense spending would increase to two percent of gross domestic product.
However, as the “Rheinische Post” now reports, citing the IW’s forecast, the regular defense budget would have to be increased “by at least five percent” per year without adding the special fund in order to achieve the two percent target.
Federal Defense Minister Christine Lambrecht announced a further increase in the defense budget at the end of November. In the coming year, the goal of spending two percent of economic output cannot be achieved, said Lambrecht.
The defense budget will “grow up in the future,” she said. The federal government will ensure that procurement gaps in the Bundeswehr are actually closed and “that people don’t just talk and chatter.”
It was clear from the outset that even with the 100 billion euro special fund for the Bundeswehr, the two percent target could not be achieved immediately, she said. The additional expenditure would have to be “spread over a longer period of time”, the two percent target should be achieved “over five years”.
