When the Russian attack on Ukraine shocks the world, Chancellor Scholz announces a turning point – the Bundeswehr is to receive 100 billion euros, and NATO’s two percent target is to be met. Three months pass, now the Bundestag decides on the special fund. An overview.
For weeks, the traffic light parties wrestled with the Union parties over the special fund for the Bundeswehr. Now both sides agree, the Bundestag finally votes on the project. In the coming years, an additional 100 billion euros could flow into the armed forces, which are currently only conditionally operational due to massive equipment shortages.
Why does the Bundeswehr need so much money?
After the end of the Cold War, Germany also made massive savings on defense spending. Three decades later, everything is missing: decrepit fighter jets, helicopters that don’t fly, tanks and guns that are rusting away in the workshop. The statement made by Army Inspector Alfons Mais on the day of the Russian attack on Ukraine in February caused a sensation: After years of austerity, the Bundeswehr was “more or less empty”.
What did the Ukraine war change?
Chancellor Olaf Scholz announced the special fund in his “Zeitenwende” speech in the Bundestag at the end of February. With the Russian war of aggression in Ukraine, it became clear that Germany must become more involved in NATO’s east. The allies there fear that they themselves will be the target of attacks. Against this background, Scholz has also promised that Germany will from now on meet the NATO goal “year after year” of spending two percent of economic output on defense.
Why not just increase the defense budget?
In order to achieve the two percent defense spending, the German defense budget would have to increase to around 70 billion euros. This year it is 50.4 billion euros. But after the credit-financed billion-euro programs against the economic consequences of the corona pandemic, Federal Finance Minister Christian Lindner wants to comply with the debt brake again from next year. The special fund has the advantage that it does not fall under their specifications.
Why was Union approval necessary?
The federal government wants to enshrine the special fund in the Basic Law, which also includes the debt brake. It can only be changed with a two-thirds majority. The SPD, Greens and FDP need votes from the Union for this.
What was the argument?
The CDU/CSU had insisted that the two percent be reached permanently and not fall below when the special fund is used up. The compromise formula is now that the two percent are achieved “on a multi-year average of a maximum of five years”. After that, the funds should continue to be used to “guarantee the German contribution to the then applicable NATO capability goals”.
The Greens also wanted to finance spending in areas such as cyber defense or civil protection from the special fund, which the Union opposed. The funds for this should now come from the normal federal budget.
How is the special fund set up?
The government wants to add a new paragraph 1a to Article 87a of the Basic Law. In addition, there is the so-called establishment law, for which only a simple majority is required. It stipulates that the Federal Ministry of Finance may take out the necessary loans and must provide annual information on income and expenditure.
What is to be purchased from the special fund?
The lion’s share of the funds is to be used for the Air Force at almost 41 billion euros. In particular, the purchase of US stealth fighter jets of the type F-35 and Chinook transport helicopters, a Eurofighter version for electronic warfare and the armament of the Heron drone are planned. In addition, new corvettes and frigates are planned for the Navy, as well as successors to the Marder armored personnel carrier and the Fuchs troop carrier.
How will the debt be repaid?
The repayment of the loans should “begin no later than January 1, 2031” and “over a reasonable period of time”. An end date has not been mentioned, but it will likely take at least two to three decades for the debt to be repaid.
