Germany Faces Tall Task in Reversing Bundeswehr’s Decline

“War has returned to Europe. Germany and its allies once again confront a military threat. The international order is being attacked in Europe and around the world. We are experiencing a turning point, or Zeitenwende, as it is called in German.”

So begins the new German defense policy guidelines (Verteidigungspolitische Richtlinien 2023) released by Germany’s Defense Minister Boris Pistorius on November 10.

The new defense policy guidelines are the first for Germany since 2011 and follow on the country’s first-ever National Security Strategy published earlier this year in June.

Together both documents build upon Chancellor Olaf Scholz’s announcement on February 27, 2022, that Germany would need to undertake a massive shift in defense policy in the wake of Russia’s invasion of Ukraine.

During that announcement at a special session of the Bundestag (German parliament), Scholz outlined two fundamental goals crucial to the revamping of the Bundeswehr:

  • The elevation of annual German defense spending up to, and above, the 2 percent of GDP minimum NATO budgetary requirement
  • The ring-fencing and allocation of a one-off €100 billion ($108 billion) “Special Fund” (Sondervermögen) that would fall outside the core defense budget and be used to help modernize and upgrade Bundeswehr equipment.

The Special Fund required opposing political parties in the Bundestag to agree to a change in the German constitution to allow the additional debt, which – due to the amendment passed on June 3, 2022 – effectively allows Berlin’s financial planners to bypass the national Schuldenbremse, or “debt brake”. The debt brake is a rule that limits new federal debt to 3.5 percent of GDP unless the legislature declares there is an economic crisis, as it did from the start of the COVID-19 pandemic in 2020 through 2022.

Passage of the measure was both unprecedented and a rare moment of political agreement on a sensitive subject for a nation with an ingrained pacifist culture.

This pacifist outlook – a result of the former West Germany confronting the crimes of the former Nazi regime during the post-Second World War-era – has enabled multiple generations of German politicians to ignore the decrepit state of the Bundeswehr.

The result of this neglect emerged in early 2022, when Bundeswehr Chief, General Alfons Mais, posted on social media that the German Army was more or less depleted and that its pleas for more investment – dating back to Russia’s takeover of Ukraine’s Crimean Peninsula in 2014 – had fallen on deaf ears.

Hence the rebuilding of the Bundeswehr presents a daunting challenge for Pistorius and his ministry.

The latest defense policy guidelines spell out laudable goals: providing for a warfighting-capable military force, reassuring its NATO allies of its ability to project a credible deterrent, and serving as the backbone in the defense of Europe.

But the journey involved in achieving those goals promises to be a long and difficult one.

Despite efforts to improve and increase Bundeswehr recruitment, the German military remains 30,000 troops short of its targeted strength of 203,000 personnel. Its reserve component – totaling around 34,000 – requires another 60,000 reservists to meet the national goal.

Ammunition stocks are so low that in the event of hostilities they would only last a few days. Ground troops rely on radio equipment that is 40 years old and analogue. German soldiers are quartered in dilapidated barracks and are left to buy their own equipment.

Transporting soldiers and equipment – crucial to rapid response in a European conflict involving a NATO partner – is limited by a legal system and its labyrinth of separate rules and permits over Germany’s 16 states which render moving armored vehicles a logistical nightmare.

For Germany to bring its military up to a more competent standard, much will need to take place. Better training, recruitment, and equipping of troops; the buildup of a robust logistical tail; improvement of the serviceability rates of key platforms; and a shift in public attitude toward the military represent key requirements.

Yet nearly two years since Olaf Scholz made his pronouncement that his government would commit to fielding a stronger, technologically-advanced military there has been little in terms of progress.

While some €30 billion of the €100 billion Special Fund has been earmarked for high-end acquisitions, the delivery timeline for key procurements such as 35 F-35 combat aircraft, 60 CH-47F Block II Chinook heavy-lift helicopters, and a first batch purchase of five P-8A Poseidon maritime patrol aircraft will run from 2025 through at least 2030. Meaning key future enablers – while on the way – are not arriving today.

Meanwhile, equipment capabilities transferred to Ukraine have yet to be replaced, which in turn extends the timeline for rearming the Bundeswehr.

Further, Germany’s Court of Auditors noted in the fall of 2022 that the projects set forth for procurement and financed by the Special Fund exceeded the €100 billion ring-fenced for acquisition. High inflation and a stronger U.S. dollar were cited as some of the impediments at the time, as were the costs of after-purchase servicing of the expensive new equipment.

Plus, the funding is loaned to the Defense Ministry by the Ministry of Finance at a five percent lenders rate, which coupled with inflation reduced the actual purchasing power of the fund down from €100 billion to €85-€90 billion.

There are also looming questions related to the Special Fund, such as: How fast will this spending unfold, and will it be completed before the next scheduled elections of 2025 when the vagaries of politics intrude? And how efficiently will the traditionally understaffed (and inefficient) Defense Ministry’s military procurement office (BAAINBw) perform during the rearmament process?

The Scholz government can promise to commit more towards the Bundeswehr and Defense Minister Pistorius can outline goals in a document, but in a country where 71 percent of voters reject Berlin’s recent vow to assume a leadership role in the defense of Europe how much follow-through is to be expected through 2025 and beyond? Particularly if the Ukraine conflict is concluded through either armistice or Russia’s victory or defeat?

More importantly, at a time Berlin confronts a €17 billion ($18.3 billion) deficit there are few good alternatives left for Olaf Scholz’s three-party governing coalition but to make spending cuts. In a country where fiscal issues and historical concerns over hyperinflation are in the forefront of voters’ minds, committing to guns over butter is a surefire political loser. And while the government has declared its intention of hitting the 2 percent of GDP target for defense spending, initial plans for 2024 indicate it will continue to fall well short – even with allocations from the Special Fund factored into the planned €52 billion ($56 billion) defense budget topline.

Right now, what the Bundeswehr has are promises of support and some big-ticket equipment purchases in the pipeline. For a military short of basics such as assault rifles and bandages this is not enough – even if it is more than what it received in past decades.

NATO allies have long lost patience with Berlin over its lack of military capability and commitment, while the German public is less than thrilled with the prospect of remilitarization in any form.

Decades of political decisions and policies have placed Berlin in its current predicament, and it will take no less than a full decade to pull the Bundeswehr out from its lowly position. Yet there is no guarantee that even that may be achieved should the necessary follow-through be undertaken.

A long and difficult road ahead, indeed.

About Daniel Darling

Dan Darling is Forecast International’s director of military and defense markets. In this role, Dan oversees a team of analysts tasked with covering everything from budgeting to weapons systems to defense electronics and military aerospace. Additionally, for over 17 years Dan has, at various times, authored the International Military Markets reports for Europe, Eurasia, the Middle East and the Asia-Pacific region. Dan's work has been cited in Defense News, Real Clear Defense, Asian Military Review, Al Jazeera, and Financial Express, among others, and he has also contributed commentary to The Diplomat, The National Interest and World Politics Review. He has been quoted in Arabian Business, the Financial Times, Flight International, The New York Times, Bloomberg and National Defense Magazine. In addition, Dan has made guest appearances on the online radio show Midrats and on The Media Line, as well as The Red Line Podcast, plus media appearances on France 24 and World Is One News (WION).

View all posts by Daniel Darling →