Merkel’s Comments Bring Germany’s Defense Budget Clash Under the Microscope

by Dan Darling, International Military Markets Analyst, Forecast International.

Following the move by U.S. President Donald Trump on May 8 to declare that the United States would withdraw from the Joint Comprehensive Plan of Action (JCPOA) Iran nuclear deal, German Chancellor Angela Merkel stated – for the second time in a year – that Europe can no longer count on the United States for its protection. 

In a speech honoring French President Emmanuel Macron that same day, Merkel said, “Europe must take its destiny in its own hands.”

While an ambitious statement reflecting ongoing concerns in Berlin and across Europe about the drift in U.S. policymaking under the Trump administration, the harsher reality for Chancellor Merkel is that the German Bundeswehr as currently composed increasingly resembles a Potemkin army rather than a real one.

Merkel’s comments more pointedly align Germany’s strategic outlook with that of France under Macron’s European Union (EU)-centric vision.

Since arriving at the Palais de l’Élycée in May 2017, the reform-minded Macron has energetically pushed for EU-led security initiatives such as Permanent Structured Cooperation (PESCO), the European Defense Fund, and a Coordinated Annual Review on Defense (CARD), in addition to presenting his own ideas under the guise of a common doctrine for action, a common defense budget, and a common intervention force.

The latter, the so-called European Intervention Initiative (EII), offers the best option for true European cooperation on out-of-theater operations as it would function beyond a strictly EU format, allowing for participation by European nations outside the EU or NATO institutional structures.

This in turn allows France to extend an invitation to Europe’s most militarily capable nation, the United Kingdom, thus enabling further Franco-British defense cooperation growth post-Brexit while at the same time providing London with access to a European security arrangement minus the stickiness of requiring EU approval.

Just a month ago – when Germany opted to not participate in a U.S.-U.K.-French military action in Syria – the idea of Merkel and Berlin aligning with Macron’s Euro defense vision appeared less than certain.

But then the U.S. decision to abandon the Obama administration’s previous commitment to the JCPOA was announced and the German Chancellor appeared to reach the tipping point. The decision to withdraw from the nuclear deal was reached despite visits to the White House by high-ranking officials of Europe’s three most powerful governments, including personal entreaties made by Macron and Merkel to the U.S. president to uphold the agreement, was seen in Europe as a sundering of delicate trans-Atlantic unity.

Yet despite Merkel’s vocal synchronization with Macron’s EU security vision, Germany has a long way to go before it can uphold an EU defense capability in partnership with France.

While France retains a capable defense apparatus and a willingness to utilize military power in external combat operations to support French interests, Germany embodies the flip side of the security coin.

German politicians and its public at large remain wary of hard power and are unenthusiastic about the prospect of adhering to Berlin’s pledge at the 2014 summit in Wales to spike its annual defense spending upwards to meet the NATO Alliance requirement of earmarking 2 percent of GDP by 2024.

The German government represents a left-right “grand coalition” of Merkel’s conservatives and the Social Democrats (SPD), the second consecutive uneasy iteration put together under Chancellor Merkel – and one that took months of painful deliberations to form. Acting chairman of the SPD, Olaf Scholz, assumed the post of finance minister, thus placing the junior partner of the governing coalition – the hard power-skeptical faction within the cabinet – with power over the nation’s purse.

Scholz’s first federal budget (for fiscal year 2018) was presented on May 2, sparking internal debate within the German cabinet as it earmarked just half of the financing requested by the Defense Ministry – a department led by Ursula von der Leyen of Merkel’s conservative Union coalition.

The defense figure amounts to EUR38.5 billion ($45.5 billion), a nominal year-on-year increase of 4 percent that will prove negligible in terms of providing the additional monies needed to overcome severe capability and serviceability shortcomings. The bulk of annual German defense budgets are eaten up by salaries and pensions, with capitalization and research and development shortchanged more often than not. The lack of adequate investment for new equipment, as well as maintenance of legacy hardware, only pushes the Bundeswehr further behind its NATO allies in terms of capable contributions.

The end result of years of German divestment, neglect, force restructuring, and downsizing of the Bundeswehr is an Air Force with very little available combat airpower (despite a large inventory of Eurofighter Typhoons and Panavia Tornado strike fighters) and negligible transport capacity, a Navy with zero operational submarines and a new class of warships deemed unacceptable by the service itself, and tanks lacking spare parts and sufficient work-up to bring them into operational readiness.

Furthermore, the logistical tail to support the Bundeswehr’s combat “teeth” in out-of-theater operations is basically nil.

With such a weak hand to play, Germany at best can provide moral support to Macron’s Euro security vision while utilizing its status as the principal creditor to the European Union as symbolic weight behind such efforts.

But in the meantime, Berlin continues to fall far short of its NATO pledge, with its 2017 defense budget amounting to just 1.13 percent of GDP, and future budgets out to 2022 as forecast by the Finance Ministry amounting to just 1.23 percent of GDP.

Thus, Ursula von der Leyen’s strange contention made on May 14 that “it is important NATO members don’t get stuck on financial figures” comes across as moving the goalposts.

Such a statement begs the question that if Germany should get a pass for not meeting the shared metrics pledged between security partners, then what standard should be recognized as acceptable?

While von der Leyen contends that Germany is the second-largest troop contributor within NATO, this does not account for the number of troops deployed (much less deployment capable) within NATO-led missions. Nor does it reflect the ability to project force beyond Germany’s borders or the sustainability of deployed troops within a security mission.  And finally, it fails to clarify the rules of engagement for German troops deployed abroad so that they may support and actively participate in combat missions rather than serve as mere bystanders during perilous kinetic operations.

For her part, Chancellor Merkel has struck a more optimistic tone, stating that the likelihood of Germany reaching NATO’s defense investment target of 2 percent of GDP in the years ahead is “not completely beyond the imagination.”

But Merkel must fight the push-pull of a divided cabinet and the realities of Germany’s political environment – one shaped not only by the specter of Germany’s past militarism, but also by the lack of a direct, conventional strategic threat to help galvanize public opinion.

That said, if the goal laid out by Ursula von der Leyen on May 14 is a defense budgetary level of 1.5 percent of GDP by 2025, then Bundeswehr capability and readiness levels will likely remain in question. Moreover, Germany’s willingness to undertake the heavy lifting required to build up its hard power capability – much less wield it – may continue to be pushed ever further down a road littered with the tattered remnants of long-discarded empty promises.


Author Daniel Darling covers Europe and Asia, Australia & Pacific Rim for Forecast International’s International Military Markets series, where he bringings a wealth of expertise on the political and economic forces shaping these markets. The IMM series examines the military capabilities, equipment requirements, and force structures inventories of 140 countries, with corresponding coverage of the political and economic trends shaping the defense outlook for these individual countries and regions.

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