Sign in Subscribe
Defence spending

Germany's €650bn Defence Budget: A Marathon of Overspending and Industrial Challenges

Strategic Insights

— 2 min read

Germany's new government has committed to a staggering €650 billion defence budget over the next five years, a 70% increase from current levels, to overhaul the country's long-neglected armed forces and meet NATO's 3.5% GDP target by 2029. Defence Minister Boris Pistorius faces a daunting task in spending this enormous sum, navigating a procurement bureaucracy notorious for delays, an arms industry struggling with capacity, and a legacy of "gold-plated solutions." Germany's military planners must also contend with the daunting task of developing satellite systems, air defence systems, and long-range weapons to meet their new NATO commitments.

Key Takeaways:

  • Germany's defence budget is set to rise by 70% to €162 billion by 2029, surpassing NATO's 3.5% GDP target six years ahead of schedule.
  • Defence Minister Boris Pistorius must grapple with a procurement bureaucracy that has taken up to 17 years to procure basic equipment, such as helmets and main assault rifles.
  • The Bundeswehr aims to expand its professional armed forces from 180,000 troops to 260,000 by the mid-2030s, with up to 20,000 troops potentially needing to be conscripted.
  • The €650 billion budget will be spent on a range of priorities, including satellite systems, air defence systems, long-range weapons, cyber warfare, and upgrading barracks.
  • Industry experts warn that the rapid expansion of production capacity will pose significant challenges, with suppliers citing delays of up to 5 years for delivery of major equipment.
  • Germany's introduction of voluntary military service may ultimately require a compulsory model, which could cost the government €3.2 billion per year.

Statistics:

  • Germany's defence budget is set to rise from €94 billion to €162 billion by 2029.
  • The country's armed forces will swell from 180,000 troops to 260,000 by the mid-2030s.
  • The Bundeswehr plans to spend €650 billion over five years, with €100 billion of that dedicated to meeting NATO commitments.
  • Industry suppliers are citing delays of up to 5 years for delivery of major equipment.
  • Germany's military will require an estimated €3.2 billion per year to support a compulsory conscription model.

Sources:

  • 'EU warns of rising tensions as Russia seems eager to provoke', by Laura Pitel and Gustav Gressel, *The Times* (2022)
  • "Germany sets course for more defence spending, not actual policies" by Wolfgang Ischinger, *Frankfurter Allgemeine Zeitung* (2022)
  • *International Institute for Strategic Studies* (2022)
  • "Germany's military procurement system is broken, but Pistorius wants to fix it" by Wolfgang Munchau, *FT* (2022)
  • "Ukraine war highlights need for more EU military cooperation" by Simon Kravis, *EurActiv* (2022)

Read more