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Germany’s Bundestag approves €100 billion fund to beef up defences

The German parliament voted on Friday for a constitutional amendment to create a € 100 billion fund beefing up its military defences in the face of an emboldened Russia.

Published: 4 June 2022 10:50 CEST
Germany's Bundestag approves €100 billion fund to beef up defences
German Chancellor Olaf Scholz addresses parliament on a budget debate during a session at the Bundestag (lower house of parliament) in Berlin on June 1, 2022. (Photo by Tobias SCHWARZ / AFP)

Deputies of the Bundestag lower house approved the measure 567 votes to 96 with 20 abstentions after the centre-left-led government and the conservative opposition reached a deal on Sunday.

The watershed move answers years of criticism from close allies that Berlin was failing to achieve NATO’s target of spending two percent of GDP on defence.

The Bundesrat upper house must still approve the measure.

“This is the moment in which Germany says we are there when Europe needs us,” Foreign Minister Annalena Baerbock of the Green party told MPs.

READ ALSO: ANALYSIS: Are Germans questioning Merkel’s legacy?

Three days after the Russian invasion of Ukraine in February, Chancellor Olaf Scholz pledged a special budget of 100 billion euros to rearm the German military and modernise its outdated equipment over the next few years.

But critics have since accused Scholz of timidity in his support for Kyiv and failing to take enough concrete action in terms of arms deliveries.

The agreement will allow Berlin to achieve NATO’s target of spending 2.0 percent of GDP on defence “on average over several years”.

Russia blasted the move on Friday, accusing Germany of “remilitarising” and using language that summoned up its Nazi past.

“We take that as another confirmation that Berlin is on the path to a new re-militarisation,” said Russian foreign ministry spokeswoman Maria Zakharova.

“We know only too well how that can end.”

It appeared to be a reference to Nazi Germany’s re-armament programme in the 1930s under Adolf Hitler that plunged the world into war.

‘Largest army in Europe’

The bulk of the German investment — € 40.9 billion — will go toward the air force with the acquisition of 35 US-made F-35 fighter jets, 15
Eurofighter jets and 60 Chinook transport helicopters.

READ ALSO: Germany to deliver air defence system to Ukraine, says Scholz

Nearly € 20 billion will be earmarked for the navy, mainly for new corvettes, frigates and a 212-model submarine. More than € 16 billion will beef up the army’s holdings with Marder transport tanks and Fuchs armoured troop carriers.

Scholz said this week that the agreement would “considerably strengthen” the security of Germany and its NATO allies.

“Germany will soon have the largest conventional army in Europe within NATO,” he told local media.

The exceptional fund will be financed by additional debt.

For that, it was necessary to circumvent the “debt brake” rule enshrined in the constitution, which caps government borrowing. This was why the government needed the support of the conservative opposition to muster the two-thirds majority in parliament needed to pass the constitutional amendment.

READ ALSO: Putin can’t dictate peace in war he ‘won’t win’ says Germany’s Scholz

Since the end of the Cold War, Germany has significantly reduced the military from around 500,000 in 1990 to just 200,000 today.

Fewer than 30 percent of German naval ships were “fully operational” according to a report published December on the state of the military.

Many of the country’s fighter aircraft are unfit to fly.

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GERMANY AND UKRAINE

What a Russian victory in Ukraine would mean for Germany

For German residents, there is reason to fear a Russian victory in Ukraine. A new mass exodus of refugees would create bottlenecks in housing, childcare and schools, among other issues.

Published: 13 June 2024 11:48 CEST
What a Russian victory in Ukraine would mean for Germany

Recent news from Ukraine has been bleak. The surge in missile and drone attacks on Ukrainian power plants over recent weeks has plunged whole districts of the capital into darkness for hours on end.

Kyiv has outlined a five-point strategy to weather the storm, including electricity rationing, urging help from abroad, receiving more air defence systems, and overhauling the grid.

Ukrainian President Volodymyr Zelensky this week said Ukraine needed “quick” and “cost-effective” repair work ahead of winter.

“We need your equipment and financial support to respond now and maintain normal life,” he told a reconstruction conference in Berlin.

While a plan to use frozen Russian assets for war-torn Ukraine dominates G7 talks in Italy on Thursday, there are voices in Germany – especially among the far-right AfD party – that would rather Germany cut off all its support for Ukraine. But these pro-Russian positions, veiled as arguments for peace, tend to ignore how dramatically a Russian victory in Ukraine would shake Germany.

An investigation by Tagesspiegel looked at what exactly a Russian victory would mean for people living in Germany. Here are the main impacts.

Germany would need to dramatically increase military spending

Andreas Schwarz, the SPD budgeter responsible for the defence budget has warned that if Ukraine lost the war, Germany would be forced to spend even more money on defence in one fell swoop.

Russia would suddenly be at the NATO border in Europe feeling militarily superior.

German defence expert Roderich Kiesewetter suggests that Germany would run out of ammunition after a few days in the event of a direct war. Kiesewetter has called for at least three percent of Germany’s gross domestic product to be invested in armaments.

Germany has made efforts to up its defence spending recently, but it is still unclear if the country will maintain a two percent GDP target for defence spending going forward.

But a sense of urgent need to ramp up Germany’s military defences does seem to be growing. On Wednesday Defence Minister Boris Pistorius announced a plan to bring back conscription to the armed forces.

Recently, former British Armed Forces Minister James Heappey estimated that a Ukrainian defeat would cost the West collectively trillions of dollars.

READ ALSO: Is Germany gearing up to reintroduce compulsory military service?

Pistorius with members of the army

Ukrainian President Volodymyr Zelensky (centre left) and German Defence Minister Boris Pistorius (centre right) stand with Ukrainian and German soldiers during a visit to a military training area in Mecklenburg-Vorpommern, north-eastern Germany, on June 11, 2024. Photo by Jens Büttner / POOL / AFP

Higher prices

Ukraine is one of the largest agricultural exporters in the world and also has stocks of rare earths and critical minerals.

A Russian takeover of the country would likely spell massive price fluctuations for goods like Ukrainian grain – which would spell increased grocery prices in Germany as a start, according to many economic projections.

More war refugees in Europe

Migration researcher Gerald Knaus told the Tagesspiegel that a Russian victory in Ukraine could “turn another ten million people into refugees”.

In parts of eastern Ukraine, such as the metropolis of Kharkiv, Russia has been wearing down peoples’ will to stay with near constant bombardment. 

Hundreds of thousands of people living there regularly go without electricity due to destroyed substations and infrastructure. Kharkiv alone is home to 1.3 million, including 200,000 internally displaced persons.

According to Eurostat, since the beginning of the war, 4.3 million Ukrainians have fled to neighbouring European countries. At 1.27 million, Germany has taken in the majority.

READ ALSO: Two years later, two Berlin residents from Ukraine on how war affects their lives

Germany’s interior ministries don’t expect tensions to ease soon. The Federal Office for Migration (BAMF) continues its efforts to distribute refugees across the country, but there is no doubt that in many places resources are running thin.

Helmut Dedy, Chief Executive of the Association of German Cities has called on federal and state governments to provide more facilities.

Increased pressure on the welfare system

Many refugees from Ukraine, and indeed many refugees broadly, are dependent on state benefits for some period of time after arriving in Germany.

As of January the employment rate among refugees from Ukraine was around 25 percent. In December of last year 710,000 Ukrainians received citizen’s allowance.

Refugees are obliged to apply for a work permit in Germany before they can join the workforce. Additionally they face a language barrier, and many of their professional qualifications may not be immediately recognised.

School and day care spots running thin

Since the outbreak of Russia’s invasion of Ukraine, nearly 220,000 children and young people who have fled the country have enrolled in German educational institutions.

So far German states have managed to handle the situation relatively quietly, but there is reason to believe that further stress on the system would be more than it can take.

A Ukrainian student in a German classroom

A name badge with an Ukrainian name seen in an international class at the Max-Ernst comprehensive school (Gesamtschule) in Cologne. (Photo by Ina FASSBENDER / AFP)

The president of the North Rhine-Westphalian Teachers’ Association suggests that the region he represents is already at its limit.

The German Association of Cities and Towns and the Association of Towns and Municipalities (DStGB) have also identified a shortage of school and day care places, as well as shortages of language courses and staff for integration services.

Germany’s educational system has already shown signs of stress – in the form of teachers’ strikes and school dropouts – before an additional influx of students are added into the mix.

Exacerbating the housing shortage

In response to the initial wave of incoming Ukrainian refugees, a section of the Building Code was enacted which allowed for the construction of new refugee accommodation without a development plan.

In some places, especially in parts of eastern Germany with growing vacancies, the influx of Ukrainians actually helped to stabilise the housing market.

But in cities where a severe shortage of housing has already been growing for years, there is no doubt that any number of incoming residents only adds stress.

Such is not only the case in popular cities like Berlin, Hamburg or Munich. In Mecklenburg-Western Pomerania, for example, the local Ministry of the Interior sees municipalities facing a major challenge in providing housing.

READ ALSO: ‘Tense housing situation’: Why a Berlin renter can’t be evicted for two years

German defence expert Roderich Kiesewetter emphasises that the aforementioned impacts on German life are not yet a foregone conclusion. He told Tagesspiegel that Ukraine could still defend itself and restore its 1991 borders according to international law, “But only if we support them accordingly and stop setting red lines for Ukraine and us”.

With reporting by AFP.

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