The German Parliament passed an amendment on March 18 to loosen enduring restraints on federal defence spending, offering the prospect of increasing military expenditure for Europe’s largest economy.
This change – which relaxes protocols on some areas of federal expenditure – will allow defence and certain security budgets to increase beyond the confines set by the country’s restrictions on budget deficits, also known as the ‘debt brake’.
Moreover, the amendment allows for the creation of a special fund of €500bn ($547bn) for “additional investments in infrastructure and for additional investments to achieve climate neutrality by 2045.”
A two-thirds majority of all members was required for the draft to be passed; 512 members voted in favour of the change while 206 voted against the amendment.
The decision represents a considerable victory for the Christian Democratic Union leader, and future German Chancellor, Friedrich Merz, as he hopes to establish a stronger defence footing.
“The threat situation takes precedence over the financial situation,” argued Germany’s Defence Minister Boris Pistorius. “Anyone who hesitates today, who lacks the courage today, who thinks we can afford this debate for months to come, is denying reality.”
Securing military logistics
It is worth noting that the spending reform serves more than just defence, but wider investments in dual-use infrastructure, including climate neutrality.
Through this lens, it appears that Germany’s principal preoccupation is securing military logistics.
In February 2024, the Netherlands, Germany, and Poland agreed to establish a military corridor across their respective territories. While this may be a given to some, the endeavour will prove a monumental task given bureaucratic challenges and, more importantly, technical standards for infrastructure across European countries.
The European Court of Auditors (ECA) have prioritised military mobility, stating that “tanks from one EU country cannot move through another if they are heavier than road traffic regulations allow.”
Under normal circumstances the ECA stated that an EU country currently requires 45 days’ notification of cross-border movement authorisations.
Merz eyes new military equipment
“Now we have to rebuild our defence capabilities, in part from scratch,” Merz emphasised.
This requires modern technologies, from satellite surveillance to uncrewed autonomous systems.
Germany and Europe must plan the necessary upgrades in a coordinated manner, “especially with reliable and predictable contracts that should – whenever possible – go to European defence companies. This is the paradigm shift that awaits us.”
In a similar spirit, Eric Béranger, the CEO of Europe’s leading missile manufacturer MBDA, made clear the need for Europe to cultivate a more independent defence industry in a speech in Paris on 17 March.
MBDA is set to benefit from the delivery of complex weapon systems as the only European defence group able to offer truly sovereign capabilities at a time when the United States, Europe’s lifeline for defence, is pulling its long-time security guarantees.
In particular, the group’s German entity has been on track in creating a continent-wide “missile hub”, according to company officials a few years ago.
