NATO Secretary General Jens Stoltenberg has repeatedly said he expects the United States to put pressure on other NATO members to contribute more to defence
During the Trump administration, the White House actively pressured Germany to increase its military spending. Even as Germany reported record NATO defence spending in 2021-with a budget of €53bn ($63.8bn), up 3.2 percent from the previous year, when spending was capped at around €51.4bn-a new report by research firm Global Data finds that budget growth is set to slow next year.
As a result of the coronavirus pandemic, Germany could see a negative compound annual growth rate (CAGR) of -0.04 per cent by 2026. How the Biden administration, which may or may not still be in the White House by then, as well as other NATO members, will feel is unclear. Nevertheless, global data have warned that Germany’s reduced defence spending could add to the ongoing bad feeling on the part of some members, especially as Germany has the fourth largest economy in the world with a gross domestic product (GDP) that is ten times the size of NATO member state Estonia.
Increased pressure on Germany
Although President Joe Biden has pledged to strengthen ties with NATO, unlike his predecessor, NATO Secretary General Jens Stoltenberg has repeatedly said he expects the United States to put pressure on other NATO members to contribute more to defence.
“All US presidents over the past decades have advocated increased defence spending by European NATO partners”, – Stoltenberg told German news agency dpa International per Deutsche Welle (DW).
Biden’s stance was not as strong as that of former President Donald Trump, who even suggested that the United States could withdraw from the alliance if partner countries could not immediately meet the goal of spending two per cent of their GDP on defence.
Germany’s defence spending in 2020 was in line with NATO’s calculations and stood at 1.57 per cent of GDP, up from 1.36 per cent the previous year.
DW also reported that an internal analysis for 2022 showed that the goal of Germany reaching the two per cent mark probably cannot be initiated or realised in time within the current budget. A study based on global data painted an even bleaker picture.
According to the “German Defence Market Attractiveness, Competitive Landscape and Forecast to 2026”, which was published this month, German defence spending in 2026 will rise only slightly to $58 billion from the current $57.5 billion this year
Fighting the coronavirus
Germany’s biggest threat was not an external adversary, like many other countries, it was particularly hard hit by the coronavirus, which has affected its economy and its ability to support various government programmes.
“The decline in growth in 2021 is not surprising given the domestic political arena and the financial impact of COVID-19”, – explained Madeleine Wild, junior military analyst at GlobalData.
“Germany’s economy will shrink by 1.65% in 2020, according to GlobalData research”, – she added in an email to National Interest. – “In addition, Germany is under slow economic pressure and public funds are being stretched beyond the funds shown in previous years. Slow growth, levels remain evident despite pressure from NATO (including Secretary General Jens Stoltenberg) forcing Germany to increase spending.”
The situation has been further exacerbated by overspending on the overall budget.
“However, other NATO members such as France are increasing their defence spending despite the intense financial impact of COVID-19, and there could be some ill feelings towards Germany in this way: it is one of the richest countries in Europe but consistently fails to cover its 2% of GDP for defence spending”, – Wild said.
“The problems with the Bundesamt für Ausrüstung, Informationstechnik und Nutzung der Bundeswehr, which oversees defence procurement, are widely reported and deeply rooted. The department has been described as inefficient and overly bureaucratic, which has meant that up to 10% of the procurement budget could not be spent for several years. This was largely due to a shortage of trained staff, leading to delays and bottlenecks in funds.”
Although the coronavirus has had an impact on spending, Germany’s modernisation efforts may require a loosening of the purse strings in the next decade.
“German defence spending is driven by the need to modernise the Bundeswehr’s ageing fleet in line with its allies for successful and coherent NATO operations”, – Wilde said. – “Several significant contracts have been signed to accelerate the modernisation process, including funding for the European Future Air Combat System (FCAS), the purchase of more than a thousand PUMA BMPs, additional A400M Atlas aircraft and investment in the Eurofighter Typhoon fleet modernisation. Despite this, spending levels are still not high enough to appease other NATO members who are pushing Germany to spend 2 percent of its GDP on defence.”
Peter Suchu, The National Interest, USA