German Defence Ministry faces shortfall of €6 billion

German Minister of Defence, Boris Pistorius is pictured during an interview with the German Press Agency (DPA) on November 04, 2024 in Berlin | Photo: Carsten Koall//dpa

Berlin (dpa) – German Defence Minister Boris Pistorius has warned that a shortfall in funding for 2025 could leave the country’s military critically underfunded.

Pistorius told dpa on Tuesday that the German military, or Bundeswehr, needs around €58 billion ($63 billion) in 2025 to quickly close capability gaps. “As things stand, we will be allocated around €52 billion”, he said. “That means we will be short of almost €6 billion next year,” the minister added.

Speaking amid tense negotiations between Germany’s coalition partners over the country’s budget, Pistorius called on the government to face up to its responsibilities and agree on sufficient funding for the country’s defence capabilities. The minister said he understands that the range of tasks facing the government is exceptionally large.

“However, I have the feeling that some of the players are not aware of the seriousness of the situation or that they believe they can overcome these really big challenges with tactical games,” he said.

Due to the funding gap, around 100 Bundeswehr projects cannot be carried out and the procurement of equipment is to be postponed, he said. According to the minister, this affects the next instalment of the Puma Infantry Fighting Vehicle, urgently needed ammunition and the development of long-range precision weapons. Pistorius said that thanks to a special fund of €100 billion for the Bundeswehr, “an unusually large number of projects have been launched unusually quickly.” However, after 30 years of neglect, the Bundeswehr‘s equipment is still far from complete, he said.

“We are now at a crucial point,” he added, warning that military gaps were widening again despite threats increasing. “History is looking over our shoulders, so to speak,” he said, adding that the current defence threats should not be played down.

Pistorius said that while conducting disinformation campaigns, cyberattacks and spying on critical infrastructure, Russia was rearming and would soon have around 1.5 million troops. Moscow has moved to a war economy and is investing at least 6% in armaments and defence, the minister added.

“Russian industry produces more weapons and ammunition in three months than the entire European Union does in a year. And we have to expect that Putin is willing and ready to use his armed forces … That is the reality we are facing,” Pistorius said.

Germany’s ifo Institute: 2% of GDP for defence is not enough

On Thursday, dpa reported from Munich that 2% of GDP for defence is not enough according to Germany’s ifo Institute.

European countries must allocate more than 2% of their gross domestic product (GDP) for defence, according to calculations by Germany’s influential ifo Institute, in order to be capable of self-defence without the protective shield of the U.S.

The backlog in defence spending is enormous, ifo researcher Florian Dorn said on Thursday. “As Germany has consistently missed NATO’s 2% target over the last three decades, there is now a gap of around €230 billion ($247 billion) in necessary defence investments.”

In Italy, the gap amounts to €120 billion, and in Spain, it exceeds €80 billion, he said. Of the European NATO states, only Poland and the United Kingdom have spent more than 2% of their GDP on defence annually since 1990.

Following Donald Trump’s election victory in the United States, European states must significantly increase their efforts, Dorn asserted.

In global comparison, Europeans have to generally spend more money, he said: “The wages for soldiers and the costs for military equipment are, for example, significantly lower in Russia or China than in Western European countries.

“Consequently, Russia can afford more for the same amount compared to Western states with higher wage and price levels,” said Dorn.

The extent to which expenditure must rise also depends on whether the existing resources in Europe can be used more effectively through joint structures, he added.