Berlin Cable

Mar 24, 2023

Boris Pistorius’ Budget Battle

Germany’s new defense minister has not set a foot wrong since taking over from Christine Lambrecht in January. However, it is the outcome of the current fight over the defense budget that will likely define his time in office.

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German Defense minister Boris Pistorius looks on as he visits Leopard II tanks that are due to be supplied to Ukraine at the tank brigade Lipperland of Germany's army and part of the Bundeswehr, in Augustdorf, Germany, February 1, 2023.
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There are government ministers who are seen as such a good fit for their office that one instantly assumes they’ve always been there. A case in point is Germany’s new Defense Minister Boris Pistorius of the Social Democrats (SPD) who took over in late January after his hapless predecessor, Christine Lambrecht, threw in the towel following what many in Berlin consider a lost year for Germany’s armed forces.

Since then, Pistorius has been everywhere: visiting the troops of Germany’s army, navy, and air force, showing that he is good with people and indeed soldiers (he is one of the few recent German defense ministers who did basic training when military service was still compulsory, in the early 1980s; Pistorius’ three most recent predecessors were women who would not have been required to do military service, as it was confined to men until 2011). Keen to learn and to find out things for himself, Pistorius often chooses the right words to give a frustrated force hope that things will now change for the better—finally.

It took Russia’s war of aggression against Ukraine for Germany to muster the will to change. Now Pistorius is supposed to be the person to make it happen. His first foreign visit took him to Kyiv for talks with President Volodymyr Zelensky and Pistorius’ Ukrainian counterpart, Oleksii Reznikov, who he presented with a toy-sized Leopard tank. (Real ones will arrive in Ukraine this spring, a decision Chancellor Olaf Scholz confirmed days after Pistorius took office.) At the Munich Security Conference, he openly stated that “Ukraine must win,” something Scholz has avoided saying (he prefers to say that Ukraine “mustn’t lose and Russia mustn’t win.”)

In early March Pistorius, a former mayor of Osnabrück and regional interior minister in the state government of Lower Saxony, even took part in an exercise called EXGriffinLighting in Lithuania, where 600 Lithuanian and German soldiers, the latter part of a promised German brigade to defend the Baltic country from neighboring Russia, trained together in deep snow. The pictures, in which the 63-year-old minister sports a vaguely Rambo-like headgear, made many German newspapers, including the center-left daily Süddeutsche Zeitung, which chose the slightly tongue-in-cheek headline “Das fängt ja gut an” (“This is starting well”).

A Herculean Task

Pistorius is certainly no action man, but rather, many hope, a man of action who will finally tackle in earnest what is a truly Herculean task: making Germany’s armed forces, the Bundeswehr, fit for purpose again. After decades of underspending, there is seemingly nothing that Germany’s armed forces aren’t short of, from munitions in numbers prescribed by NATO to fully functioning fighting vehicles to up-to-date communications equipment (reportedly, in exercises, tank commanders currently open the hatch and shout orders).

Is Pistorius the man of the hour? Even some in Germany’s opposition are impressed. “He has a heart for the troops and communicates well,” says Roderich Kiesewetter, an MP from the center-right Christian Democrats (CDU), who is a colonel (retired) in the German Bundeswehr and a military and foreign affairs expert. But Kiesewetter, who is currently deputy head of the parliamentary oversight panel for Germany’s secret services, points to some weaknesses, too. “So far he hasn’t emancipated himself sufficiently from the chancellor,” Kiesewetter says. “Has he Scholz’ full support? And will Germany now meet the NATO spending goal of 2 percent of GDP? These will be important benchmarks.”

Time and Money

The hour of truth is approaching quickly. The €100 billion “special fund,” which Scholz announced three days after Russia’s attack, is still largely unspent. Another way of saying this is that “not a single cent of the special fund has reached our soldiers in 2022”—as Eva Högl, the Parliamentary Commissioner for the Armed Forces of the German Bundestag, put it when presenting her most recent, and yet again devastating annual report, commonly known as the “Wehrbericht,” on the desolate state of Germany’s armed forces on March 14.

“It’s clear that it takes time to get contracts and orders in place, and Pistorius’ predecessor has done more on that than she has been getting credit for,” Högl says. “What I wanted to express was this great impatience that you find across the Bundeswehr. Many procedures are still followed as if we were living in peace time. Things are taking too long.”

But it’s not only about the time it takes to spend money, it’s also about money itself. The special fund’s purchasing power has already been reduced to €86 billion by inflation and rising interest rates. Security experts think Germany actually needs around an extra €300 billion to come closer to the aim Scholz has formulated for the Bundeswehr—“becoming the guarantor of European security that our allies expect us to be,” he wrote in the January/February issue of Foreign Affairs.

In 2023, however, according to current planning, only €8.4 billion of the fund will be spent in addition to the approximately €50.1 billion regular defense budget—another clear miss of the 2 percent goal. For 2024 and beyond, more “special fund” money will top up the regular budget, but Pistorius has asked for an extra €10 billion for the regular budget for 2024. The aim is to build in a dynamic that will lead to a regular defense budget of around €80 billion (i.e., meeting the 2 percent goal) once the special fund money is spent.

Finance Minister Christian Lindner of the pro-business Free Democrats (FDP) is sympathetic but insists that cuts will have to be made elsewhere. And this will be extraordinarily hard. The constitutionally enshrined “debt brake,” limiting Germany’s new borrowing to 0.35 percent of GDP, is back in place after being suspended to tackle the energy crisis, while ministers have approached Lindner with extra spending requests of a combined €70 billion. Lindner has postponed indefinitely the publication of key points for the 2024 budget, originally expected for late March, and the fight between the three parties that form the government is on. Some, like Saskia Esken, the left-leaning co-chair of the SPD, have already openly questioned whether Pistorius’ defense ministry really needs all that money.

A New Dynamic

But without the “dynamic” a later jump in spending would be even harder to achieve. It would also be a strong, much-needed signal to allies that Germany is serious and will honor the chancellor’s many assurances to meet the  2 percent goal without any ifs or buts—most importantly vis-à-vis Washington, but also to NATO allies in Central and Eastern Europe.

Insiders are confident that 95 percent of the SPD, Green, and FDP MPs are on board. It would boost Pistorius, who has started to make some changes: Germany’s top solider, the “Generalinspekteur der Bundeswehr,” is now Army General Carsten Breuer, a logistics expert who headed Scholz’ COVID-19 taskforce in the chancellery in early 2022. Pistorius also seems intent on better interlinking the forces and the ministry, opening more direct channels, and getting expertise directly from the commanders. While a return of a permanent planning staff is perhaps less likely, a new unit that would improve controlling is also on the cards, as are further measures to speed up procurement. Taking part in the recent German-Japanese government consultations in Tokyo, he also signaled that the Bundeswehr’s engagement in the Indo-Pacific would continue and possibly expand.

Those who know Pistorius predict that reforms will come step by step. They will need to be big steps nonetheless. And victory in the current budget battle would put just the extra wind into Pistorius’ and the Bundeswehr’s sails that is so badly needed.

Henning Hoff is Executive Editor of INTERNATIONALE POLITIK QUARTERLY.

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