The special fund of €100 billion is a statement and symbolic number for the will of German government to transfer Bundeswehr into a capable and empowered armed force again. After more than a decade of cost-cutting, which was named focus on deployment, capability for national and alliance defence is at stake. Shortage within Bundeswehr starts with ammunition and continues from air defence, digitalisation to personal equipment.
For every NATO commitment in recent years, equipment and systems had to be gathered from the entire Bundeswehr so that even these comparatively small contingents could meet NATO’s requirements. Just to name one example, at beginning of the Ukraine war even the last still airworthy maritime reconnaissance aircraft had to go to Italy for NATO commitments instead of monitoring the Baltic Sea.
But the promised sum of 100 billion is apparently more symbolic than real. Already at the DWT symposium “Perspectives of the Defence Economy”, Hubert Blahnik, Deputy Head of the Equipment Department in the German Ministry of Defence, said: “87 billion remain of the 100 billion as a basis.”
This statement referred to the interest to be expected over the term of the special fund. Since the special fund is a loan, fixed interest rates will of course be charged.
So German Member of Parliament Ingo Gädechens asked how German Ministry of Defence plans to save this difference of five billion euros compared to previous budget calculations. Parliamentary State Secretary, Thomas Hitschler, answered on behalf of the MoD: “For the preparation of 2023 economic plan for this Special Fund of the Bundeswehr (SVermBw), an interest burden to be financed from the credit line of the SVermBw was assumed in agreement with the Federal Ministry of Finance with a total amount of seven billion euros. The calculation of the SVermBw’s budgeted interest expenditure methodically follows the budgeting of interest expenditure in the federal budget and is monitored on a monthly basis. If the Federal Ministry of Finance calculates an increase in interest for the 2024 budget based on this methodical interest calculation, this will be taken into account in the update of the 2024 economic plan. There is no need to allocate specific procurement measures to a possible savings requirement at this stage.”
Dorothee Frank, Head of editorial team