By Liu Cheng

Recently, the German government announced a total of USD 73.41 billion defense budget for FY2024. The figure, nearly 30% higher than the previous year, has met the NATO's defense spending threshold of 2% of gross domestic product (GDP) and set the highest record for German defense expenditure. German Defense Minister Boris Pistorius said that German defense spending may exceed NATO's threshold in the future, and the new budget will be used for arsenal construction and reform of the Bundeswehr.

Meeting NATO's defense spending threshold

Germany's total defense budget for FY2023 was USD 56.64 billion, or about 1.57% of the GDP that year. Its defense budget for FY2024 is USD 73.41 billion, which has increased by nearly 30% from the previous year and accounts for about 2% of the GDP. Amid the overall sluggish economic situation, Germany's large increase in defense budget has garnered wide attention from the public.

Pistorius said that the alignment is just the beginning of increasing defense input, and the military budget will be increased to 3% to 3.5% of the GDP, and maintain above 3% in the next three years, depending on the international situation changes and the financial status of Germany.

In addition to defense spending in fields like reform of the Bundeswehr, arsenal construction and overseas military operations, Pistorius also announced a foreign military aid program of up to USD 8.8 billion, which will provide Ukraine with drones, minesweeping vehicles, 155mm artillery shells and firearms of various calibers. Foreign media remarked that the large-scale military aid list will deliver substantial economic gains for German military industry while bolstering regional influence of the country.

Moreover, Germany also plans to expand Ramstein Air Base, NATO's largest air base in Europe, and host NATO military exercises including "Steadfast Noon" and "Air Defender" drills. Starting in 2024, the German Navy will deploy its ships to the Indo-Pacific waters to demonstrate its strength for two consecutive years, and send ships to participate in the Red Sea naval mission of the EU. German Air Force fighter jets will join in Exercise Kakadu and other series of military exercises in countries like Japan, the ROK and Australia. According to foreign media analyses, since the government led by Olaf Scholz proposed the slogan of serving as a pillar of defense in Europe, the German military has become more outward-oriented, and extended its defense tentacles to the Indo-Pacific, especially under the catalysis of the German version of "Indo-Pacific Strategy".

Driving defense transformation

In tandem with the military expansion, Germany is constantly promoting its defense transformation. The German mainstream media believes that a military expenditure reaching and possibly surpassing 2% of the GDP indicates that Germany is abandoning the military restraint concept and preparing for war, while hoping to play a leading role in European defense and even become the hub of NATO in Europe. It is reported that the EU's recent Red Sea naval mission was dominated by Germany.

In addition to significantly increasing its involvement in NATO military operations, Germany also expects to declare its leadership aspiration and responsibilities in Europe and even in NATO with high input. For example, it has actively promoted the European Sky Shield Initiative, invested huge funds in Airbus for joint development of the Eurofighter Typhoon, led the development of the European missile defense system, and cooperated with France, Italy and other countries in research of the next-generation weapon systems. The Federal Ministry of Defense of Germany has also strengthened liaison with the Pentagon, expecting the other side to increase the deployment of tactical nuclear weapons in Germany for enhancing extended deterrence. However, the move was met with protests and opposition from European population and pacifist groups.

Pistorius admitted that under the current situation, Germany's defense transformation is confronted with huge pressures in spite of heavy financial support. According to a survey by the Jesse Kolber Foundation, More than 71% of Germans do not want the country to take on a military leadership role in Europe, and nearly 75% of them object to a more militarized foreign policy.

Backlashing effects

Although Germany makes a big splash in the budget increase and defense transformation, the country will also face the corresponding backlashing impacts subject to the international situation, and domestic economic, political and other factors.

Scholz has frequently acted in concert with the US Biden administration since he took office, and the budget alignment is also seen as a gesture to curry favor with the latter. However, with the approach of the US election, especially Europeans' concerns about Trump's return, Germany's pro-US behaviors may end up in unreciprocated affection. Some German opposition parties criticized the binding of the country to the US chariot as a one-way road, believing that the reckless reliance on the military force will only bring internal troubles.

Germany's fiscal outlook is not promising currently, with a slight economic contraction observed in FY2023. A substantial increase in the defense budget will undoubtedly shrink the funds in healthcare, education and transportation fields, and these livelihood issues may drag down the government's support rate. Without significant improvement in the overall productivity level, the rising military industry stimulated by military expenditure may generate greater influences on the foreign trade of the country.

Furthermore, as a major participant and defeated country in World War II, Germany's increase in military expenditure has also sparked concerns in some European countries. Some French media have condemned the Scholz administration for abandoning pacifism, which will incur serious consequences.