Editor’s Note: One of the most surprising ways that Russia’s invasion of Ukraine has transformed Europe is Germany’s sudden willingness to rapidly improve its military. Jonathan D. Caverley of the Naval War College and Lucas F. Hellemeier at Freie Universität Berlin explain that while this is an important shift in Berlin’s approach to security, Germany will take years, even decades, to become a major military power.
Chancellor Olaf Scholz had not been in office for 100 days when he gave one of the most remarkable speeches in the history of reunited Germany on Feb. 27. In front of a Bundestag convened out-of-schedule to respond to the Russian invasion of Ukraine, Scholz announced extraordinary defense expenditures in the form of a nearly $110 billion special fund and a commitment to surpass NATO’s spending target of 2 percent of gross domestic product (GDP) going forward. He coined the term “Zeitenwende” (roughly translated as “turn of an era” or perhaps “watershed”) to describe a paradigmatic shift in German security policy initiated by Russia’s aggression. The boldest specific policy was the sudden announcement that Germany would buy Lockheed Martin F-35s immediately to replace its aging fleet of Tornado nuclear-capable bombers. Scholz also announced German support for harsh sanctions on Russia and arms deliveries to Ukraine, which Germany had blocked before. The speech reverberated around the world, with the United States and other Western allies—long impatient with a German foreign policy perceived as committed to facilitating business and leaving geopolitics aside—welcoming it as a long-hoped-for shift. Not surprisingly, investors also noticed, piling into defense and aerospace stocks the following day. Commentators rapturously identified the speech as “Germany’s geopolitical awakening” and declared that Russia had woken “a Sleeping Giant.”
While the language used by Scholz and other German officials represents a remarkable change, German rearmament, even in response to such a shock as the Ukrainian invasion, faces serious challenges. The German approach to international politics, developed painstakingly over decades, is unlikely to pivot instantaneously. And even if it does, the materiel needed to support such a turnaround will take many years to acquire. The U.S. government, and U.S. defense firms, should not count on too big a defense windfall. Then again, the U.S. Defense Department has recently rediscovered the importance of nonmilitary tools and allies in its concept of “integrated deterrence,” and letting Germany be Germany is certainly more realistic and probably more useful.
German Defense Policy Cannot Change Overnight
First, the impact of this new money shouldn’t be exaggerated. Germany will still appear significantly underinvested compared to its European peers, the United Kingdom and France. Between 2005 and 2020, Germany’s spending on defense investments—equipment and research and development—has been only a little more than a third of France’s and half of the United Kingdom’s. Christian Mölling and Torben Schütz point out that if the special fund proposed by Scholz is to be used to boost Germany’s regular defense expenditure (currently about 1.5 percent of GDP) to meet NATO’s spending target of 2 percent of GDP, it will be depleted in five years. This is too short a time span for crucial defense equipment investments, especially research and development, which require long-term planning and financial commitment over at least a decade or longer. Furthermore, a five-year financial booster will hardly compensate for 30 years of underinvestment, which has left the Bundeswehr “bare” as the chief of the German Army pointed out in a much-read LinkedIn post on Feb. 24. As a case in point, Germany will need to spend more than $20 billion alone to meet NATO requirements for ammunition.
The short-term influx of money to support long-term military projects will be impeded further by a bureaucracy ill-equipped to handle its current resources. The Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support, the German military’s procurement agency, has been described by Georg Löfflmann, professor of war studies at the University of Warwick, as “a bureaucratic monstrosity responsible for a dysfunctional process that has delivered major weapon systems years too late, with significant cost overruns and capability gaps.” Impatience with bureaucratic reform has led analysts to call for a differently structured procurement agency dedicated solely to the new special fund. Whether such a parallel agency would remedy the issues is an open question, but it would not be able to get up to speed overnight.
German Foreign Policy Will Not, and Probably Should Not, Change Overnight
Besides the budgetary loopholes and the poor performance of the German government when it comes to defense procurement, other outside factors will make sustaining the high levels of German defense expenditure unlikely. As many observers point out, Russia’s armed forces are fighting a war of attrition that has resulted in enormous losses in equipment and personnel. Russia’s ability to rebuild its conventional military will be hindered by a reeling economy, and multilateral sanctions will ensure the Russian defense base will lack many vital components for a generation. In short, the Russian conventional threat to NATO countries—given both revealed capabilities and losses from a grinding campaign—is lower than ever.
Going forward, the primary Russian military threat to Western and Central Europe will be its large and diverse nuclear arsenal, which will likely play an even more central role in Russian security policy following its conventional losses. The F-35 purchase was a highly visible nuclear signal by Germany to Russia (and its NATO allies). Germany’s committing to NATO’s nuclear sharing is significant given previous reluctance by Social Democrats and the governing coalition’s statement that it would “observe” the Treaty on the Prohibition of Nuclear Weapons.
Despite the collapse of Russia’s conventional forces, other threats remain. Germany’s continued energy dependence remains its primary vulnerability to Russian coercion. Germany has already taken real steps, from canceling the Nordstream 2 pipeline to funding new liquid natural gas terminals. Weaning itself will be another enormously expensive task, but one that is essential for German and NATO security.
German aid in the war’s aftermath will be both essential and expensive. The economic damage in Eastern Europe, and indeed around the world, caused by this conflict is already immense. As of March 10, the Ukrainian government estimated that Russian forces had destroyed $100 billion worth of infrastructure, and Russia’s indiscrimate bombing and shelling has increased this figure since then. Additionally, the U.N. High Commissioner for Refugees has reported that 4 million Ukrainian refugees have fled the country, and almost 300,000 have already arrived in Germany. Berlin and its main train station have seen an influx of refugees coming by train from Poland, and civil society’s dedication to them has been remarkable, from immediate support in the form of food and clothing to housing and mental health support. German authorities have now established two additional railway hubs dedicated to registering Ukrainian refugees in order to ease the situation at Berlin Central. As Europe’s largest economy, Germany will need to follow up on these actions to alleviate the humanitarian burden after the conflict subsides by taking on a leading role in postwar reconstruction.
This could be complicated by the German economy. Rising energy prices will dampen economic recovery after the coronavirus pandemic, raising the possibility of stagflation. Given Europe’s integrated economy, Germany and other European countries are experiencing the war’s repercussions not only through rising energy prices but also through supply chain problems. For example, Germany’s transport sector depends heavily on truck drivers from Ukraine. Volkswagen had to suspend production temporarily because of supply shortages stemming from the war. If, as is widely expected, the economy shifts into recession, it seems unlikely that a German government would turn to some form of military Keynesianism to offset a slump in demand. The last time Germany reacted to a recession by increasing military spending was under the Nazi regime. More recent German stimulus packages have focused on private consumption, for example, through premiums for buying supposedly eco-friendly cars as well as some infrastructure investments. Improving German roads and railways, while not specifically for defense, would at least improve European security by enabling military mobility through Germany.
The United States’s European Defense Dilemma Will Not Go Away
Even if Germany budgets and spends the special fund efficiently, the U.S. defense industry should not get too excited. For some crucial, sophisticated defense investments—like long-range air defense systems and heavy-lift helicopters—Germany needs the United States as a partner. But the F-35 does not represent a major turn toward the United States, as it simply replaces the previous American front-runner (Boeing’s F-18) for the nuclear mission, and indeed Germany now plans to use Eurofighters for electronic warfare instead of Boeing’s EA-18G Growlers.
Since the creation of NATO, the United States has tried to prod both higher European defense spending and increased European dependence on American weaponry in the name of interoperability (and U.S. defense exports). The Biden administration and its successors will need to walk a calibrated line of encouraging transatlantic defense industrial cooperation while also allowing for defense industrial competition between Europe and the United States. Given Europe’s existing defense industrial capacities, the larger role the European Commission seeks to take in these issues and French aspirations for European strategic autonomy, Europe will want to be able to produce some defense equipment on its own even if it competes with U.S.-made equipment on the world market. For instance, France and Spain just recently signed off on modernizing Airbus’s Tiger attack helicopter, which competes with the U.S.-made Apache; now that Germany is planning to spend more on defense, Paris and Madrid expect it to join the effort. Put simply, when Europe spends more on defense, it will want to buy “its own stuff” instead of procuring U.S. defense equipment, even if U.S. equipment is more efficient on account of the United States’s massive economies of scale and technological edge. Accepting this fact would underwrite a transatlantic relationship shaped by geostrategic cooperation and, at the same time, defense industrial competition.
Integrating Germany Into Integrated Deterrence
The U.S. Defense Department recently transmitted a classified National Defense Strategy to Congress. The unclassified factsheet associated with the strategy states that “integrated deterrence” is the primary means by which the department seeks to accomplish its strategic goals. The concept involves “using every military and non-military tool in our toolbox, in lock-step with our allies and partners” and ensuring that conventional forces operate “backstopped by a safe, secure, and effective nuclear deterrent.”
Long-standing structural, political and cultural forces mean that the United States and NATO allies will likely be disappointed by the level of Germany’s conventional buildup, but as the strategy points out, there exist many, in the strategy’s words, “non-military tool[s] in [the] toolbox.” Letting Germany be Germany would still result in a reiterated commitment to nuclear deterrence, reduced dependence on Russian gas, mitigated Eastern European economic damage, management of a dire crisis of displaced persons, and perhaps a marginally more rationalized European defense industrial base. Rather than leaning on Germany to devote more budget to defense in a recession, which will likely be spent inefficiently, a better policy would be to discourage the traditional neo-mercantilist policy of creating export surpluses and promoting austerity in Europe and, instead, focus on energy diversity and rebuilding Eastern Europe. This seems to be both “integrated deterrence” and a fair trade. More importantly, it is a realistic one.