The new German Defense Minister Boris Pistorius has spoken out in favor of a significantly tighter NATO target for defense spending - supported by Chancellor Olaf Scholz. He shares the view of allies that expenditure of two percent of gross domestic product (GDP) should be the lower limit in future, said the SPD politician on Wednesday at the sidelines of a NATO defense ministers' meeting in Brussels. This is his position, that of the chancellor and that of the SPD party leader Lars Klingbeil.

"Just wanting to approach the two percent target will not be enough," he emphasized. "That must be the basis for everything else."

Pistorius was alluding to NATO's current goal. This envisages that by 2024 all allied countries should approach the benchmark of spending at least two percent of their GDP on defense. Talks are currently being held in NATO about the future goal, which should be completed by the next summit in July. According to diplomats, eastern alliance states such as Poland and Lithuania as well as Great Britain have recently spoken out in favor of agreeing on stricter guidelines in view of Russia's war against Ukraine.

Double-digit billions needed?

For Germany, a tightening of the NATO target as of today would require an increase in defense spending by an amount in the tens of billions. To date, the Federal Republic has spent significantly less than two percent of GDP on defense. According to available public figures, only a rate of 1.44 percent was expected for 2022 - based on defense spending according to the NATO standard of 55.6 billion euros.

On the question of whether his position is the German position for the NATO negotiations, Pistorius said on Wednesday: "We are in the federal government in the vote on this and will certainly conclude it soon." The chairwoman of the Defense Committee in the Bundestag, Marie-Agnes Strack-Zimmermann (FDP), has already announced support. "The minister has our full support," she told the "Rheinische Post" (Thursday).

Should Germany join the camp of those countries in NATO that actively advocate a clear and ambitious goal for defense spending, that would be a clear change of course. According to diplomats, the federal government has so far tried to keep the guidelines as vague as possible. It was argued that the GDP ratio says little about the performance of the armed forces and that NATO targets, for example for military capabilities and compliance with them, are much more important and meaningful. As evidence of this, it is stated that the rate does not fall if a country cuts its defense spending accordingly when economic output falls.

At the expense of development aid?

A possible point of contention within the federal government could be the question of what an increase in defense spending in the tens of billions would mean for other policy areas. The Ministry of Finance recently said that spending at two percent of GDP could make it very difficult to meet the goal for supporting developing countries agreed in the coalition agreement. This envisages spending at least 0.7 percent of gross national income on official development cooperation every year. That was very important to the Greens in particular.

According to a study by the German Economic Institute (IW), the special fund for defense amounting to 100 billion euros that has already been decided should not change the basic problem. According to the calculations, NATO's two percent quota could only be achieved with the money in 2024 and 2025. According to previous financial plans and growth forecasts, the share in GDP could fall back to 1.8 and 1.2 percent in the two following years.

Within NATO, the front runner in terms of the relationship between economic power and defense spending is the USA. According to alliance figures, they were last at a rate of 3.47 percent. With 822 billion US dollars (765 billion euros), Washington recently paid more than twice as much money for defense as all other alliance states combined. For comparison: Great Britain as number one in Europe spent the equivalent of around 61.1 billion euros in 2022. In addition to the USA and Great Britain, only Greece, Poland, Lithuania, Estonia, Latvia, Croatia and Slovakia reached the two percent target.

NATO Secretary General Jens Stoltenberg said on Wednesday in the final press conference of the defense ministers' meeting that it was obvious that more money had to be spent on defense and that spending of two percent of GDP should be the minimum. There was a big war going on in Europe, he explained. Added to this are the continuing threats of terrorism and the security challenges posed by China.