NATO's two percent target: Pistorius' costly rate

A big chunk of money, that's what it says at the end of the bill that Boris Pistorius has now opened.

NATO's two percent target: Pistorius' costly rate

A big chunk of money, that's what it says at the end of the bill that Boris Pistorius has now opened. The Federal Minister of Defense would like to take a lot more of this into his own hands, not least to get the Bundeswehr back into shape, but also to achieve a goal that was set in 2014: the two percent target of NATO.

For Germany, this would mean additional expenditure in the tens of billions, so far less than two percent of gross domestic product (GDP) is invested in defense every year. For 2022, the expenditure was estimated at 55.6 billion euros (1.44 percent), 77 billion euros could be necessary for the two percent target, based on the latest GDP figures from the Federal Statistical Office.

And that should only be the lower limit, according to Pistorius.

"Just wanting to approach the two percent target will not be enough," he said on Wednesday morning at the sidelines of a meeting of NATO defense ministers in Brussels. "That must be the basis for everything else." Is this the effusive push of an over-motivated Secretary of Defense? More of a preventive commitment: Pistorius is thus expressing the kind of ambition that could soon be expected from the federal government and other alliance partners anyway.

In 2014, after Russia's illegal annexation of Crimea, the states still below the two percent "guideline" agreed to "move towards it within ten years" in order to meet their NATO capability goals and NATO capability gaps close". That point would be reached in 2024. And then? Then that "guide value" could become the minimum mandatory value.

Talks are already underway in NATO about defining the previous goal as the lower limit and anything beyond that as desirable. NATO Secretary General Jens Stoltenberg said at the final conference on Wednesday that it was obvious "that we have to spend more" and that spending of two percent of GDP should be the minimum. An agreement was not reached, but should be reached at the latest at the next regular NATO summit on July 11 and 12 in Lithuania's capital, Vilnius.

Pistorius has now made it clear that Germany wants to go along with it. However, it remains unclear when Germany could pass the two percent target. "The Chancellor, SPD leader Lars Klingbeil and I agree that we have to reach the two percent target. At least," emphasized Pistorius now in the "Spiegel". "Actually, it can only be the basis, and everyone has long agreed on that. How far we can go beyond that and when we will achieve that is another matter."

According to Pistorius, an increase in the current defense budget is necessary in order to achieve the goal, but also to cover current and future costs. At Federal Finance Minister Christian Lindner (FDP), his officials are said to have announced an increase of ten billion euros a year in initial budget talks, regardless of the special fund of 100 billion euros that has already been decided (which Pistorius does not consider sufficient anyway). His budget would thus increase to around 60 billion euros.

It remains to be seen whether Pistorius will be granted such a significant premium. After years of crisis budgets and relief packages, the funds are again scarce, but the spending requests of the specialist departments are still great: According to the "Handelsblatt", the federal ministries want to spend 70 billion euros more in the coming year. In mid-March, the federal cabinet intends to make a decision on the cornerstones of the new federal budget. A remarkable exchange of letters between Vice Chancellor Robert Habeck (Greens) and Federal Finance Minister Christian Lindner (FDP) is already pointing to fierce distribution battles.

In any case, the multi-billion dollar increase in defense spending still needs to be discussed, Pistorius also concedes. "That will still have to be agreed in the coalition," he said on Friday, before the start of the Munich Security Conference, upon his arrival at the conference hotel. "But it must be clear to everyone: the tasks that lie ahead of us will not be able to be fulfilled with just under two percent." He led alliance and national defense as well as international missions. "All this will cost money and we all agree: each of us would rather spend more money on other things. But the reality is what it is."

Pistorius definitely gets support for his plans – but also headwind. "The minister has our support. We will have to increase the defense budget in the long term," said Marie-Agnes Strack-Zimmermann, chairwoman of the defense committee, to the star. "But first of all he should now ensure that the special fund is invested specifically and quickly," warned the FDP politician. In fact, only a fraction of the 100 billion euros has been spent so far.

The CDU also agrees with the defense minister's demand. The two percent target is "outdated" and can "only be a lower limit," said foreign policy expert and retired Colonel Roderich Kiesewetter, who, in addition to financial resources, also insisted on efficiency in procurement. Pistorius' party colleague Ralf Stegner, on the other hand, was more skeptical. He told the "Rheinische Post" that the Bundestag would discuss this openly, but at the same time referred to the special fund that had already been decided and "other important challenges such as the climate-neutral conversion of industry, social cohesion and future investments", which also played a major role . The left vehemently rejects additional spending: co-boss Mohamed Ali told the newspaper that the two percent target is "part of an irresponsible armament policy".

In any case, the special fund of 100 billion euros alone should not be enough to meet the NATO requirement. According to a study by the German Economic Institute (IW), Germany will probably not reach the two percent target until 2024 and 2025 - i.e. when expenditure from the special fund has an impact. From 2026, Germany would probably be below two percent again if the regular defense budget does not increase "by at least five percent" per year.

Pistorius obviously doesn't want to let it get that far - and gets support from the most important member of the government. "Germany will permanently increase its defense spending to two percent of the gross domestic product," affirmed Federal Chancellor Olaf Scholz (SPD) in his speech at the security conference in Munich. The Chancellor did not comment on the discussion about raising this threshold above the two percent mark. But Germany is "putting an end to the neglect of the Bundeswehr," Scholz assured, with the special fund "the foundation for this having been laid". Pistorius should also like to hear that.