Germany May Raise Below-Average Defense Budget on Russia Threats

Germany may have to lift defense spending to counter future threats by Russia as Europe’s biggest economy faces U.S. pressure to build up its military, an ally of Chancellor Angela Merkel said.

Henning Otte, the parliamentary defense spokesman for Merkel’s Christian Democrats in the lower house, said Germany contributes its fair share to the North Atlantic Treaty Organization in missions such as Afghanistan and Kosovo. While spending levels aren’t the priority now, a worsening threat could prompt a debate on diverting more to defense, he said.

“We can back these capabilities with the current defense budget,” Otte said in an interview in Berlin on June 6. “Should the security situation intensify, then we would have to consider possibly increasing the defense budget.”

German-led budget cutting in response to Europe’s debt crisis is colliding with renewed debate in NATO on military burden-sharing. As the U.S. presses for more spending after Russia seized part of Ukraine, Secretary of Defense Chuck Hagel upbraided allies in the 28-member alliance on June 3 for being “content” with dwindling budgets.

At 1.3 percent of gross domestic product, Germany’s defense spending is lower than the 1.6 percent average among European members of the alliance in 2013. That compares with the U.S.’s 4.4 percent, according to NATO data.

As Russia annexed Crimea from Ukraine in March and the crisis flared into the biggest standoff since the Cold War, lawmakers were drafting Germany’s delayed 2014 budget in Berlin.

Spending Cut

They emerged on June 6 with an agreement to cut defense spending by 400 million euros ($546 million) as part of Merkel’s effort to balance the federal budget, a pledge she made during her re-election campaign last year.

Defense Minister Ursula von der Leyen, Germany’s first woman in the post, unveiled a drive the same week to win career soldiers by making the military, or Bundeswehr, more attractive to families. She signaled she had no plans for lifting defense spending as a portion of GDP, while saying spending could rise in line with economic growth.

“Having a high defense budget isn’t an end in itself, rather it’s how the money is being spent,” von der Leyen told reporters in Berlin on June 4.

Germans have a “very nuanced” view of defense, she said in an interview with Der Spiegel magazine posted on her ministry’s website. “They rightly ask why and on what we’re spending money.”

Delayed Projects

The 2014 cuts mostly reflect deferred outlays after a procurement review ordered by von der Leyen, who faces cost overruns and delivery delays. Projects under consideration in Germany are replacing missile-defense capability by adapting Raytheon Co.’s Patriot system and expanding the NH90 transport-helicopter fleet. Botched projects include last year’s cancellation of the Euro Hawk spy drone.

Von der Leyen has expressed sympathy with U.S. demands on spending, saying that shrinking defense budgets should be brought to a halt. She began her term this year by backing a more active German role in the world, four weeks before the toppling of Moscow-backed President Viktor Yanukovych in the face of pro-Europe protests in Kiev ignited the crisis in Ukraine.

“As a major economy and a country of significant size, we have a strong interest in international peace and stability,” von der Leyen said at the Munich Security Conference in January.

Three weeks later, Ukraine’s Moscow-backed president, Viktor Yanukovych, toppled from power in the face of pro-European protests, starting an escalation that led Russian President Vladimir Putin to seize Crimea and pro-Russian separatists to seize eastern pockets of Ukraine.

“We thought the days were over when borders were redrawn by states outside the context of elections -- by way of force, though influence,” Otte said. “NATO has to react to that.”

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