For decades, Germany missed NATO's 2% target on defense spending. In 2024, it hit that target. How is Germany spending its €100 billion special defense fund?

Berlin

Germany has achieved a significant milestone in its defense spending, meeting NATO's target by allocating 2% of its GDP towards defense in 2024. This comes after years of falling short of the guideline. The country has initiated a comprehensive military modernization plan, marking a strategic shift in its defense policy.

The Bundeswehr, Germany's armed forces, is in the process of upgrading its equipment with a special focus on its air transport group. A notable part of this modernization is the procurement of about 60 new Chinook heavy-lift helicopters at a cost of 7 billion euros, scheduled for delivery in 2027. These helicopters, which offer advanced technology and significantly greater transport capacity than the older Sikorsky models, represent a leap forward for the Bundeswehr into modern military capabilities. In preparation, German pilots are currently training on Dutch Chinooks.

As part of the upgrades, a substantial investment is being made in infrastructure at an airbase south of Berlin, transforming it into a key military hub in Europe. The installation of state-of-the-art, Israeli-built aerial defense systems at a cost of 4 billion euros and the expansion of the runway to accommodate NATO aircraft are among the enhancements. This base is poised to become one of NATO's largest helicopter bases outside the United States.

These developments are funded by a one-off 100 billion euro military modernization fund established by Germany following Russia's invasion of Ukraine. With this fund, Germany aims to address the long-standing issue of inadequate defense spending. However, sustaining the 2% GDP target post-2024 will require the government to allocate an additional 30 billion euros annually to defense, sparking debates on the financial sustainability of such spending.

The increased focus on defense and the Bundeswehr's needs appears to be resonating with the German public, potentially driven by the heightened awareness of security concerns in recent times. This shift in perspective may play a crucial role in securing future funding for the Bundeswehr, although the long-term commitment of the government to maintaining elevated defense budgets remains uncertain.



Germany's grand military modernization

For the pilots of the Bundeswehr's air transport group, this is a big deal. Finally, getting a shot of the Chinook heavy-lift helicopter. This, though, just a training exercise on Dutch machines. The aim is for the Germans to be ready to fly in 2027, when their new Chinooks arrive to replace the decades-old Sikorskis. The new helicopter flies much faster than the old one. It can transport about twice as much as our old helicopters and is equipped with the latest technology. So, of course, it's a big step for us into the future. The price tag for the 60-odd Chinooks is 7 billion euros. New hangars will be built here to house them. And not only that. The state-of-the-art Israeli-built aero-air defense system will also be located here at a cost of 4 billion. And the runway is being widened to allow NATO aircraft to land here. All of that means that this airbase south of Berlin is being turned into one of the most important in Europe. You can really see that we're making history here. You can say that we will be the future home of the Air Force's heavy transport helicopters, making us one of NATO's largest helicopter bases outside the US. It's being paid for out of a one-off 100 billion military modernization fund set up after Russia invaded Ukraine. For decades, Germany has missed NATO's 2% target on defense spending. In 2024, it hit that target. Now the question is what happens once the special fund runs out. To keep hitting the 2% target, the government will have to spend an extra 30 billion euros every year on defense. That's ignited a debate about how to pay for it all. I think the topic of security and defense is being discussed much more seriously among the population than it was a few years ago. I notice this myself regularly at different events, that people have a much greater understanding of the Bundeswehr's needs. Such sentiments may reflect a growing shift in attitudes towards the Bundeswehr. Whether it will translate into a long-term funding boost is very much up in the air.

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