The Traffic Lights Consortium: Agreement on the Private Assets of the Bundeswehr

The ruling coalition and the Federation have agreed on the details of the planned €100 billion special fund for the Bundeswehr. This amount is intended to increase the regular defense budget.

The Traffic Light Consortium between SPD, Greens and the FDP agrees with the Federation on the planned €100 billion special fund for the Bundeswehr. The two sides announced this on Sunday evening after more than three hours of negotiations at the Federal Ministry of Finance in Berlin. The talks ended successfully. Chancellor Olaf Schultz (Social Democratic Party) announced the €1 billion fund three days after the Russian attack on Ukraine.

The funds will be used to increase the regular defense budget by approximately 50 billion euros over several years. Besides the union, the Traffic Lights Alliance has the two-thirds majority required to anchor the debt-financed special fund in the statute.

The goal is to strengthen the German army

The Basic Law should be amended to create a special fund with the aim of strengthening the capabilities of the Alliance and Defense, and a law should be enacted to finance the Bundeswehr and create this special fund, according to a written letter from the Ministry of Finance. Christian Lindner (FDP) has been published. “Together we will ensure that the German army is strengthened with additional investments of 100 billion euros in the coming years,” she added. “The NATO target of 2 percent is achieved on average over several years.”

Immediately and before the parliamentary summer recess, an initiative to accelerate procurement will be launched. The work plan with the specific procurement projects will be determined in accordance with the agreed law. This will be accompanied by an advisory body from the Budget Committee. In addition, the government will present a strategy to enhance security in cyber and information space. “The necessary measures for cybersecurity, civil protection, upgrading and stability of partners are funded from the federal budget.”

After the Special Fund is used, the funds needed to achieve then-viable NATO capacity targets will continue to be made available. “After a claim, repayment also begins within a reasonable time.”

Many questions were open

Scholz’s announcement on February 27 left room for interpretation as to whether 100 billion plus 2% should be applied or both should be offset. Negotiations with the opposition union were necessary because the special fund had to be entrenched in the Basic Law. In this way, it will be possible to obtain loans that go beyond the debt brake. A two-thirds majority is required in the Bundestag and the Bundesrat for a constitutional amendment, which the coalition cannot muster alone.

The careful use of money turned out to be a major sticking point. The Federation wanted to make it clear that private funds would be used only for the Bundeswehr. The Greens wanted $100 billion also to be used to fund cyber defense and support partner countries.

achieve 2% goal

Government factions had previously announced that compliance with the 2% target – unlike the special fund – probably should not be enshrined in the Basic Law. The main reason is that the GDP is not yet known when the budget will be set and the violation of the Basic Law must be avoided. The Federal Statistical Office reports the result of the GDP calculations about 15 days after the end of the year.

“We will not reach the 2% target equally every year,” SPD leader Saskia Esken told the Frankfurter Allgemeine Sunday newspaper. If you order big gear today, you won’t get it for three or four years. “The amounts may not be high in the first two years, and then a year comes when a lot becomes necessary.”